State News

An injured worker brought extra-contractual claims against her worker’s compensation carrier after the Division held that her injury was compensable.  She claimed damages from misrepresentations under the Insurance Code and unconscionability under the DTPA.  The San Antonio Court of Appeals held that a denial of compensability or payment does not constitute an actionable misrepresentation of the policy, even when later reversed by the DWC. Questions that deal with whether a claim falls within the scope of coverage is not an interpretation of the policy. The court also held that an alleged failure to investigate a claim does not defeat the Supreme Court’sRuttiger holding. In other words, “the sole remedy against [the carrier] for failing to timely pay benefits to [the claimant] is under the Workers’ Compensation Act.”  Vause v. Liberty Mutual Ins. Corp., 2014 WL 6687598 (Tex. App.–San Antonio 2014, no pet.).

Anybody remember Blazing Saddles? The Court will hear argument from Seabright Insurance Company that section 401.011(12) of the Labor Code, regarding course and scope of employment, is ambiguous.  A worker was driving other employees in a company truck from a hotel paid for by the company to a jobsite when the truck was struck by a semi, leading to his death.  Seabright denied the beneficiary’s claim for death benefits because the worker was traveling at the time of the accident and was thus not in the course and scope of employment. In its attempt to avoid paying death benefits to the deceased worker’s beneficiary, Seabright argues thatLeordeanu v. American  Protection  Insurance  Company  has  led  to  confusion  over  section 401.011(12) among Texas’ appellate courts. The Court will determine if the ‘but for’ test is appropriate in this situation; that is, but for his employment, the deceased worker would not have been in the situation that led to his death.  The case isSeabright Insurance Company v. Maxima Lopez, appealed from the Fourth Court of Appeals, Cause No. 01-12-00863-CV and the 229th District Court of Starr County, Cause No. DC-08-484.

As expected, Commissioner Brannan also adopted new Division Rule 131.1 regarding initiation or denial of Lifetime Income Benefits.  Under the new rule, an insurance carrier must review an injured worker’s eligibility for LIBs in a timely manner and review all statutory criteria.  Carriers will have to develop criteria to narrow down which claims may have LIBs exposure. If the insurance carrier believes the injured worker is entitled to LIBs, it shall initiate payment within 15 days even if the claimant has not requested LIBs.  But in the case where an injured worker requests LIBs in writing, the carrier has 60 days to determine eligibility.  Any denial must be on form PLN-4.

A new PLN-4, Notice Regarding Eligibility for Lifetime Income Benefits, has been finalized. The revisions were made to ensure that the injured worker and the Division had a complete explanation as to why the insurance carrier is denying LIBs.  The revised form adds a checkbox to clearly show that eligibility for LIBs is denied followed by a space for a full and complete statement.

States have been cracking down on the lucrative practice of physician dispensing of prescription drugs, a practice largely limited to workers’ compensation doctors. Some doctors are prescribing novel doses of common drugs for which they can charge more. For example, muscle relaxant cyclobenzaprine is commonly prescribed in 5 and 10 milligram doses. However, physicians are dispensing new 7.5 milligram doses of the medication for which they can charge nearly 5 times as much, despite the lack of any medical evidence that the new dose is any more effective.  Another move we are seeing is physicians prescribing complex compounded medications, such as topical creams to treat pain, also despite evidence that these creams are not effective.

Nova Healthcare Management / Nova Medical Centers of Houston, Texas pled guilty to felony worker’s compensation fraud. An investigation by Texas Mutual revealed that Nova was billing for one-on-one physical therapy but was actually providing less expensive group therapy. Under the plea agreement, Nova has withdrawn from the Texas Star Network, repaid $6.5 million to Texas Mutual, and paid a $5,000 fine.

