Court Decisions of Note

Subrogation

BWC v. Verlinger, 2018-Ohio-1481 (April 19, 2018).

In a very recent ruling by the Ohio Supreme Court, it was held that the Ohio Bureau of Workers’ Compensation (BWC) must be notified of potential third-party settlements that would compensate an injured worker for an injury, even when an application for workers’ compensation benefits has been denied and is under appeal.

In this case, Ms. Verlinger was involved in a motorcycle accident while working for her employer. She applied for worker’s compensation benefits, but the BWC initially denied her claim. While her appeal was pending, she reached a settlement with the relevant insurance companies. Verlinger incorrectly believed she did not have to inform the BWC or the Ohio Attorney General’s Office (AGO) about her insurance settlement because it had been reached during the period when her claim was denied by the BWC. However, the Court held that she remained a claimant eligible to receive workers’ compensation benefits during the appeal period, and therefore, was required to notify the BWC and AGO of their rights under R.C. § 4123.931. (Her claim was eventually allowed by the Industrial Commission of Ohio through the administration hearing process).

Therefore, the Verlinger Court tells us through its opinion that (1) a claimant, for subrogation purposes, is any party who is eligible for compensation, medical benefits, or death benefits from the BWC; and, (2) a claimant is “eligible” for BWC benefits unless and until a final determination has been made indicating a claimant is not eligible for such; and, (3) employers can be penalized if the BWC and/or AGO are not notified of third-party payments made to a claimant in their employ.

Constitutionality

Ferguson v. State, 2017-Ohio-7844 (September 28, 2017).

In 2006 the legislature amended the statute governing appeals to the courts of common pleas to require the Plaintiff-Claimant to obtain the Defendant-Employer’s consent to a Civil Rule 41(A) voluntary dismissal when the Employer had initiated the court appeal. Ford had filed the court appeal, and, when Ferguson sough to voluntarily dismiss, it refused to agree. The trial court then pended the original appeal and proceeded with a declaratory-judgment action regarding the employer consent provision’s constitutionality.

The trial court found the employer consent provision unconstitutional for three reasons. First, by overriding a Civil Procedure Rule, the legislature had violated separation-of-powers by intruding on the court’s power to govern trials. Second, the creation of two different classes of Plaintiff-Claimants, those who filed their own appeals and those whose employers appealed, ran afoul of equal protection. Finally, Plaintiff-Claimants were inhibited from adequately presenting their cases, a violation of the Ohio Constitution’s Due Course of Law Clause. The Cuyahoga County Court of Appeals (Cleveland) affirmed.

A unanimous Ohio Supreme Court reversed. There was no violation of separation of powers because the General Assembly may create procedural rules for “specialty statutory proceedings” like workers’ compensation court appeals. Furthermore, equal protection and due process were not violated because a suspect class had not been created. Differentiating injured workers based on whether they, or their employers, initiated the court appeal survived rational basis review. This standard was sufficient, especially given the differences between workers’ compensation and the civil justice system.

Permanent Total Compensation

State ex rel. Gulley v. Industrial Comm’n., 2017-Ohio-9131 (12/21/17)

In this case, Mr. Gulley was injured on November 9, 2009 when he slipped off a piece of heavy equipment at work. His claim was allowed for various physical conditions and also later for psychological conditions. Mr. Gulley had not worked since the date of injury, and when the BWC approached him in 2010 and 2012 with opportunities for rehabilitation and retraining, he refused in both instances. Subsequently in 2014, Mr. Gulley’s attorney referred him to “assertive vocational services” for rehabilitation, where the assessment by Ms. McCoy, a rehabilitation counselor, resulted in a finding that Mr. Gulley did not appear to be a feasible candidate for vocational-rehabilitative services. Mr. Gulley then applied for permanent total compensation (“PTD”), and in doing so, his attorney hired Ms. McCoy to opine that Mr. Gulley was not employable. The Ohio Industrial Commission, through its staff hearing officer, denied his application in part because of his refusal to participate in vocational rehab and also rejected Ms. McCoy’s reports on the basis that she had conflicts of interest in that she had reviewed the matter for the BWC prior to being engaged by Mr. Gulley. The hearing officer concluded that Mr. Gulley was medically capable of performing sedentary work. Mr. Gulley filed a complaint seeking a writ of mandamus.

The 10th District Court of Appeals determined that permanent total compensation should not be denied based primarily on Mr. Gulley’s refusal of rehab services (in 2010 and 2012) when he later attempted to use such services in 2014 (and was deemed not feasible after the assessment). The court issued a limited writ requiring the Commission to address the merits of Mr. Gulley’s PTD application without relying on the earlier refusal of rehab services.

On appeal before the Oho Supreme Court, there was no dispute that Mr. Gulley was medically capable of performing sedentary work, but the issue was the Commission’s analysis of Mr. Gulley’s non-medical factors, particularly the impact of the evidence of vocational rehabilitation in the record. The Commission argued that it may consider an injured worker’s lack of participation in vocational rehab and that Mr. Gulley’s refusal to participate was “some evidence” that supported its decision in denying PTD. The Court held that the Commission did not abuse its discretion when it considered that refusal to participate in rehab when he was deemed eligible in 2010 and 2012. However, the Court disagreed with the Commission’s act of summarily rejecting the report of Ms. McCoy on an alleged conflict of interest. The Court held that although the commission is not bound to accept all vocational evidence in the record, it is required to review the evidence to determine whether the claimant is foreclosed from sustained remunerative employment. The Court ruled that the Commission failed to do so here, and ordered the Commission to review all the vocational evidence before determining whether Mr. Gulley was entitled to PTD.

Temporary Total Compensation

State ex rel. Cordell v. Pallet Companies, Inc., 149 Ohio St. 3d 483, 2016-Ohio-8446 (12/29/16).

The Cordell case is important for understanding the current status of the voluntary abandonment doctrine in the context of a positive post-injury drug test. Here the Supreme Court narrowed the circumstances that would make an injured worker ineligible to collect temporary total under the voluntary abandonment doctrine. The employer, Pallet, had a typical drug-free-workplace policy which prohibited the use of illegal substances “at any time whether on or off duty.” Mr. Cordell broke his leg in the course and scope of his employment at Pallet and subsequently failed a routine post-accident drug screen which was positive for marijuana. Mr. Cordell was terminated immediately after Pallet became away of the positive drug screen.

At the Industrial Commission, Pallet did not contest the allowance of the claim itself, conceding that the drug use had not caused the accident itself (it was due to a fall off a tow motor that occurred when a truck pulled away from a loading dock too quickly). The Commission denied TTD to Mr. Cordell finding that he had voluntarily abandoned his employment. In a divided panel decision by the Commission, it was found that the Staff Hearing Officer had failed to apply State ex rel. PaySource USA, Inc. v. Industrial Comm’n, 10th Dist. Franklin No. 08AP-677(June 30, 2009), wherein the Tenth District had found the injured worker abandoned his employment when he used drugs prior to the injury, which severed any connection between the workplace injury and the loss of wages. The panel found that Mr. Cordell “sustained an injury in the course of and arising out of his employment on 2/16/12,” but he voluntarily abandoned his employment by use of marijuana prior to the industrial injury making him ineligible for TTD. The dissenting commissioner argued that PaySource had been discredited and urged granting the award of TTD under the decision of State ex rel. Gross v. Industrial Comm’n, 115 Ohio St. 3d 249 (2007) (“Gross II”).

The Tenth District agreed with the dissenting commissioner and granted Mr. Cordell’s writ. The Ohio Supreme Court affirmed and its decision has narrowing consequences on eligibility for TTD after a post-accident drug test. The Court held that an injured worker fired after their injury “for conduct prior to and unrelated to” the injury does not lose eligibility for TTD if (1) the discovery of the dischargeable offense occurred because of the injury; and (2) at the time of the termination, the employee was incapable of returning to work as a result of the allowed conditions in the claim.

Therefore, in practice, the Court has extended the Gross II rationale to pre-injury conduct, holding that the fact that Pallet had the right to fire Mr. Cordell does not change the fact that Mr. Cordell was injured in the course and scope of his employment and that at the time of his termination, he was temporarily and totally disabled.

Violation of Specific Safety Requirements (“VSSR”)

State ex. rel. Sunesis Constr. Co. v. Industrial Comm’n., Slip Opinion No. 2018-Ohio- _____; on appeal from the 10^th District Court of Appeals in Franklin County (2/2/18)

In this case, the employer, Sunesis Construction Company (“Sunesis”) filed a writ of mandamus with the 10th District Court of Appeals alleging that the Commission abused its discretion when it issued an award for the violation of specific safety requirements (“VSSR”). The alleged violations concerned the regulation of trenches and excavations. The court of appeals held that the Commission supported its decision with some evidence and denied the writ of mandamus.

The underlying workers’ compensation claim involved an employee, Timothy Roark, who was killed in a collapsed trench. Roark was working at the bottom of a 20-foot trench when one of the sides of the trench collapsed and he died from a head injury and traumatic asphyxia. Roark’s dependents filed an application for an VSSR award on regulations that apply to shoring, shorting and bracing the sides of trenches and excavations. Sunesis properly shored up three sides of the trench but it attempted to shore up the fourth side with a steel plate at the top pf the wall and slipped the rest of the wall.

