State News

In November of 2017, the Alabama State Bar appointed a task force to review the Alabama Workers’ Compensation Act and make recommendations for improvement.  On October 17, 2018,the task force unanimously approved a proposed bill that contained substantial changes to the Act.  Recently, the Alabama Council of Association Workers’ Compensation Self Insurance Funds (Council) voted to oppose the proposed bill.   The Council, which represents self-insurance funds providing workers' compensation coverage for 16,200 Alabama businesses employing 375,000 people, primarily objects to the proposal because it would raise legal fees for plaintiff attorneys by one-third and do nothing in the short run to reign in hospital, doctor, and other medical costs. It also more than doubles the cap on certain disability payments to injured workers and adds an inflationary adjustment.

"While the Council is always willing to work with any group to make meaningful and fair improvements to Alabama workers' compensation law, any such negotiation must include all parties", the statement said. The Council was not included in the ABA appointed committee that drafted and approved the proposed bill. 

My Two Cents 

Although the Alabama Legislature could consider changes to the law when its Regular Session begins in March, it is unlikely that anything will get passed committee in light of the recent Council opposition and the fact that the neither Alabama Bar Association or the Workers’ Compensation Division of the Alabama Department of Labor are in a position to recommend the proposed bill or otherwise voice support.  According to the ADOL, it is a state regulatory agency tasked with the responsibility of following and enforcing the laws put in place by the legislature.  As the regulator, it typically does not comment on proposed legislation.  However, it acknowledges that the current workers’ compensation laws are not ideal and that amendments are needed that benefit both injured workers and employers.  It will follow and enforce any changes that are made, if any.   

If changes of this magnitude are to have any chance of success in committee, there must be a consensus of all interested parties.  That is not to say that it cannot get done.  It is just a little optimistic to think it can get done in the next few months. 

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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 at mfish@fishnelson.com or by calling him directly at 205-332-1448.

On January 4, 2019, the Alabama Supreme Court released its opinion in Ace American Insurance Company v. Rouse’s Enterprises, LLC d/b/a Rouses Markets wherein it reversed a trial court’s order dismissing the lawsuit for failure to prosecute.  At the trial court level, Ace American Insurance successfully intervened in the lawsuit in order to protect its sizable subrogation lien.  When the plaintiff failed to prosecute the case, the judge issued an order giving a set amount of time in which the plaintiff was to respond or the case would be dismissed.  Although the plaintiff failed to respond, Ace American Insurance did respond seeking to keep the case pending so that it could take the necessary steps to protect its subrogation interest.  Despite the response from Ace, the trial court dismissed the entire case.  Ace appealed.

On appeal, the Alabama Supreme Court noted that Ace fully complied with the trial court’s order and set forth its intention to proceed against the defendant on its own.  Since dismissals with prejudice are considered drastic sanctions that are only to be applied in extreme situations, the Court carefully scrutinized the trial court’s order and determined that judgment was due to be reversed.

My Two Cents

Interestingly, Ace’s subrogation lien concerned workers’ compensation benefits paid pursuant to a Louisiana claim.  The Complaint for Intervention was filed in an Alabama Circuit Court by a Mississippi lawyer.  Since the subject accident occurred in Alabama, the laws of Alabama apply to the lien recovery rights.  Alabama Code Section 25-5-11(d) states that an employer or insurance carrier may bring a civil action directly against the alleged third party tortfeasor but only if the injured party (claimant) fails to file a civil action within the time allowed by law.  In that event, the employer or insurance carrier is afforded an additional 6 months in which to bring a direct civil action against the third party.  In this case, the claimant did bring a civil action within the 2 year statute of limitations.  This begs the question, was the carrier’s right to proceed directly ever triggered?  If not, this is definitely a loophole that needs to be corrected during the next major revision of the Alabama Workers’ Compensation Act.  

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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 at mfish@fishnelson.com or by calling him directly at 205-332-1448.