On February 27, 2015, the Alabama Court of Civil Appeals released its opinion inDana Louise Pollock v. Girl Scouts of Southern Alabama, Inc. wherein it considered a claimed injury arising out of a horse riding accident. At the trial court level, the judge was presented with evidence that the injured employee, the business manager of a 6 week summer camp, voluntarily participated in a horseback ride at the end of the camp. The ride was for staff members only and participation was not required or encouraged. In fact, when the employee asked her supervisor for permission to participate, she was actually discouraged because of the existence of prior back injuries. During the ride, the horse bolted unexpectedly causing injury to the employee’s back. The employee contended that the injury was work related because it happened during work hours, during an event that occurs every year at the end of the summer session, it was on her employer’s property, and she had her supervisor’s permission. The employer file a motion for summary judgment asserting that the accident did not arise out of or in the course of her employment. The trial court granted the motion and the employee appealed.

The Court of Civil Appeals agreed with the trial court noting that the horseback ride was voluntary and the employer did not derive any benefit from the activity.

My Two Cents:

Whether or not an employer derives a benefit from a particular activity is an important, and sometimes overlooked, consideration when looking at the "arising out of" portion of the two part causation test. Just because you are at work when an accident occurs does not mean that the accident is work related. Simply being at work might satisfy the "in the course of" portion of the test but not both parts. In this case, it was determined that there was not substantial evidence that either part of the two part test could be proven.

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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.

Brandon Lee Wegner v. Hormel Foods Corporation, Court of Appeals of Iowa, No. 14-0300

Claimant, Brandon Lee Wegner, worked for Hormel Foods Corporation and sustained an on-the-job injury on March 23, 2009.  Following a hearing, a deputy commissioner issued an arbitration decision accepting Hormel’s proposed weekly compensation rate over Claimant’s proposed rate, which, in the deputy’s view, was based on “unreliable,” “scissored snippets of original documents mashed together.” The deputy also summarily denied Claimant’s request for penalty benefits based on the claimed unreasonable rate calculation. Because Claimant had not reached maximum medical improvement, the deputy deferred ruling on permanent benefits, and also elected to defer consideration of any issues relating to temporary partial disability benefits.

On intra-agency appeal, the commissioner adopted the deputy’s decision. Claimant sought judicial review. The district court affirmed the commissioner’s decision. Claimant appealed following the denial of his motion for enlarged findings and conclusions. Claimant contends (A) the commissioner failed to set forth sufficient findings of fact and conclusions of law as required by Iowa Code section 17A.16(1), (B) the commissioner erred in determining his weekly compensation rate; (C) the commissioner erred in denying him penalty benefits arising from the compensation rate; and (D) the commissioner erred in bifurcating claims for past temporary disability benefits until he reached maximum medical improvement.

The Court of Appeals affirmed the district court’s judicial review decision affirming the commissioner’s workers’ compensation decision. The Court found both the deputy commissioner and the commissioner complied with Iowa Code section 17A.16(1) (2013) because they explicated their reasons for rejecting Claimant’s proposed rate calculations, denying penalty benefits based on the compensation rate, and deferring consideration of temporary disability benefits and penalties arising from the payment of these benefits. The Court emphasized that step-by-step reasoning in an agency decision is not essential, as long as it is possible to determine what evidence was considered and why certain evidence was credited over other evidence.

Additionally, the Court found the commissioner’s findings on the issue of Claimant’s weekly compensation rate are supported by substantial evidence. The deputy commissioner accepted Hormel’s proposed rate over Claimant’s proposed rate because Claimant’s exhibit did not appear to be a complete record. The Court also found the record contains substantial evidence to support the commissioner’s implicit findings in declining to award Claimant penalty benefits. Finally, the Court found the commissioner acted well within his discretion in deciding to defer consideration of issues relating to the past award of temporary benefits, given that the parties had stipulated Claimant has yet to reach maximum medical improvement and agreed “[e]ntitlement to permanent disability [was] not ripe for determination.”

Call Mark Bosscher or Lee Hook with any questions @ 515-243-2100.  We’d be happy to help, whether it be a quick or a complex issue!