The Commission found that (1) the fourth wall was not sufficiently supported, (2) the attempted shorting did not meet appropriate engineering standards, and (3) Roark did not disregard any instructions about working in the trench. The court of appeals held that some evidence supported the Commission’s decision, which included relying on engineering specifications noting that wet soil requires “special” treatment. This information was corroborated by testimony from four other employees.

The Ohio Supreme Court affirmed the court of appeals’ decision and denied Sunesis’ writ of mandamus. First, Sunesis should have supported the fourth wall with sufficient means because four employees testified that the trench was more than five feet high and consisted of soft or unstable material. Although Sunesis provided support for the top portion of the fourth wall, the remaining bottom portion was left unsupported. Second, the fourth wall did not meet accepted engineering standards. Sunesis attempted to argue that certain engineering standards were met, but the Court rejected that argument because wet soil required “special” treatment per engineering standards that Sunesis relied upon. Third, the Court rejected the unilateral negligence defense that states that an employee’s deliberate circumvention of a safety device will defeat a VSSR claim. However, the Court noted the employer must first comply with a VSSR for an employee to circumvent it. As a result, there was insufficient evidence that Sunesis complied with the safety requirement in the first place and insufficient evidence that Roark circumvented any precautions.

State ex rel. Ohio Paperboard v. Industrial Comm’n., 152 Ohio St.3d 155, 2017-Ohio-9233 (12/28/17)

Mr. Ruckman was performing maintenance on a conveyor belt that transported wire-bound recycled paper bales to a pulper for shredding. Along the conveyor, overhead saws cut the wire surrounding the bales. Some of those wires get wrapped around the shafts and gears of the conveyor, which requires weekly maintenance to remove. During this routine maintenance, the machine is placed into “maintenance mode” and de-energized. In this case, however, Ruckman decided to turn the machine back on to loosen some jammed wires. While reaching in to remove the wire, the conveyor caught Mr. Ruckman’s hand and crushed it. He filed a workers’ compensation claim that was allowed for left hand amputation and replantation, major depressive disorder and total loss of use of the left hand.

Ruckman alleged that Ohio Paperboard violated three safety rules regarding (1) means shall be provided to disengage the conveyor from power where exposed to contact; (2) conveyor pinch points shall be guarded or means provided at the pinch point to disengage the power; and (3) means shall be provided at each machine, within easy reach of the operator, to disengage the power. Two conditions must be met for these rules to be applicable: (1) the claimant must be an operator, which means “any employee assigned or authorized to work at the specific equipment; and (2) the conveyor must be “exposed to contact” which means “during the course of operation, the conveyor is accessible to an employee in the course in performance of an employee’s regular or assigned duty.”

The Industrial Commission awarded Mr. Ruckman an award for violation of specific safety requirements, and Ohio Paperboard filed for a writ of mandamus. The 10th District Court of Appeals denied the writ and the employer appealed the matter to the Ohio Supreme Court. The Court agreed with the Commission and the court of appeals that Mr. Ruckman was an operator because he was authorized or assigned to work on the equipment. However, the Court found that Ohio Paperboard complied with the safety requirements in question because it had emergency stop buttons within easy reach of the operator in the control shack and the pinch points were guarded in the normal operation. The Court disagreed with the Commission’s order because it failed to acknowledge that the employee was performing maintenance while the machine was disengaged from the power. The actual cause of the injury was due to Rickman’s disregard of the employer’s safety procedure and not the violation of any safety requirements. Thus, the Court granted Ohio Paperboard’s writ ordering the Commission to deny the application for an award.

State ex rel. 31, Inc. v. Industrial Comm’n., 2017-Ohio-9112 (12/21/17)

31, Inc. processes rubber to make products that are used to repair tires. Mr. Ashworth was employed at 31 as a “calendar” operator. A calendar is defined in Ohio regulations as “a machine equipped with two or more metal rolls revolving in opposite directions and used for continuously sheeting or plying up rubber or plastic impounds and for fractioning or coating fabric with rubber or plastic compounds.” Ashworth operated a calendar with three rolls and on one day grabbed rubber to pull it off a roll and it caught the fingers on his right hand and pulled his hand into a three-inch space between the rolls. He filed a claim for an award for violation of a specific safety requirement (“VSSR”) alleging that 31 had violated an Ohio safety requirement for “nip points” at workshop and factories. This specific regulation provided an exception when the machinery is covered expressly by requirements contained in other codes of specific requirements.

31 argued that the exception to this alleged requirement applied because the calendar was expressly covered under another code regulation, a rule that provides specific safety guidelines for calendars in the rubber and plastic industry. Before the Industrial Commission, 31’s argument was rejected by the hearing officer who argued that both regulations applied to the calendar, citing State ex real. Hartco, Inc. v. Industrial Commission, 38 Ohio St.3d 181 (1988), in which the Ohio Supreme Court held that provision on nip points for workshops and factories applied to a pre-roll machine used in the rubber and plastic industry. The Staff Hearing Officer granted the VSSR application and rejected 31’s argument that the exception to the nip point regulation applied, finding that the administrative rules for the rubber industry supplement - but do not supplant - the workshop and factory rules, citing Hartco. On appeal before the 10th District Court of Appeals, 31’s request for a writ was denied.

The Ohio Supreme Court agreed with 31’s argument that there are specific safety requirements for calendar machines in the Ohio administrative code that apply to the rubber industry. The rule requires that employees protect employees by either providing safety rip cords that immediately stop the calendar’s rolls when the cord is pushed or pulled or by locating the calendar where employees cannot come into contact with the roll bites. 31 argued that because this rule expressly covers calendars, the exception to the workshop and factory rule applies, and the Court agreed. For the Commission to require 31 to comply with the nip-point rule, it must ignore the rule that expressly covers the safety controls for calendar machines in the rubber industry.

Injury/ Idiopathic Injuries

Clendenin v. Girl Scouts of Western Ohio, 2017-Ohio-2830 (5/18/17).

In this case, Ms. Clendenin was injured in 2008 in the course of her employment with the Girl Scouts and her claim was allowed for various conditions, including substantial aggravation of preexisting dermatomyositis. In 2013, the BWC moved to terminate Ms. Clendenin’s benefits and compensation arguing that the condition dermatomyositis had returned to its baseline, pre-injury status. The Commission evaluated the BWC’s medical report on the issue and agreed.

Ms. Clendenin filed an appeal in the Hamilton County Court of Common Pleas arguing that the condition had not returned to pre-injury status and that the order should be vacated. The BWC sought dismissal of the case arguing that the issue was one of “extent of disability” and not a “right to participate” case and therefore the appeal to the common pleas court was improper. The Hamilton County Court agreed with the BWC and dismissed the appeal. On mandamus before the First District, that order was reversed. The First District Court of Appeals opined that when the BWC decides the condition is no longer impacted by the workplace injury, then the BWC is in effect terminating the injured worker’s right to participate for that condition in the workers’ compensation system. Therefore, the First District held, such an appeal would be properly in the common pleas court.

The Ohio Supreme Court, however, reversed the First District’s decision. The Court held that an Industrial Commission’s decision that a preexisting condition substantitally aggravated by an injury at work which has returned to “pre-injury status” involves “extent of disability.” Therefore, an appeal under Ohio Rev. Code § 4123.512 (i.e., “a right to participate appeal”) was not proper, but instead must be challenged by mandamus. Simply put, the Court found that since the dermatomyositis was already an “allowed condition” it was not a right to participate issue. The real matter was one of the amount of compensation and benefits to be paid for such condition, and that called for a challenge in mandamus and the Hamilton County Court of Common Pleas was not permitted to hear the matter.

White v. Buehrer, 2^nd District No. 27295, 2017-Ohio-8254 (10/20/17)

Ms. White was injured in a fall at work and broke her right hip. She testified at the Industrial Commission that the exam room floor where she fell had been “tacky” causing her fall. She also presented an expert report from someone who had examined the floor two weeks after the accident and opined that the floor may have been stripped but not yet relaxed at the time of White’s fall. Fiver Rivers Health Center, the employer, offered testimony from a senior nurse who worked in the exam room the day before, the day of and the day after White’s fall and said the floor was not “tacky” or otherwise hazardous. Five Rivers also offered testimony on the maintenance of the floors and that it had not been stripped or relaxed for more than a year prior to White’s fall. Ms. White’s claim was denied at all levels of the Ohio Industrial Commission, and she filed a complaint in the Montgomery Court of Common Pleas. The court granted Ms. White’s motion for summary judgment and Five Rivers appealed to the 2nd District Court of Appeals.

The issue before the court of appeals involved idiopathic causes of workplace accidents, and ruled that the trial court erred in refusing to allow the BWC to challenge White’s motion for summary judgment on the basis that the claimant bears the burden of eliminating idiopathic causes of a workplace injury. White had asserted in her motion that idiopathic causes are an “extremely limited exception” to the compensability of injuries and the existence of such a condition constituted an affirmative defense to a claim. She provided no evidence aimed at eliminating an idiopathic cause for her fall. The medical evidence in the claim and offered by Fiver Rivers and the BWC in response to her motion presented facts that there may have been an idiopathic factor that contributed to her fall (diabetic neuropathy, foot pain and noncompliance with medication).