Alabama Appellate Court Determines that Using the Same Standard for the Left and the Right Made a Wrong

On January 4, 2018, the Alabama Court of Civil Appeals released its opinion inEnterprise Leasing Company –South Central, LLC v. Benson Drake.  At trial, the employee claimed an initial left leg injury due to an accident and a subsequent right leg injury due to issues related to an altered gait.  The trial court concluded that both legs were compensable but applied the lower substantial evidence standard to both.  The Employer appealed.

On appeal, the Court of Civil Appeals reversed and remanded the trial court’s order with instructions to apply the higher “clear and convincing” standard to the subsequent right leg injury.  Specifically, the Court instructed the trial court to review the evidence adduced at trial and determine whether or not the employee proved, by clear and convincing evidence, that his right leg injury was the direct and natural consequence of the left knee injury.

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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 at mfish@fishnelson.com or by calling him directly at 205-332-1448.

Effective January 1, 2019, the mileage reimbursement rate for Alabama is 58 cents per mile, a 3.5 cent increase from 2018.

The Honorable Joshua Friedman decided an issue this month that has been pending for several years regarding calculation of the Social Security Disability offsets in workers’ compensation cases for petitioners under the age of 62.  A petitioner’s attorney had brought motions in five cases including one handled by our office, asserting that the SSD offset had been calculated incorrectly because the petitioner’s rate should change and increase every three years in accordance with rate changes in Social Security – the triennial recalculation.  While we do not normally write about cases decided in the Division of Workers’ Compensation, this case is an exception because it is the only decision that we know of in the state dealing with the issue of triennial recalculation.

The total and permanent disability provision of the workers’ compensation statute NJSA 34:15-95.5 indicates that offsets should be calculated in conjunction with the SSD statute 42 USC 424(a).  In most states, if a petitioner gets both SSD and workers’ compensation the SSD is reduced to insure that the petitioner does not earn more than his 80% average current earnings.  In a handful of states, including NJ, there is a “reverse offset” – if the combination of SSD and workers’ compensation is more than the 80% average current earnings (ACE), then the workers’ compensation rate is reduced, not the SSD.  This offset can make a total disability award very attractive monetarily for the respondent and the Fund.  This offset is only applicable for total and permanent disability resolutions.

The petitioner’s attorney had argued that since SSD re-determines the ACE every three years that workers’ compensation was required to do the same.  This would mean that every offset case would have the rate increased every three years by an amount determined by Social Security which takes in effect national wage factors, inflation, cost of living etc.  The effect of the change that the petitioner was seeking would be to both increase the exposure for every total disability case for a worker under 62 and also insert uncertainty regarding the amount of the award.  Another potential issue is that any change in the NJ workers’ compensation statute regarding the offset could result in the loss of the “reverse offset” for the entire state, converting NJ to a state where Social Security, rather than workers’ compensation gets the offset.

The motions were pending for a very long time with multiple briefs provided by each party and testimony offered regarding legislative intent regarding NJSA 34:15 – 95.5. and Social Security.  In his decision, Judge Friedman stated that the triennial recalculation is essentially a cost of living adjustment, which was not contemplated by the Workers’ Compensation Act.  He also found important the fact that Social Security does not make triennial recalculations in reverse offset states.  He believed that the calculations that the petitioner’s attorney provided were merely hypothetical, not official calculations from Social Security.  Judge Friedman also decided that the Supremacy Clause, which holds that Federal law pre-empts conflicting State law, was not applicable because there was no intent in the Federal law to “occupy the field” for payment of workers’ compensation disability benefits.

This decision is a very favorable outcome for the respondents and the Fund.  A contrary decision would have been extremely disruptive to both pending total and permanent disability cases and potentially cases already settled or tried.  At this time we do not know if the case will be appealed. Claire Ringel of our office handled this case for respondent Burlington County. Please direct any questions regarding this issue to her.

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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. 

The DWC Appeals Panel has been busy cleaning up things ALJs have missed and/or advising them that they cannot do certain things at all.  We have it on good authority that this is an area of particular interest for the new Commissioner at DWC.