             There have been a number of developments in the Division of Workers’ Compensation in 2015 of which practitioners should be aware:

            Retirement of Director Peter J. Calderone,

            After 13 years of service as Director of the Division of Workers’ Compensation and 39 years of service to the State of New Jersey, Chief Judge and Director Peter J. Calderone announced this week that he will be retiring effective February 28, 2015.  Director Calderone raised the level of professionalism within the Division and modernized the New Jersey workers’ compensation practice, with e-filing of pleadings, court listings and communications from counsel to the courts.  He led the creation of an extensive case management system and developed a first class Division website providing a wide range of valuable information to practitioners and the public.   During his tenure, rules for discovery on urgent motions for medical and temporary disability benefits were established, and new administrative rules were adopted for medical reimbursement petitions, thousands of which are now handled in the Division. 

            The new Director of the Division of Workers’ Compensation will be the Honorable Russell Wojtenko, Jr., Supervising Judge of New Brunswick vicinage.  Judge Wojtenko resides in Mercer County and currently sits in New Brunswick.  He has earned a reputation in the bar as  hard working and fair to all parties. 

            Three New Workers’ Compensation Judges

             The Governor has nominated three experienced practitioners as workers’ compensation judges: Michael J. Dillon, Esq., Thomas J. Ludlum, Esq. and John C. Gavejian, Esq., all from Bergen County.

             2015 Rate Charts Are Available

             For clients who are interested in receiving 2015 rate charts, please email the undersigned or Carol Wright atcwright@capehart.com.  The maximum rate for temporary disability benefits and total permanent disability benefits is $855 per week, up from $843 per week in 2014.  That amounts to approximately a 1.5% increase over last year.

            The minimum rate is now $228 per week.  The current state average weekly wage on which the rates are based is $1,140.02 per week. In 2005 the maximum rate was $666 per week and the minimum rate was $168.  In 1995 the maximum rate was $469 and the minimum rate $125.  In the past 20 years the maximum and minimum rates have increased 82%.

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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. 

 A number of clients have inquired recently whether claimants in workers’ compensation cases have a right to request their treating medical records from the insurance carrier, third party administrator, or the authorized treating physician.  The answer to this question comes from both the New Jersey Workers’ Compensation Act and from the rules of the New Jersey Medical Society.

 N.J.S.A. 34:15-128.4 provides that it is unlawful for an employer, the carrier or the treating physician, or a third party in the case or their agents “to withhold from the individual any medical information they have regarding that individual which is requested by the individual, and if an individual requests the medical information, the individual shall not be charged fees in excess of the cost of providing copies of the information.”  In other words, a claimant has a right to medical information from any party to a workers’ compensation case.  That includes the treating medical provider. 

Authorized workers’ compensation physicians owe the same obligation to a treating claimant as they would to a private patient.  The mere fact that the employer has designated the treating doctor and pays for the care in no way changes the doctor-patient relationship in a workers’ compensation case.

The rules of the New Jersey Medical Society are similar.  Under N.J.A.C. 13:35-6.5, the treating medical provider must provide patient records no later than 30 days from the receipt of a request from the patient or an authorized representative.  The records must include objective data such as test results and x-ray results.  The rules go on to say that when a patient has requested the release of medical records to a specified individual or entity, the physician shall secure a written medical authorization to protect the privacy interests of the patient. 

The Board of Medical Examiners also provides that the cost of reproducing such records shall not be greater than $1.00 per page or $100 for the entire records, whichever is less.  If the records are less than 10 pages, the medical provider may charge $10 to cover postage and associated costs related to the retrieval of such records.  Medical providers shall not charge for a copy of the patient’s records when the physician has effectively terminated a patient from practice in accordance with the requirements of N.J.A.C. 13:35-6.22.

It is important to understand the difference between a treating physician and a independent medical examiner.  Because there is no physician-patient relationship in a situation involving an independent medical examination, a physician who is performing an IME does not have to provide a copy of such a report to the examinee.  That report is sent to the party which requested it, usually the carrier, third party administrator or counsel. 

The rule regarding disclosure of treating medical records between counsel is contained inN.J.A.C. 12:235-3.8 (c), which states that either party must furnish medical information to the other within 30 days of the receipt of a demand for such records.  Usually the employer or its carrier/third party administrator has the treating records, and in that case those records must be made available to petitioner’s counsel or petitioner on request.  If the petitioner has obtained treatment on his or her own, then the same obligation rests on petitioner to provide such records to the employer on request.  If a party is not responding timely to a request for medical information in a litigated case, the appropriate step is to file a motion in the Division of Workers’ Compensation. 