The court of appeals ruled that, pursuant to Waller v. Mayfield, 37 Ohio St.3d 118 (1988), because the cause of the fall was not clear, White bore the burden of eliminating idiopathic conditions as the cause of her fall and the burden did not rest with Five Rivers or the BWC to disprove the effects of these conditions. The trial court’s judgment granting White’s motion for summary judgment was therefore reversed.

Evidence for Summary Judgment

Coleman v. KBO, Inc., 2^nd District No. 2017-CA-82, 2018-Ohio-763 (3/2/18)

Ms. Coleman was involved in an accident at her workplace, KBO, Inc., in 2009 as a result of which she sustained physical injury to her right wrist. Her claim was allowed for a sprain, right wrist synovitis and ulnocarpal abutment syndrome. More than five years later, Ms. Coleman sought additional allowances for psychological conditions. The Commission, at the district hearing officer level, denied the requested conditions and the staff hearing officer affirmed. Coleman filed a complaint in the Clark County Court of Common Pleas, where KBO filed a motion for summary judgment arguing there was no genuine issue of material fact whether Coleman’s depression arose from the previously allowed physical conditions and that KBO was entitled to judgment as a matter of law.

The trial court granted KBO’s motion and concluded that, due to the five years between the physical injury and the diagnosis of the psychiatric condition and to Coleman’s assertions that she was not suffering from depression during the intervening period, reasonable minds could only conclude that the psychiatric condition did not arise from the physical injury. Upon review before the 2nd District Court of Appeals, the court noted that in her opposition to the summary judgment motion, Ms. Coleman offered the affidavit of Dr. Drown who opined that her depression was “directly caused by her workers’ compensation injury.” KBO had argued that Coleman’s admissions that she had not experienced depression in the several years following her injury undercut her assertion that there was a causal connection, but the court of appeals disagreed and indicated she need not have continuously experienced depression from the time of her physical injury to establish that the depression she experienced years later was caused by the injury. Further, the court of appeals held that Dr. Drown’s affidavit created a genuine issue of material fact as to whether her depression was caused by the injury. The court found that the trial court improperly concluded that it could not consider the affidavit because the affidavit “contradicted” Coleman’s “former deposition testimony” without sufficient explanation. The trial court distinguished cases offered by KBO supporting a court’s non-consideration of an allegedly contractor affidavit in deciding summary judgment by noting that Dr. Drown did not make the contradictory statements and was not a party to the case.

The court of appeals states that the trial court concluded, based on the passage of time and without further elaboration or reasoning, that reasonable minds could not conclude that Coleman’s 2015 condition arise from the 2009 injury. This finding would imply the existence of a “bright-line” rule as to the time for filing claims for psychological injuries, when no such rule exists.

“The Calfee Corner” – Recent Calfee Cases Before the Industrial Commission and Courts of Ohio

City of Cleveland v. Bureau of Workers’ Compensation, 8^th District Court of Appeals Case No. CA 17-105604

Calfee represented the City of Cleveland as the Plaintiff in an “unjust enrichment”/premium overcharge case against the Ohio Bureau of Workers’ Compensation. Based on expert actuarial testimony presented at trial, the trial court awarded $4.5M in restitution to the City. BWC appealed to the 8^th District Court of Appeals (Cuyahoga County) alleging numerous errors. On March 8, 2018, the Court of Appeals rejected all assignments of error and upheld the trial court’s judgment in full (relying onSan Allen, Inc. v. Buehrer, 2014-Ohio-2071 (May 15, 2014)).

An appeal to the Ohio Supreme Court is expected. Issues upon appeal likely will include proper venue (trial court versus Court of Claims), exhaustion of administrative remedies, and Statute of Limitations applicability.

Claims 14-872004 and 16-837301. – Strong preparation of evidence and testimony continues to defeat attempts of independent contractor drivers – here Mr. R and Mr. B - to be recognized as “employees”.

Mr. R was a delivery driver who was injured in a car accident while performing his deliveries near Bellefontaine, Ohio. He had entered into an Owner/Operator Agreement in 2012 under which he agreed to provide delivery services which entailed picking up automobile parts from an Advanced Auto parts hub in one Ohio city and delivery of those auto parts to three other cities on a daily route. Mr. R. argued that he was the employee of the other party to the Agreement, the Alleged Employer. In support of its defense against the claim, the Alleged Employer offered both documentation of the manner and means of Mr. R’s performance of his work, as well as testimony of a witness with knowledge of the operations.

Based upon the evidence and testimony at the hearing, the Ohio Industrial Commission denied the claim and found that Mr. R. had failed to establish the existence of an employer-employee relationship with the Alleged Employer, and to the contrary, the Commission found Mr. R. to be an independent contractor on the date of his injury. The Commission found that the evidence and testimony established these facts: Mr. R. controlled the manner and means of providing his delivery services; Mr. R. provided his own vehicle, paid for his own fuel and maintenance; the Alleged Employer did not dispatch Mr. R. on any particular route; Mr. R. controlled which hours he worked and was free to work for other entities; Mr. R. was free to terminate the relationship at any time and was also free to reject any assignments; Mr. R. was paid “per route/delivery” not by a wage; and Mr. R. was issued 1099 statements from the Alleged Employer and filed his taxes as self-employed.

Similarly, Mr. B. also alleged an employer-employee relationship with the company with which he entered into an independent contractor agreement. Mr. B., a delivery driver, was injured when unloading materials from his truck and was struck with a heavy box that was unsecured. In defense of Mr. B’s claim of employment, this Alleged Employer also supplied the Industrial Commission with documentary evidence of the independent contractor relationship, as well as two witnesses with personal knowledge of the day-to-day operations of the relationship.

The Industrial Commission disallowed Mr. B’s claim finding that he was not an employee of the Alleged Employer, but an independent contractor. The Alleged Employer offered evidence and testimony to establish the defense that it insufficient control over the manner and means of Mr. B’s performance of his work, failing to establish an employment relationship under Ohio law for workers’ compensation purposes. The commission determined that Mr. B was paid a percentage of each load delivery – not a wage; Mr. B was free to accept or reject each and every load offered; the equipment used, including the truck, was owned by Mr. B.; Mr. B set his own hours subject only to the delivery deadline set by the customer (not the Alleged Employer); and Mr. B was not told what specific route he had to take for his deliveries.

Allegations of employment relationships in truck delivery matters are very fact specific. However, diligent preparation of documents and testimony establishing the control factors on the performance of the work rest with the driver (or some third party) and not the Alleged Employer. Successful results before the Ohio Industrial Commission reflect this diligent preparation. The denial of Mr. R’s claim is now in Court on Mr. R’s appeal on the denial of an employment relationship. Mr. B. did not appeal the Commission’s final order denying his claim.

Claim 15-851474. On October 19, 2015 the IW fell off an eight (8) foot ladder while performing asbestos abatement. She sustained multiple rib fractures and soft tissue injuries to her fingers. A year after the injury the IW had surgery to her left hand. She returned to work. Some twenty (20) months after the accident she stopped working, claiming she also had developed “Right Hip Trochanteric Bursitis; Right Hip Labral Tear.” These conditions weredenied administratively both by the District and Staff Hearing Officers. The IW appealed to the court of common pleas.

In August, 2017 Ph.D. M diagnosed the IW with “Major Depression, Recurrent, Severe without Psychotic Features” as a direct and proximate result of her work injury. Ph.D. M’s history included sexual abuse as a child, adolescent, and in her first marriage. The Bureau of Workers’ Compensation sent the IW to Ph.D. Ko who supported the causal relationship to her work injury, omitting any history of her being a victim of sexual abuse and other stressors including her current marriage. Ph.D. Ka conducted a thorough psychological examination, including objective testing, something which hadnot been performed in the two prior psychological examinations.

Ph.D. Ka diagnosed a “Major Depressive Disorder, Recurrent, Moderate Severity” unrelated to the work injury. He also was aware that current Ohio Lawrequires that an additional psychological condition be caused by the work injury. Since both the labral tear and the bursitis had beendenied in the Claim, the District Hearing Officer disallowed the psychological condition being alleged.

Claim 17-208220. On September 4, 2017, the IW injured his low back while closing a truck tailgate door in loading a lawnmower in the course of his landscaping work. His claim was allowed for a lumbar sprain. On October 19th, the IW had returned to work full duty and was part of a crew performing landscaping services at a customer apartment complex. The manager of the complex called the employer’s main office with a resident’s complaint of a broken patio door caused by a rock striking the door in the area where the IW was using the industrial mower. The employer’s manager came to the complex and discussed the incident with the manager and agreed to repair the broken door. The IW disputed that he was involved in the accidental damage with the manager, but the manager and advised the work crew, including the IW, that the matter was handled and not to dispute the matter with the complex or resident and leave the work site.