ALJ Can’t Order Payment for Alternate Certification.  In APD 182018, the ALJ heard issues in a medical fee dispute.  This was a network claim and the treating doctor referred the claimant to a non-network doctor for an MMI/IR evaluation.  At the CCH, on his own motion, the ALJ added the issue of whether the carrier had to pay for the non-network MMI/IR examination. Spoiler Alert:  the ALJ said the Carrier was liable.  The Appeals Panel said it was not the ALJ’s decision to make and reversed and rendered saying the dispute over payment for providing an MMI/IR examination is a medical fee dispute adjudicated through the MFDR process. 
 
If it’s Litigated, You Have to Make a Decision.  In APD 182017, the hearing was set on MMI/IR.  Apparently, however, extent of injury and the proper appointment of a second DD were also litigated at the CCH.  The crux of the matter was, apparently, whether the injury included one leg fracture or multiple leg fractures.  If there were multiple leg fractures, the DD appointed would not have been qualified.  The Appeals Panel reviewed the records and said that the parties did actually litigate the extent of injury and DD qualification issues.  As such, the ALJ’s MMI/IR determination could not be affirmed as the DD might not have been qualified.  The case was sent back to the ALJ to determine the extent of the injury, qualification of the DD and, ultimately the MMI/IR issues.
 
In APD 182119, the Appeals Panel reviewed extent of injury.  The BRO report showed that the self-insured “accepted” a condition but, at the CCH, it declined to stipulate to the condition as compensable.  The compensability of that condition was litigated, and the ALJ discussed it in the decision, but made no findings of fact or conclusions of law about it.  The Appeals Panel reversed and remanded for the ALJ to address the missing condition in the extent of injury decision.
 
 ALJ Who Misquotes Expert Cannot Rely on that Expert. In APD 182350, the Appeals Panel determined that the ALJ misstated the evidence when she asserted that one of the experts said the claimant had diabetes, by way of explaining that EMG/NCV results were consistent with polyneuropathy rather than radiculopathy.  The ALJ stated that she found that expert’s opinion most persuasive and found that the claimant did not have lumbar radiculopathy.  The Appeals Panel said that the expert did not, in fact, say that the Claimant had diabetes.  The AP held that the decision of the ALJ was based on a misstatement of the medical evidence in the case and reversed and rendered the extent of injury determination.  They also noted in a footnote, that the ALJ incorrectly referenced the date of injury in the issue statement and the discussion section of the decision.
 
No Permanent Impairment and 0% Impairment are Different. In APD 182195, the Appeals Panel reviewed the ALJ’s determination that Claimant reached MMI with no permanent impairment and reformed the decision.  The certification adopted by the ALJ actually assigned a 0% impairment rating, which differs from a finding that there is no permanent impairment. 
 
Carrier Denied RME was An Abuse of Discretion.  In APD 182111, a complex case involving multiple injuries and multiple certifications of MMI/IR, the ALJ issued a Presiding Officer Directive to a DD.  Upon receipt of the report, the Carrier asked for a continuance and the opportunity to get a post-DD RME.  The ALJ denied the request and closed the record, finding MMI/IR per that DD.  The Appeals Panel cited 408.0041(f) of the Act and Rule 126.5(c)(2) which entitles the Carrier to a post-DD RME, and found that the ALJ did abuse his discretion in not allowing the Carrier to get a post-DD RME following the DD examination ordered by the ALJ.

-  Copyright 2018,Stone Loughlin & Swanson, LLP.

There has been an uptick in the number of “Monitoring Letters” from DWC. The issues include: failing to attend a BRC without good cause; failing to timely respond to Claimant requests for information; failing to timely file notice of coverage and claim administration contact information to the DWC; failing to electronically file Employer’s First Report of Injury; and, failing to provide all pertinent information to the DWC and parties prior to a BRC. 
 
We are not sure what has spawned the recent activity, but will continue to monitor the situation.  We do know that in two instances we requested withdrawal of the letter upon proof that the allegations were categorically unfounded.

-  Copyright 2018,Stone Loughlin & Swanson, LLP.