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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. 

“TO MMI OR NOT TO MMI”

By Kevin L. Connors, Esquire

Under the 1996 amendments to the Pennsylvania Workers’ Compensation Act, Impairment Rating Evaluations, subject to certain prerequisites, allow an Employer/Insurer to modify a Claimant’s compensation benefits, following the acceptance of a work-related injury and payment of temporary total disability benefits, to temporary partial disability benefits, which statutorily limits the injured Employee to a maximum of 500 weeks of temporary partial disability benefits under Section 306(b) of the Act.

What?

Bear with us!

A recent Pennsylvania Commonwealth Court Decision in Neff v. W.C.A.B., decided in January 8, 2015, illustrates the confusion over what constitutes “maximum medical improvement” for IRE purposes.

First, the agreement to accept an injury as being work-related, when it involves lost time or disability, entitles the injured Employee to receive temporary total disability benefits, until such time as one of the following events occurs:

·                     The Claimant dies, and compensation benefits terminate by operation of both death and loss;

·                     The Claimant voluntarily returns to work in their pre-injury capacities, and there is no continuing wage loss post-return to work, such that the Claimant’s compensation benefits are suspended;

·                     The Claimant returns to work in a modified-duty capacity, with some reduction in return-to-work wages, such that the Claimant’s compensation benefits are modified, and temporary partial disability benefits are paid, subject to the 500 week limitation;

·                     The Claimant executes a Supplemental Agreement, perfecting either a termination, suspension, or modification of the Claimant’s workers’ compensation benefits;

·                     The Claimant signs a Final Receipt (almost never used), under which the Claimant agrees that all compensation benefits have been paid;

·                     The Claimant is deported by virtue of not being able to prove legal immigration status;

·                     The claim is settled under a Compromise and Release Agreement, perfecting some type of compromise of the indemnity and medical compensation benefits liability associated with the claim; and,

·                     The Claimant’s compensation benefits are terminated, modified, or suspended by order of a Workers’ Compensation Judge, with the Employer/Insurer carrying the burden of proving the entitlement to a change in the Claimant’s benefit entitlement status.

Next, when the injured Employee has received 104 weeks of temporary partial disability benefits, the Employer/Insurer is permitted to request that the injured Employee undergo an Impairment Rating Evaluation, performed in compliance with the AMA’s Guides to the Evaluation of Permanent Impairment, with the Employer/Insurer being entitled to convert/modify the injured Employee’s wage loss disability benefits from temporary total to temporary partial disability benefits, if the Impairment Rating Evaluation results in a determination that the injured Employee’s Impairment Rating is less than 50% of a whole person standard.

The thresholds permitting the Employer/Insurer to request that an injured Employee who has received 104 weeks of wage loss disability benefits undergo an Impairment Rating, under Section 306(a.2)(1), of the Pennsylvania Workers’ Compensation Act require the following prerequisites:

·                     Accepted work injury resulting in wage loss disability, or award of workers’ compensation benefits;

·                     Receipt of 104 weeks of temporary total disability benefits;

·                     The Employer/Insurer requesting an Impairment Rating Physician Designation from the Pennsylvania Bureau of Workers’ Compensation;

·                     Appropriate certification that the Impairment Rating physician is certified to conduct Impairment Rating Evaluations of the AMA’s Guides;

·                     A preliminary determination by the IRE designated physician that the injured Employee has reached maximum medical improvement, considered to be a point in time in the recovery process after an injury, when further formal medical or surgical intervention cannot be expected to improve the underlying impairment or injury; and,

·                     An Impairment Rating Evaluation is performed by a certified IRE physician who first concludes that the injured Employee is at MMI, and then concludes that the injured Employee has an Impairment Rating, utilizing the AMA’s Guides, of less than 50% of a whole person standard.