Unbeknownst to the employer, the IW returned to the worksite moments later and paid a visit to the resident who reported the damage and began to dispute the incident and his role in it. The manager of the complex called the employer to express the deep disappointment in one of its residents feeling threatened by the IW. When the IW next returned to the employer’s office, the manager discussed with the IW the extremely problematic behavior of approaching the resident and terminated the IW on October 23rd. Subsequently, the IW filed for temporary total compensation alleging he was unable to work between November 4th and December 3rd, allegedly as a result of his allowed physical conditions.

Before the District Hearing Officer, evidence was prepared and offered in the form of documentation and testimony that the IW was not entitled to disability compensation because he had voluntarily abandoned his employment. The DHO noted that the employer had provided evidence that the Separation Report revealed that the IW had been terminated for “Misconduct,” and specifically for “Insubordination and violation of or failure to follow work rules and procedures” and “abusive conduct toward employees and/or customers.” Evidence was provided that the handbook clearly classified this conduct as an immediately terminable offense.

The employer was successful in establishing that the IW was terminated for a written work rule related to insubordination and abusive conduct toward customers, this rule was known to the IW or should have been known and constituted voluntary abandonment of his employment precluding temporary total compensation pursuant to theLouisiana-Pacific case decided by the Ohio Supreme Court.

Claim 14-820563. On March 11, 2014 the IW tripped over a vacuum cleaner cord and fell, fracturing her elbow. It was surgically repaired and she returned to light duty, eventually taking a different light duty job with another employer. Approximately two (2) years after the injury the Claim was additionally allowed for “Complex Regional Pain Syndrome/Reflex Sympathetic Dystrophy (CRPS/RSD) Left Upper Extremity.”

The IW stopped even limited duty work and started collecting Temporary Total Compensation effective July 1, 2016. She began treatment at The Cleveland Clinic Pain Clinic where she received a series of stellate ganglion blocks. By Summer. 2017 it appeared that she could return to a limited duty position but her attending family physician continued to keep her off work. The IW claimed her symptoms had migrated to her right lower extremity and that she needed to be treated with a spinal cord stimulator. The Employer became suspicious, in part due to the insights of the nurse case manager who felt the IW’s symptoms had become inconsistent.

Surveillance was undertaken which showed the IW using her left upper extremity to close a SUV door, carry an umbrella, make calls and take pictures with her cell phone, clap her hands at her middle school aged son’s football game, and so forth. A new independent medical examination was scheduled with M.D. H, a physical medicine specialist. After he completed his examination, he was sent the surveillance tape. Further highlights showed the IW walking normally with her right lower extremity across stadium bleachers holding a soda pop bottle with her supposedly symptomatic left upper extremity.

On cross-appeals from the District Hearing Officer, the Staff Hearing Officerdenied right lower extremity CRPS/RSD and the spinal cord stimulator. The IW was declared to have reached Maximum Medical Improvement.

Claim No. 17-185318: The Ohio Industrial Commission granted the Employer’s appeal and vacated a prior order allowing a long-time assembler employee’s carpal tunnel/cubital tunnel claim. Evidence presented at the appeal hearing included a summary of Claimant’s work activities that minimized the time spent with vibrating tools and repetitive tasks. We also highlighted Claimant’s pre-existing risk factors of diabetes and high body mass. Finally, we pointed out that Claimant had worked for years at the assembler position without issue, and then had been removed from the assembler position for months with no abatement of hand/wrist/elbow symptomology.

Industrial Commission Update

The Industrial Commission has issued several Memoranda over the past year, two of which are based on noteworthy court decisions discussed above. These Memoranda are designed to provide “guidance” to Hearing Officers in applying the law as interpreted by the Ohio Supreme Court.

Memo B2. Substantial Aggravation (Effective 08/25/2017).

In light of the Clendenin case, the Industrial Commission instructed Hearing Officers to be especially clear on the bases of decisions for substantial aggravations. The “substantial aggravation” standard only applies to claimsafter August 25, 2006, the date on which this legal provision became effective. Similarly, “abatement” of the substantially aggravated condition is only possible with these claims.

By legal definition, a substantial aggravation must be evidenced by objective diagnostic findings, objective clinical findings, or objective test results. Whether a substantial aggravation has occurred is alegal rather than medical determination. “...(A)lthough it is necessary that the hearing office rely on medical evidence that provides the necessary documentation pursuant to the statute, it is not necessary that the relied upon medical evidence contain an opinion as to substantial aggravation.”

Consistent with Clendenin, finding that a substantially aggravated condition has abated, or returned to baseline, is an extent of disability decision which isnot appealable to common pleas court. The claim remains allowed for the substantial aggravation. “Hearing officers are to handle requests for additional compensation or treatment after an abatement finding as they do requests for a new period of temporary total disability after a finding of maximum medical improvement.”

The Industrial Commission has issued two Memoranda in the past year. These Memoranda are designed to provide “guidance” to Hearing Officers in applying the law based on recent developments in Ohio.

Memo C1. Firefighters’ and Police Officers’ Occupational Disease (Effective 8/25/2017).

This Memo, which the Commission adopted in the aftermath of Ohio Senate Bill 27, discussed more thoroughly below in the BWC update, looks to guidance hearing officers in the application of a rebuttable presumption in dealing with cancer-related claims filed by first responders like police and fire fighters. The Memoranda sets fort the affirmative evidence that would be used to rebut the presumption that the disease he or she suffers from was contracted or induced in the course of and arising out of the employment, and therefore, is compensable.

Memo D5. Voluntary Abandonment (Effective 05/17/2017).

This Memo is based on the Cordell case. It differentiates three (3) logical types of voluntary abandonment. The most straightforward is voluntary retirement from the workforce. If the retirement is based on the “voluntary” choice of the worker then future temporary total or permanent total benefits are precluded. If the retirement is due to the allowed conditions in the claim, then it is not considered “voluntary.” Future compensation for being off work is possible if the appropriate criteria for compensation have been met.

Closely related to voluntary retirement is “abandonment of the entire workforce.” This may or may not be a result of the industrial injury. When it does result from an industrial injury, the correct inquiry centers on whether the worker has sought other employment. A typical scenario would be an injury followed by some period of temporary total, an end to the temporary total, and future medical treatment. If there has beenno attempt to re-enter the workforce, future wage replacement benefits are precluded regardless of whether or not the worker could return to the former position of employment.

The third type of voluntary abandonment is described by Cordell and requires review on a case-by-case basis. In pursuing this inquiry, theCordell test should be addressed: off-work benefits may not be denied where: (1) the worker remained medically incapable of returning to work due to the injury; and (2) discovery of the dischargeable offense occurredbecause of the injury.

Memo M7. Treatment Requests (Effective 8/25/2017).

This Memo simply sets forth the providers who may submit treatment requests in a BWC claim for physical and psychological conditions. For physical conditions, the Memo guides the Hearing Officer that such treatment requests may be submitted by a Medical Doctor, a Doctor of Osteopathy, Chiropractor, Advanced Practice Nurse, Nurse Practitioner, Clinical Nurse Specialist, Physician Assistant, Physical Therapist, Occupational Therapist, Optometrist and Audiologist.

For psychological conditions, the treatment request would need to be submitted by a Psychologist, Medical Doctor, Doctor of Osteopathy, Licensed Clinical Counselor or a Licensed Independent Social Worker.

Ohio Administrative Code Revisions

Two provisions of the Ohio Administrative Code that govern proceeding before the Ohio Industrial Commission were also revised. Ohio Administrative Code 4121-1-02 and 4121-1-03 (Effective February 8, 2018), were revised to clarify the rules for public meetings and non-adjudicatory meetings of the Industrial Commission.

Bureau of Workers’ Compensation News

Another Billion Back

On April 24, 2018, Ohio Governor John R. Kasich and Ohio Bureau of Workers’ Compensation (BWC) Administrator/CEO Sarah Morrison proposed giving Ohio employers another $1.5 billion in premium rebates this summer. The rebate was proposed to BWC’s board of directors and the board will take up a vote at its May 24th meeting. If approved, rebate checks would likely be mailed in July and August. The proposed rebate equals 85% of the premiums paid for the policy year that ended June 30, 2017 (calendar year 2016 for public employers). With this rebate, BWC will have saved employers $8 billion in workers’ compensation costs since 2011 after considering other rebates, credits, greater efficiencies and several rate reductions, including two this year.

In the past year, many changes to the Ohio Workers’ Compensation system were implemented and/or have recently become law. A summary of some of the more intriguing updates follows:

Changes Affecting Ohio State Fund Employers
Another Round of Refunds

The financial position of the Ohio State Fund continues to be quite healthy. Strong investment returns and reductions in claims cost allocations continue to outpace the BWC’s recent rebates and premium transition credits totaling over $3 billion, increases in safety grant funding, and reduction of employer premium rates.

As a result of the BWC’s net surplus of $9.6 billion, the BWC announced in Spring 2017 yet another round of “Billion $ Back” refunds, the 3^rd such rebate in the last 4 years. An estimated total of over $1 billion is on track to be refunded to State Fund employers by late October 2017. The rebates are based on premiums paid for 2015 policy years, and will provide employers with a refund of 66% of premiums calculated for that year.