Alexis C. Norman, from Midlothian, Texas, and her co-conspirator, Karen Jones, created a fake business in Tyler, Texas and used stolen identities of licensed counselors and Medicaid recipients to submit false claims to Medicaid. 
 
Norman pleaded guilty and went to prison in April 2016.  Apparently, she and her cohort, Jones, didn’t stop there.  They created another fake company in Waco, and Norman supplied Jones with more stolen counselor and Medicaid patient identities from prisonby hiding pieces of paper in her shoe to give to Jones during visits.   Her motivation for continuing the criminal activity?  She needed to pay her criminal defense lawyer.
 
Meanwhile, in Dallas, Texas workers’ compensation claimants’ lawyer, Royce Bicklein, is scheduled for trial in federal court on February 19, 2019.  Bicklein was named in a federal court indictment concerning the Forest Park Medical Center and allegations against 21 people and involving over $40 million in alleged bribes and kickbacks.

-  Copyright 2018, Stone Loughlin & Swanson, LLP.

DWC announced this month that eligible spouses of first responders remain eligible for death benefits for life after remarrying (if they remarry on or after 9/1/17), if the first responder died in the course and scope of employment or while providing volunteer services, regardless of the date on which the death of the first responder occurred. If you weren't married to a first responder, you still shouldn't get remarried.
 
DWC also published its annual report of work-related deaths in Texas.  There were 534 fatal occupational injuries in 2017, which is a 2% decrease from 2016.  Trade, transportation and utilities was the category with the highest number of fatal work injuries (148), while construction ranked second (133).  The full report can be found at the following link:  TDI website.

-  Copyright 2018, Stone Loughlin & Swanson, LLP.

Section 20 settlements are not technically payments of workers’ compensation benefits except for insurance rating purposes.  These settlements are popular with employers because the file can be closed for good with no potential for a reopener claim.  In many states, the Section 20 settlement is called a full and final settlement.  But does a Section 20 settlement mean that the employer has no subrogation rights as to medical, temporary or permanency payments when the injured worker has a good third party case arising from the work accident?

It is important for practitioners to consider at the time of a Section 20 settlement whether there is a third party case pending.  If so, the issue arises whether the employer has a lien on medical and temporary disability benefits paid prior to the settlement.  Example:  suppose the employer pays $30,000 in medical and temporary disability benefits to a claimant, who has a good third party lawsuit which he will eventually settle for $100,000.  There are causation issues in the workers’ compensation case such that the parties agree to settle the permanency claim petition months later for $45,000 on a Section 20.  On the day of settlement, no one mentions anything about the prior payments of $30,000 for medical and temporary benefits.  The Judge of Compensation approves the Section 20 settlement for $45,000.  A few days later the third party case settles for $100,000, and the employer requests reimbursement of two thirds of the $20,000 it has paid in medical and temporary disability benefits.

Does the claimant owe the employer $20,000 minus $750 in costs of suit?  The answer is yes, according to Aetna Life & Cas. v. Estate of Engard, 218 N.J. Super. 239 (Law Div. 1986).  The $45,000 payment under the Section 20 is not lienable, but the prior medical and temporary disability benefits made well before the case settled remain lienable.  Best practice would be to place all of this on the record so that the injured worker is well aware that only the $45,000 Section 20 payment will escape the respondent’s lien, not the prior medical and temporary disability benefits.

Suppose the defense attorney in the same case negotiated with the petitioner’s attorney to allow the $45,000 Section 20 payment to be lienable?  Can that be done in New Jersey when a Section 20 payment is not really a payment of workers’ compensation benefits?  Yes, according to Calle v. Hitachi Power Tools, No. A-1015-09T1 (App. Div. February 15, 2011).  This situation seldom happens in workers’ compensation court.  But the parties are free to negotiate the terms of a settlement whereby the petitioner agrees to permit a Section 20 payment to be lienable.  The Judge of Compensation must, of course, approve the entire settlement, including this aspect of the settlement.  The intention to make the Section 20 payment lienable should be placed on the actual court order and on the record, thereby making clear that respondent has a lien on the Section 20 payment itself.

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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.