If all of the above criteria are met, the injured Employee’s wage loss disability benefits are then converted or modified from temporary total to temporary partial disability benefits, capping the amount of benefits that an injured Employee can receive at 500 weeks, after receipt of the 104 weeks of temporary total disability benefits, for a total of 604 weeks of disability benefits equal to $574,404.00 of Pennsylvania’s 2015 maximum compensation benefit rate of $951.00.

The total of both temporary total and temporary partial disability benefits equals 604 weeks.

If the IRE Request is made within 60 days of the injured Employee receiving 104 weeks of temporary total disability benefits, an IRE establishing an Impairment Rating of less than 50% automatically results in the injured Employee’s wage loss disability benefits converting from temporary total to temporary partial, again subject to the 500 cap.

If the IRE Request is made more than 60 days after the injured Employee has received 104 weeks of temporary total disability benefits, an IRE establishing an Impairment Rating of less than 50% does not automatically entitle the Employer/Insurer to convert or modify the injured Employee’s temporary total disability benefits into temporary partial disability benefits, as the Employer/Insurer must then file a Modification Petition, to litigate the issue of the conversion or modification of the injured Employee’s disability benefits, requiring the Employer/Insurer to prove the validity of the IRE, in terms of perfecting the necessary elements to establish that the IRE was consistent not only with the AMA Guides, but also with the Pennsylvania Workers’ Compensation Act.

The determination of whether an injured Employee has reached MMI is both a sword and a shield in IRE litigation in Pennsylvania.

First, challenges to an injured Employee reaching MMI have long been utilized by the Claimant’s bar, to challenge the threshold determination of IRE physicians, as to whether an injured Employee has reached MMI, with the challenges often time being categorized as flanking moves to allege new or previously undiagnosed injuries as also being part of the compensable work injury nexus, particularly in psychological overlay situations, as well as in situations where diagnostic impressions have evolved, either due to additional diagnostic testing, or due to surgical intervention.

More recently, the Pennsylvania Commonwealth Court was asked to determine the validity of an IRE where the injured Employee contended that she might possibly require future surgery for her work injury, in the January 8, 2015 ruling inNeff v. W.C.A.B.

The underlying facts were that the injured Employee sustained a work injury on February 20, 2004, with the injury being described as right wrist carpal tunnel syndrome.

Subsequently, the Employer/Insurer filed Petitions to terminate and suspend the injured Employee’s compensation benefits, in response to which the injured Employee filed Petitions to Review the description of injury on the Notice of Compensation Payable, and to Review medical treatment that the injured Employee had received post-injury.

In ruling on the pending Petitions, the Workers’ Compensation Judge denied the Termination Petition, finding that the injured Employee had not recovered from the work injuries, with the WCJ granting the Review Petition, finding that the injured Employee’s injury also included chronic lateral epicondylitis.

Subsequent to that Decision, the parties entered into a Compromise and Release Agreement, under which the injured Employee’s benefits for the right carpal tunnel injury were resolved, with liability for the chronic lateral epicondylitis remaining open.

Two years later, the Employer/Insurer again filed a Modification Petition against the injured Employee, alleging that the open injury, the right lateral epicondylitis, had resolved into a permanent impairment of less than 50%, with the Employer/Insurer seeking to modify the injured Employee’s wage loss benefits from temporary total to temporary partial disability benefits.

The Modification Petition was based upon an Impairment Rating Evaluation that had been performed by Dr. William Prebola, a certified Impairment Rating examiner.

In the course of conducting the IRE, Dr. Prebola had determined that the injured Employee had reached maximum medical improvement, and that her whole person Impairment Rating was 1%.

The IRE was sought beyond the 104 week payment of temporary total disability benefits that would have permitted the Employer/Insurer to automatically modify the injured Employee’s compensation benefits from temporary total to temporary partial disability benefits.

Ruling on the Employer/Insurer’s Modification Petition, the WCJ granted the Petition, resulting in the injured Employee’s compensation benefits being modified, from temporary total to temporary partial disability benefits, with the injured Employee appealing the WCJ’s Decision to the Appeal Board, which likewise affirmed the WCJ’s Decision, following which the injured Employee sought review before the Pennsylvania Commonwealth Court.