A few interesting tidbits about this rebate:

• Public employers, since they already received a 50% credit as part of the transition to paying premiums in advance, are getting refunds ~16% higher than the amount they actually paid to BWC.

• Public employers enrolled in group retrospective rating programs are potentially adding rebates, payable in Spring 2017 through Spring 2019, to this “profit” position.

• Private employers, since they received a 16.67% credit as part of the transition to paying premiums in advance, are seeing net premiums of 17.34% versus the calculated premium for the July 2015 PY.

• Private employers enrolled in group retrospective rating programs are potentially adding rebates payable in Fall 2017 through Fall 2019, and could ultimately realize a “negative net” premium for the July 2015 policy year.

Expanded Handicap Recovery

Currently the Ohio handicap reimbursement provision permits reduction of medical and “total

disability” costs charged to an employer, including associated reserves if applicable, based on the impact of a defined listing of pre-existing conditions on the complexity and costs of a claim.

Settlement amounts, since they are not disability compensation per se, have historically not been reducible by the handicap recovery. In fact, when a claim with a handicap recovery also has a settlement, a rather complicated allocation-type calculation is required to derive the total claims cost reduction resulting from the handicap recovery.

House Bill 27 has changed the handicap rules so that the handicap recovery also will be applied to settlement payments.

BWC has not finalized how they will implement this change, but they plan to propose to apply the new rules only when the settlement effective date or handicap recovery determination is after the September 29, 2017 effective date of the Bill.

Changes Affecting All Employers

Firefighters Cancer Claim Rebuttable Presumption

In Spring 2017, Ohio Senate Bill 27 expanded the scope of claims of work-related cancer filed by firefighters.

Under this Bill, “cancer contracted by a firefighter who has been assigned to at least six years of hazardous duty as a firefighter constitutes a presumption that the cancer was contracted in the course of and arising out of the firefighter's employment, if the firefighter was exposed to an agent classified by the international agency for research on cancer or its successor organization as a group 1 or 2A carcinogen.” The law states this presumption is rebuttable if there is evidence that:

• The firefighter was not exposed to an agent classified by the international agency for research on cancer as a group 1 or 2A carcinogen;

• The firefighter has been exposed to cigarettes, tobacco products, or other conditions presenting an extremely high risk for the development of the cancer alleged, or was probably a significant factor in the cause or progression of the cancer;

• The firefighter incurred the type of cancer alleged before becoming a member of the fire department;

• It has been more than 20 years since the firefighter was last assigned to hazardous duty as a firefighter.

• The firefighter is 70 years of age or older.

Statute of Limitations for Filing Claims

Currently in Ohio a workers’ compensation claim is considered timely if it is filed within 2 years of the date of injury or other defining date of occupational disease. House Bill 27 reduced that statute of limitations, for injury or death claims only, to 1 year, for all new claims occurring on or after September 29, 2017. The statute of limitations for filing occupational disease claims remains at 2 years.

This could seemingly have an impact on motor vehicle accidents claims where the filing of the workers’ compensation claim were purposefully delayed until insurance and other recoveries have been obtained. The subrogation process and associated recoveries under such circumstances could also be impacted.

Extended Time for Appeals to the Common Pleas Court

Currently an appeal to the Court of Common Pleas is due within 60 days from the Industrial Commission’s final order. New Ohio law extends appeal timeline to 150 days, but only if the claimant or employer files notice of intent to settle the claim and other party does not object to that intent.

This change should help to facilitate settlement of claims without the costs of legal activity surrounding the filing of/response to the Court actions. This applies to new claims occurring on or after September 29, 2017.

The legislation also increases the maximum award of attorney’s fees for a successful court challenge from $4,200 to $5,000.

Incarcerated Dependents Cannot Receive Compensation

It has long been the case that incarcerated Ohio workers’ compensation claimants could not receive compensation payments. However, this rule did not prevent a dependent (ie widow/child in a death claim) from receiving compensation payments during a period of incarceration. The new law corrects this situation and bars payment to incarcerated dependents as well.

90 Day Extent of Disability Examinations

Per statute, the BWC is required to examine claimants who are collecting temporary total disability every 90 days. These examinations are currently scheduled “automatically” by BWC (but in practice often require prodding of the BWC by employers or their representatives). Per the new law, the BWC may now waive the 90-day examination for good cause. However, if the employer objects to the waiver, the BWC shall be required to schedule the examination.

Permanent Partial Examination No-Shows

Currently if a claimant repeatedly does not show for scheduled BWC examinations related to a filing for percentage of permanent partial benefits (C92), the BWC may suspend the claim until the claimant formally promises to comply. However, over the years this has resulted in ~20,000 claims statewide being suspended for this reason, and remaining in that status. The new law empowers the BWC to dismiss the C92 application entirely due to a failure to appear for BWC examination(s).

July 2018 Policy Year Rates Announced

The BWC will be reducing private employer premium rates by an average 12% for the July 1, 2018 policy year. This reduction would save private employers $163.5 million over the current policy year's premiums, according to BWC’s analysis.

The current policy year’s rates, according to the BWC, are already at their lowest rates in at least 40 years.

BWC experienced 86,290 allowed claims in 2017, nearly an 18% drop from 2011. This is the lowest number of claims dating back to at least 1997, when there were more than 277,000 claims.

BWC's efforts to promote safe and healthy workplaces, increased safety funding and more employers putting safety education and resources to work, have contributed to this decrease in claims and premiums.

From 2010 through 2015, BWC's Division of Safety & Hygiene, which provides a wide array of no cost safety and other assistance to Ohio employers, saw a 71% increase in the number of employers using its safety programs and services.

BWC's private employer rates have decreased or remained unchanged every year since 2007, with the last reduction occurring in 2016. Public employer rates have fallen as well, including a 6.1% cut that took effect January 1, 2018.

Of course, rate adjustments for an employer’s particular manual classifications vary widely between the BWC’s self-imposed caps of +14% to -36%. Additionally, expected loss rates, which drive experience calculations, also saw an overall decrease, which could result in higher experience modifiers that would at least partially offset base rate reductions.

Employers’ third-party administrators or other resources should be consulted to determine how their individual premiums may be affected by these BWC rate changes.

Motor Vehicle Accidents Not Chargeable – Practical Observations

As a result of the passage of House Bill 207, if a State Fund employer can establish that an employee’s claim is a result of a motor vehicle accident involving a third party in which the employee was not at fault, BWC may exclude the cost of the claim from the employer’s future premium rating calculations. This policy is effective for accidents occurring on or after July 1, 2017.

The law, as currently written, requires that the third party at-fault driver have active insurance coverage, or the employer has active uninsured motorist’s insurance coverage,and the at-fault driver must have been issued a citation as a result of the accident, to obtain the claim cost exemption.

Initial experiences with this new procedure have revealed that the issuance of a citation can prove to be a stumbling block in gaining BWC approval of the exemption. Since issuance of a citation tends to be discretionary, we are finding that they are not always available. BWC thus far has adhered to the letter of the law as currently written, and is denying relief absent an actual citation.

Failure to meet all the requirements of this new statute, however, does not prevent the BWC from pursuing their rights to subrogate against a third party, and provide proportional relief to the employer’s rating experience based on the amount they recover.

Proposed Rating Experience Changes / Premium Credits for July 2019 Policy Year

BWC analyses suggest that premiums for individually rated State Fund employers (those who are not in group experience rating programs or involved with PEOs) may not be adequately aligned to their actual claims costs. As a result, BWC is proposing a number of changes to the core factors which govern BWC’s experience rating calculations, and the resulting premiums charged to this set of employers.

The proposed changes, which are in the process of review and approval, include:

• Introducing a Premium Size Factor to reduce the premiums of individually rated employers who pay in excess of $5,000 in annual premium. The current proposal recommends:

o A 15% discount on premiums between $5,000 and $100,000

o A 20% discount on premiums between $100,000 and $500,000

o A 25% discount on premiums above $500,000

• Reduce the maximum chargeable claims losses and experience credibility factors for the smallest Ohio employers

o The current $12,500 per claim maximum in place for very small employers would be scaled to between $2,000 and $8,000, depending on size (as measured by expected experience period losses)

o Increase experience credibility factors for medium to large employers

▪ Credibility factors applied to larger employers would rise towards the 53% maximum more quickly under the current proposal

▪ This should result in a more significant influence of loss ratios on experience modifiers and resulting premiums

• Introduce an experience modifier adjustment factor for individual employers. The current proposal recommends:

o An experience modifier adjustment credit of 5% for EMRs 0.90 and lower

▪ ie a 0.80 EMR would be adjusted to 0.76

o No adjustment factor for EMRs 0.91 to 1.99

o An experience modifier adjustment penalty of 5% for EMRs 2.00 and higher

▪ ie a 2.25 EMR would be adjusted to 2.36

• Revise group retrospective rating program basic premium factors to compensate for the impact of above changes

o Base premium factors would increase by 4-6% for most currently available group retrospective rating programs

▪ This would reduce the potential performance-based refunds available to participating employers

As mentioned, these proposals have already evolved from their original form, and may change further before final approval by the BWC’s Board of Directors. However, the BWC seems intent on making these changes effective for the July 1, 2019 policy year.