On Appeal before the Pennsylvania Commonwealth Court, the injured Employee argued that the IRE that formed the basis for the modification of the injured Employee’s compensation benefits was invalid, arguing that the IRE was premature and invalid as a matter of law, where there existed a reasonable potential for the injured Employee to undergo future surgery that might cause a change in her condition.

Considering the injured Employee’s Appeal, the Commonwealth Court nevertheless affirmed the WCJ’s Decision modifying the injured Employee’s compensation benefits, as the Commonwealth Court held that the initial determination as to whether an injured Employee has reached maximum medical improvement is an inherently medical determination, which must necessarily either be supported or rebutted by medical testimony, with the Commonwealth Court finding that Dr. Prebola had considered the appropriate factors required by the AMA’s Guides, in determining that the injured Employee had reached MMI, and so long as Dr. Prebola had relied upon the factors dictated by the AMA’s Guides, the WCJ had judicial discretion to rely upon Dr. Prebola’s determination that the injured Employee was at MMI.

Since the WCJ had found that Dr. Prebola’s medical opinions were both persuasive and credible, not only in terms of the injured Employee reaching MMI, but also in terms of Dr. Prebola’s determination that the injured Employee had a 1% whole person Impairment, the Commonwealth Court held that the WCJ was correct in relying upon and crediting Dr. Prebola’s medical opinions to determine that the injured Employee had reached MMI in accordance with the AMA’s Guides.

So holding, the Commonwealth Court held that the Employer/Insurer’s IRE was, in fact, valid, resulting in the injured Employee’s Appeal being denied and the WCJ’s Decision being affirmed.

Quoting from the AMA’s Guides regarding MMIs:

2.3c When Are Impairment Ratings Performed?

Only permanent impairment may be rated according to the Guides, and only after the status of “maximum medical improvement” (MMI) is determined, as explained in Section 2.5e.  Impairment should not be considered permanent until a reasonable time has passed for the healing or recovery to occur.  This will depend on the nature of underlying pathology, as the optimal duration for recovery made very conservatively from days to months.  The clinical findings must indicate that the medical condition is static and well stabilized for the person to have reached MMI…[.]

….

2.5e Maximum Medical Improvement

Maximum Medical Improvement refers to a status where patients are as good as they are going to be from the medical and surgical treatment available to them.  It can also be conceptualized as a date from which further recovery or deterioration is not anticipated, although over time (beyond 12 months) there may be some expected change…[.]

Thus, MMI represents a point in time in the recovery process after an injury when further formal medical or surgical intervention cannot be expected to improve the underlying impairment.  Therefore, MMI is not predicated on the elimination of symptoms and/or subjective complaints.  Also, MMI can be determined if recovery has reached the stage where symptoms can be expected to remain stable with the passage of time, or can be managed with palliative measures that do not alter the underlying impairment substantially, within medical probability…[.]

Obviously, this is a Decision very favorable to Employers and Insurers, in the course of validating the efficacy of IREs predicated upon MMI having been established.

ConnorsO’Dell LLP

Trust us, we just get it!  It is trust well spent!

We defend Employers, Self-Insureds, Insurance Carriers, and Third Party Administrators in Workers’ Compensation matters throughout  Pennsylvania.  We have over 100 years of cumulative experience defending our clients against compensation-related liabilities, with no attorney in our firm having less than ten (10) years of specialized experience, empowering our Workers’ Compensation practice group attorneys to be more than mere claim denials, enabling us to create the factual and legal leverage to expeditiously resolve claims, in the course of limiting/reducing/extinguishing our clients’ liabilities under the Pennsylvania Workers’ Compensation Act.

Every member of our Workers’ Compensation practice group is AV rated.  Our partnership with the NWCDN magnifies the lens for which our professional expertise imperiously demands that we always be dynamic and exacting advocates for our clients, navigating the frustrating and form-intensive minefield pervasive throughout Pennsylvania Workers’ Compensation practice and procedure.