The changes mean that long-standing rating program selections should be closely examined to determine if they still provide optimum results, especially for employers with larger premium and/or moderate loss ratios.

Employers’ third-party administrators or other resources should be consulted to determine how their premiums and alternative rating program options may be affected by these proposed changes.

BWC Wellness Initiative

Through their recently announced “Better You, Better Ohio” program, BWC is taking steps to introduce wellness resources and services to workers who work for small employers (50 or fewer workers).

At present, this program is limited to the following high-risk industries: Agriculture; automotive repair and service; construction; firefighters; health care; manufacturing; police and public safety; public employers; restaurant and food service; transportation and trucking; trash collection; wholesale and retail.

Upon being identified by Ohio’s WC Managed Care Organizations (MCOs), and agreeing to participate, injured workers can qualify for free services such as:

• Health and wellness awareness, education and training

• Health assessments & biometric screenings to better understand their health and well-being

• A website allowing them to develop health plans & track progress to achieve their health goals

• A state-of-the art mobile app for creating weekly action plans and getting health tips

• Digital coaching to help them on their journey to better health.

This program, still in its infancy, strives to extend the BWC existing Wellness Grants program, which offers up to $15,000 in refunds to employers (usually larger ones) who implement a comprehensive Wellness program including measurements and coaching to address at risk health behaviors.

Payment of Initial Compensation Expedited

Currently, if sufficient wage information is not on file, calculation of the Full Weekly Wage (FWW) cannot be accomplished, and therefore Temporary Total compensation cannot be initiated. The new law requires that in these cases, the FWW shall be established equal to 1/3 of the statewide average weekly wage, and compensation paid accordingly. When the necessary history of prior wages is filed, the compensation rate and amount due will be adjusted with either additional payment made, or in the case of a lower FWW, a declaration of overpayment will result.

BWC Funding Raid Averted

House Bill 49, among many other things, permitted the Ohio Office of Budget & Management (OBM) to transfer up to 2% of the annual BWC/Industrial Commission funding appropriation to the State’s General Revenue Fund.

In response to this unprecedented action, on July 7, 2017 a meeting between the Director of the OBM and Members of the Ohio Business Community was held. The result of this meeting was a signed Memorandum of Understanding between the Business Community and the OBM, including commitments that:

• The OBM will not exercise their authority to transfer funds before January 13, 2019;

• If the OBM intends to access the BWC/Industrial Commission’s funding, they will provide at least a 14-day notice to the Ohio Business Community’s counsel;

• The Ohio business community will not take legal action (prior to January 13, 2019) based on the authority granted under the Bill;

• The OBM will not oppose legislative efforts to remove or negate the offending language in the Bill.

About the Author

Michael Brown, ARM is an Account Executive with Paramount Preferred Solutions, a Third Party Administrator (TPA) recognized nationally for expertise in all aspects of Workers’ Compensation, Group Health, and Disability Management solutions. Michael has over 37 years’ experience in the Workers’ Compensation and Risk Management business since obtaining his mathematics & statistics degree from Miami University in Oxford, Ohio, and is also a licensed Health Insurance agent.

In addition to experience as a claims examiner and hearing representative, Michael has consulted with employers on the development and maintenance of best in class strategies, including evaluating the wide array of risk financing options available to employers. Michael has also served as a Workers’ Compensation and Employee Benefits Manager for a multi-facility self-insured employer. This experience and his certification as an Associate in Risk Management (ARM) affords him in-depth insight into creative and wide-reaching solutions to the most complex Workers’ Compensation challenges.

With his extensive experience in the field of workers’ compensation and other employee benefit matters, Michael consults with employers in a number of ways to allow them to save time and money by reducing the risk and costs of illness and injury. Please feel free to reach out to Michael at mike.brown@promedica.orgor (877) 765-4200 ext. 270.

DWC Commissioner Ryan Brannan announced his resignation, effective May 1, 2018. Commissioner Brannan was appointed by Governor Rick Perry in August 2014 and was reappointed twice by Governor Abbott. We wish him well in all his future endeavors!

New Jersey adjusters sometimes ask why future benefits under an order approving settlement with a percentage of disability cannot be paid in a lump sum to the injured worker.  In other words, why is there a requirement that future payments be paid out over a period of many weeks or even many years? This question goes to the foundation of the New Jersey system.  The New Jersey Act is social legislation, and Judges of Compensation are required to look out for the best interests of injured workers.  There is a legislative conviction that dependable weekly payments of permanent partial or total disability are almost always in the best interest of injured workers.  The right to reopen workers’ compensation cases is extended until two years from the last payment, (which benefits the employee), and the insistence on weekly payments avoids the temptation to risk a large sum of money in an exercise of bad judgment, perhaps gambling or betting on a hot stock.

If an adjuster were to mistakenly advance, for example, 100 weeks of future payments in one lump sum, this would amount to an impermissible commutation.  There is a procedure under N.J.S.A. 34:15-25 for employees to obtain a commutation of future payments, but an application must be filed with the Director of the Division for judicial permission to commute an award. Usually the Judge of Compensation who approved the settlement hears the commutation request.  The statute reads, “Compensation may be commuted . . . at its present value, when discounted at five per centum (5%) interest, upon application of either party, with due notice to the other, if it appears that such commutation will be for the best interest of the employees or the dependents of the deceased employee, or that it will avoid undue expense or undue hardship to either party. . .”

There are few published cases on commutations, but generally judges focus on whether there is an undue hardship on the injured worker or family or a compelling need that may justify a lump sum commutation.  One example comes from Harrison v. A & J Friedman Supply, Co., 372 N.J. Super. 326 (App. Div. 2004) where the applicant, a dependent spouse, applied for a commutation of a dependency award because the building she resided in was in default to the City of New York, giving her the opportunity to purchase her Manhattan residence for $370,000.  She could obtain a mortgage for about half that amount, but she needed to commute future permanency payments to raise the balance of the purchase price.

The Judge of Compensation reviewed the New Jersey Administrative Code provisions on commutations.  The relevant code provision provided, “No award for total disability or dependency benefits shall be commuted.”  The Judge of Compensation therefore denied the application, and the petitioner appealed.  The Appellate Division disagreed with the administrative code provision.  It said, “A plain reading of this statute, spurred by the absence of any limit on the types of compensation benefits that may be commuted, suggests that the discretion to permit commutation was intended to encompass all types of benefits, including the total disability and dependency benefits specifically referenced in N.J.A.C. 12:235-6.3 (d).”  The Court held that under certain circumstances a commutation may be made in dependency and total and permanent disability cases.

The Court did not order the commutation but it sent the case back to the Judge of Compensation for further proceedings.  “Certainly, upon remand, the parties should be afforded an opportunity to present information regarding the appellant’s financial status, her ability to maintain her lifestyle in the absence of the weekly benefits, the value of the property appellant is desirous of purchasing, the availability of funds other than the dependency benefits, and the availability of other financing that might render commutation unnecessary.”  As one can see from reading this quotation, commutations are not simple matters.  Judges must analyze many different issues and develop an understanding of the injured workers’ financial status before making an informed decision.  It is a case by case analysis often requiring substantial testimony. In actuality, there are surprisingly few commutation requests annually in the Division.

This legislative preference for weekly payments of permanency benefits also explains why annuity companies are less involved in New Jersey than in other state workers’ compensation systems.  In many states, an annuity company may offer an injured worker a stream of payments changing over time, perhaps increasing in future years at a higher rate. But in New Jersey payments must be made according to the statute.  If an award is entered for 60% permanent partial disability, it is paid out over 360 weeks at one set rate.  If an annuity company were to contract with the employer to make those 360 weeks of payments, the annuity company would be required to make the payments at the rate established in the court order.  The annuity company could not vary the rate or increase the rate while shortening the period of payments or make any other material change without the permission of a Judge of Compensation.

Over all, the New Jersey system makes good sense, even though injured workers may sometimes be disappointed that their payments must be spread out over many weeks.  Settlements by lump sum payments do happen frequently in New Jersey, of course, under N.J.S.A. 34:15-20, but these settlements are only available where there is a genuine issue of causation, liability, jurisdiction or dependency.  A smaller percentage of cases is settled under Section 20 than on a percentage basis under N.J.S.A.  34:15-22.

The New Jersey system is designed to provide protection for injured workers and their families by creating a steady and dependable stream of tax free payments over a period of weeks or even years, depending on the severity of the injury and its impact on the employee’s work or non-work life.  Permission to apply for a commutation is potentially available to any recipient of a percentage disability award paid out over future weeks, but the employee must prove to the Judge of Compensation that such a commutation is in his or her best interest.

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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. 

New Jersey employers like reopener claims about as much as homeowners like back-to-back blizzards.  The general view is that employers have virtually no defenses and have to pay more with each reopener. The truth is that employers can win reopener cases where the petitioner’s expert cannot really prove the petitioner’s condition has worsened since the prior award.  Garces v. Mid-State Lumber Corp, A-4199-15T4 (App. Div. April 10, 2018) provides a good example.

Petitioner suffered two compensable accidents on October 16, 2009 and December 11, 2009 leading to an order approving settlement for 66.67 percent partial permanent disability described as orthopedic and neurologic in nature for residuals of a herniated disc L3-4 and L4-5 status post lumbar laminectomy and fusion.  Respondent received a credit of 27.5% for previous disability.

On June 15, 2013, some fifteen months after entry of the award of 66.67% petitioner filed to reopen his case.  Petitioner testified in the reopener, and he produced two experts.  Dr. Becan was petitioner’s orthopedic expert, and Dr. Peter Crain was petitioner’s psychiatric expert.  The treating surgeon, Dr. Carl Giordano, saw petitioner and concluded petitioner needed no further treatment.

Dr. Becan saw petitioner twice, once in 2011 before the first award and again in 2014 for the reopener examination.  He raised his estimate to 90% of partial total.  On the reopener exam he wrote that petitioner’s disability had increased by 20% of partial total. When asked about the objective findings that supported the increase, he said petitioner “walked with a guarded and antalgic gait pattern,” “had a noticeable limp on the right,” and “was unable to heal or to walk on his right leg.”  He also found “right-sided sacroiliac joint tenderness.”  He noted restrictions when he put petitioner through various maneuvers like straight leg raising.

On cross examination, Dr. Becan conceded that many if not most of his restrictions were the same as they were in 2011.  The two reports were compared, and it turned out that petitioner’s range of motion tests were actually better in 2014 than in 2011.  Petitioner’s muscle strength testing of the quadriceps and hamstring was better.  The right ankle jerk reflex had improved.  Backward extension was the same, and straight leg raising improved.

The Judge of Compensation examined the two reports closely and concluded that Dr. Becan’s findings on the new 2014 examination were not worse at all.  He further noted that while Dr. Becan said petitioner could not return to work, the doctor did not know what petitioner’s job duties were.  The Judge concluded that Dr. Becan had simply offered a net opinion, which is an opinion not supported by any evidence.  The Judge also noted that petitioner’s psychiatric expert, Dr. Crain, had done the same thing.  He also failed to offer any objective evidence of worsening.

The Judge of Compensation dismissed petitioner’s reopener claim and petitioner appealed.  The Appellate Division made short work of the appeal and commented that there was sufficient credible evidence to support the dismissal of petitioner’s case.

The case illustrates an important point.  In valuing a reopener claim, practitioners often focus on the percentage increase that the expert for the claimant offers.  But the better way to value a reopener case is to look beyond the mere estimate of increased disability and compare the pre- and post- award reports side by side.  If the actual measurements, range of motion and findings are the same or better on reopener, it doesn’t matter that the claimant’s doctor raised his or her estimate.  The percentage of increase in an IME means nothing if the actual test results appear to be the same.   There are other ways to win reopeners as well, such as proving that a new non-work event or new employment has worsened the petitioner’s condition.  All of these approaches do give respondents a fighting chance in defending reopeners.

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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.

Gist v. Atlas Staffing, Inc., A17-0819 (Minn. Apr. 4, 2018)

In this case, the Employee worked for Atlas Staffing, and was consistently exposed to silica sand. After he left his employment, he began treating roughly one month later for kidney failure. He was diagnosed with end stage renal disease. He eventually filed a Claim Petition seeking benefits from the Employer and Insurer. Fresenius Medical Care, a clinic which provided medical care to the Employee, intervened seeking reimbursement for the difference between the treatment costs it had billed to Medicaid and Medicare and what it was actually paid. Approximately 1.5 million dollars in medical bills were at issue. The matter proceeded to a Hearing, where the compensation judge held that the silica exposure was a substantial contributing factor to the Employee’s condition and that the judge lacked jurisdiction to interpret Medicaid and Medicare laws. The Employer and Insurer were ordered to pay Fresenius in accordance with other state and federal laws.

The Employer and Insurer appealed the decision to the WCCA, which largely affirmed the compensation judge’s decisions. Notably, the WCCA concluded that the compensation judge properly rejected the Employer and Insurer’s argument that a medical provider that accepts payments from Medicaid and Medicare is barred from receiving workers’ compensation payments. 

The Employer and Insurer appealed the decision to the Minnesota Supreme Court on five separate issues. The Supreme Court affirmed the compensation judge’s decision regarding liability for the injury itself. They held that the compensation judge had adequate medical evidence to conclude that the silica had led to the Employee’s kidney failure. A large portion of the opinion was devoted to the Medicaid and Medicare issue. The Court ultimately rejected the contention offered by Fresenius that the “Spaeth-balance” rule be extended to the Medicaid context. Under the Spaeth rule, a treatment provider is still entitled to payment from a liable employer/insurer even if the provider has received partial payment from a third party, such as a private insurance company. Furthermore, the Supreme Court interpreted the plain language of 42 C.F.R. § 447.15, and concluded that when a medical provider bills services to Medicaid and accepts Medicaid payment for those services, it accepts the amount paid as “payment in full.” Therefore, by accepting those payments, the provider is then barred from recovering any additional amounts for those services from a liable employer.  

This decision will be important for employers and insurers to take note of, as it limits liability exposure when dealing with medical providers who have received partial payment from Medicaid or Medicare.

Summary by: Parker T. Olson

parker.olson@cwk-law.com

Graboksy v. ISD 720, No. WC17-6099 (W.C.C.A. Feb. 9, 2018)

In this case, an employee slipped on a staircase at work on February 8, 2016 and felt pain in her upper shoulder and upper neck. She also claimed that the incident caused headaches and numbness in her left hand. The employee had a significant history of pre-existing left shoulder, neck, and headache pain dating back many years. Notably, she treated for left shoulder pain two weeks prior to the alleged injury. She filed a Claim Petition, and the employer and insurer denied liability.

An Independent Medical Examination was completed by Dr. Howard Saylor on April 6, 2017. He concluded that the work injury did not significantly aggravate the pre-existing condition or need for treatment. He further concluded that, “in my opinion, the incident of February 8, 2016 caused a temporary aggravation of [the employee’s] pre-existing condition and left thoracic outlet syndrome complaints, which has not yet resolved.” The interpretation of this sentence was disputed between the parties. The matter went to a Hearing where Judge Grant Hartman concluded that the Employee’s work injury was a temporary aggravation of her pre-existing condition that it had resolved by March 1, 2016 (which was less than one month after the injury).

On appeal, the Employee argued that Judge Hartman’s conclusion was not supported by substantial evidence in the record. In its decision, the WCCA took note that the Employee admitted that she experienced the same symptoms both before and after the work injury. Also, the WCCA found that Judge Hartman properly concluded that the medical records did not provide confirmation for the Employee’s increased symptoms. Lastly, and perhaps most notably, the WCCA interpreted Dr. Saylor’s wording in his IME Report of “which has not yet resolved” to be referring to the Employee’s pre-existing condition rather than a temporary aggravation. The WCCA affirmed Judge Hartman’s findings. This decision goes to show how important it is for IME doctors to clearly articulate their expert opinions. 

Summary by: Parker T. Olson

Wilson v. Twin Town Logistics, No. WC17-6022 (W.C.C.A. Feb. 9, 2018)

This case involves the issue of Roraff attorney fees. Here, an employee suffered a work injury and benefits were paid by Freestone Insurance. The employee eventually filed a Claim Petition seeking attorney fees, however Freestone was subsequently declared insolvent, so the employee’s claims were submitted to Minnesota Insurance Guaranty Association (MIGA). The employee’s claim for attorney fees was for $30,572.00 as excess fees underIrwin. The employer and insurer contended that the claim was excessive and that some of the itemized time had already been paid.

A Hearing was held before Judge Stacy Bouman, who concluded that the employee’s attorney was entitled to $3,000 “as and for a combination ofRoraff/Heaton fees and excess fees.” The employee’s attorney appealed the decision.

The WCCA affirmed the award. They concluded that Judge Bouman properly concluded that the issues presented were not complex or technically difficult despite the arguments that the employee’s attorney presented. Further, the WCCA held that Judge Bouman properly analyzed the itemization of fees and concluded that some of the time was excessive and duplicative. The WCCA gave deference to Judge Bouman’s decision and upheld the award of $3,000 in attorney fees.

Judge Milun wrote a dissent contending that Judge Bouman did not provide adequate rationale to support her decision, and that the employee’s attorney should be entitled to additional fees. She noted that it took the employee’s attorney two and a half years to obtain benefits for the employee, which. She also wrote that the WCCA’s decision in this case would have a chilling effect on petitioner attorneys in the area of workers’ compensation.

Summary by: Parker T. Olson

Azuz v. Vescio’s, No. WC17-6086 (W.C.C.A. Feb. 1, 2018)

In this case, the employee slipped and fell causing low back pain while at work. Liability was admitted, and benefits were paid. Years prior to the injury, the employee underwent medical treatment for her lower back pain. A prior x-ray revealed that the employee had degenerative disc disease at the L3-5 levels. There were numerous medical records referencing lower back pain and treatment pre-dating the alleged work injury.

The employee eventually underwent surgery. She was then examined by Dr. Robert Wengler, who assigned a 37% permanent disability rating based on the findings in the medical records. The employee was also examined by Dr. William Simonet on behalf of the employer and insurer. Dr. Simonet found that the Employee had reached MMI and required no restrictions. He also found that the employee had a 10% PPD rating unrelated to the injury. The case proceeded to a Hearing where the compensation judge denied the employee’s claim for wage loss benefits and a 37% PPD. The employee appealed.

The WCCA affirmed the compensation judge’s decision. They noted that the compensation judge properly weighed the opinions of the experts and that Dr. Simonet’s report was supported by adequate foundation. While the WCCA did vacate two findings in the compensation judge’s decision for misstating a medical record entry, this did not affect the overall affirmation of the underlying decision.

Summary by: Parker T. Olson

Ahmed v. Loop Parking Co., No. WC17-6074 (W.C.C.A. Feb. 13, 2018):

Pro se employee appeals denial of the claim for right knee MRI and payment of medical expenses. The employee had suffered a right knee injury while working as a parking lot attendant in 2012. He underwent surgery in October 2012. His orthopedic surgeon opined that he had exhausted all treatment options and reached MMI in January 2014. He was released without restrictions. In 2015, the claims were settled on full, final, complete basis except for reasonable, necessary, and causally related medical for the right knee.

In 2016, he treated for pain in his right knee for the first time in 18 months and denied any new injury. A February 2016 MRI showed an oblique tear and a parameniscal cysts. An IME was done, and the IME doctor opined that the current symptoms were caused by the mass and meniscus tear on the 2016 MRI and were unrelated to the 2012 injury. He opined that the 2012 surgery had repaired the tear, and no tear was present on a 2013 MRI.

WCCA affirmed the decision as the compensation judge’s findings were supported by the opinions of the IME doctor.

Summary by: Bryan M. Wachter

Guyton v. Hennepin County Medical Center, No. WC17-6103 (W.C.C.A. Feb. 13, 2018):

The Employee in this case sustained an admitted low back injury on August 16, 2016. She worked as a dietary aid at HCMC, which is a .9 full time equivalent position, and she frequently works overtime. The Employer paid wage loss benefits based on an AWW calculated by the human resources staff ($627.87). A QRC prepared an R-2 Rehabilitation Form with the AWW listed as “704.70 (est.)”. The Employee contacted the Department of Labor and Industry, which indicated that the AWW calculation using a regular schedule method was $56.00 and irregular earnings method was $639.76. The Employee filed a claim petition. Following hearing, the compensation judge found the AWW was $627.87 and rejected proposed alternative calculations by the Employee as unsupported or exceeding the 26-week period set out in Minn. Stat. §176.011. The compensation judge also rejected late submission by the Employee following the hearing. The Employee appeals.

WCCA affirmed the wage calculation as being supported by substantial evidence in the record. The 26-week averaging method was appropriate as it was a fair approximation of her earning capacity.

WCCA also found that there was no abuse in discretion by the compensation judge by excluding exhibits filed post-hearing.

Summary by: Bryan M. Wachter

Dahl v. Rice County, No. WC17-6093 (W.C.C.A. March 5, 2018):

The Employee was a deputy sheriff in Rice County. He suffered four admitted work injuries that resulted in a permanent low back condition. His employment with Rice County ended because his work restrictions could not be accommodated. He was given permanent restrictions following a 2013 functional capacity evaluation. He began working with a QRC in 2006. He held multiple different jobs for varying periods of employment. The QRC developed a retraining proposal in 2016 that he obtain a 3-year teaching degree at University of Mankato with a goal of becoming a high school teacher. Employer and Insurer objected to this proposal. The plan was revised to obtain a master’s degree in law enforcement and later revised to become post-secondary criminal justice and law enforcement teacher. The initial proposal of bachelor’s degree in education was ultimately considered by the compensation judge. The QRC testified regarding the job search efforts by the employee throughout the eleven year period. Employer and Insurer retained an independent vocational examiner who opined that the plan was not viable because there were not an adequate number of positions open, was concerned that the employee expected to teach a law enforcement related subject, and it would not necessarily restore the employee’s economic status. She also opined that the employee’s job search was not diligent and did not fully cooperate with rehab. The compensation judge concluded he was a candidate for retraining as a high school teacher and approved the proposed retraining plan. Employer and Insurer appealed.

The Employer and Insurer argue that the employee’s eleven-year job search was deficient, and it cannot be said that retraining was preferable to continued job search as there were no job logs. WCCA held that there was substantial evidence based upon the testimony of the QRC that he had conducted a diligent job search.

The Employer and Insurer argue that the employee failed to establish a likelihood that he would succeed in the program. WCCA held that there was substantial evidence in the record that supported the finding that he had the ability to succeed based upon vocational testing, opinions of QRC, and testimony of the employee.

The Employer and Insurer argue that the employee did not establish that the proposed plan was likely to restore his economic status. WCCA held that there was substantial evidence to support the judge’s finding, given that the judge explicitly rejected arguments of proposed alternatives as unreasonable and irrelevant to analysis of whether proposed retraining will place the employee in an economic status as close as possible to what he would have enjoyed if not for his work injuries.

Employer and Insurer also contended that the judge committed procedural errors by admitting records of the QRC that were first disclosed at the hearing and consideration of the employer and insurer’s expert witness by deposition rather than life testimony. WCCA held that these evidentiary rulings were not an abuse of discretion.

Summary by: Bryan M. Wachter

Miller v. Valley Paving Inc., No. WC17-6098 (W.C.C.A. Mar. 6, 2018)

The primary dispute in this case was whether the employee’s work injury was a temporary aggravation of a pre-existing knee condition or a permanent injury substantially contributing to the Employee’s ongoing disability.  

The parties agreed the employee, a construction worker, sustained a personal injury to his right knee after stepping backwards into a hole on August 31, 2015, arising out of and in the course of his employment.

Medical records revealed the employee had right knee treatment in April and May of 2014 after an injury playing basketball. Among the treating providers was Dr. Joseph Nemanich at Twin Cities Orthopedics. Following an MRI, the employee was diagnosed with a medial meniscus tear and ACL laxity. He was recommended for a meniscectomy but did not pursue any treatment thereafter until the work injury.

Following the work injury, he was diagnosed with a tear of the medial meniscus and underwent an arthroscopy by Dr. Nemanich in October 2015. The Employee was eventually laid off by the Employer in July 2016.

Dr. Nemanich prepare a report attributing the right knee problems to the August 31, 2015 work injury and gave a 2% PPD rating. Dr. Thomas Nelson performed an independent medical examination and opined the torn meniscus was present before the August 31, 2015, work injury, the work injury was a temporary aggravation of the employee’s pre-existing condition and no permanency was related to the work injury.

The compensation judge found the work injury to be permanent in nature and awarded benefits to the Employee. The employer and insurer, who raised issues with both the credibility of the employee and the adoption of Dr. Nemanich’s report, appealed the matter.

As to the credibility determination, the WCCA noted the compensation judge had made a specific finding that he “found the hearing testimony of the employee to be credible.” The court reasoned that it has previously held that a compensation judge is in the best position to consider the credibility of witnesses and while different conclusions can be drawn from conflicting evidence, there was no basis to reverse the credibility determination of the compensation judge.

With respect to the adoption of Dr. Nemanich’s medical opinion, the court stated one of the central functions of a compensation judge is to weigh competing medical opinions and the WCCA will uphold the compensation judge’s choice of medical opinion where there was adequate foundation for the opinion. In support of the compensation judge’s adoption of Dr. Nemanich’s opinion, the court noted, “We think it is significant that Dr. Nemanich, who concluded that the work injury was a permanent injury, had treated the employee for his knee problems in 2014 and was undeniably qualified to provide an opinion on this question.”

Summary by: Emily L. Johnson

Karkanen v. Univ. of Minn., No. WC17-6117 (W.C.C.A. Mar. 14, 2018)

The employee in this matter submitted a petition to vacate an award based on a substantial and unanticipated change in medical condition under Minn. Stat. § 176.461.

The employee worked as a veterinary technician for the University of Minnesota. She had a claimed back injury on April 17, 2010, when she was assisting in surgery being performed on a horse and was pulling and lifting large bags of fluid. The employee had a significant history of prior back injuries and treatment. In June 2010, she underwent a posterior lumbar interbody fusion at L5-S1.

The employer and insurer denied the claimed injury and the parties eventually settled the matter in April 2012, pursuant to a stipulation for settlement wherein the employee accepted a sum in exchange for a full, final and complete settlement of all claims with the exception of future medical expenses and permanent total disability benefits after 15 years.

Prior to settlement, the employee was working full-time under restrictions. She continued to have pain, which she rated at a 7/10 in records just prior to her settlement and was on several pain medications. 

Following the issuance of an Award on April 19, 2012, the employee continued to treat for the back, including multiple additional surgeries, injections, pain medication and physical therapy.

In its analysis, the court outlined the multiple factors set out in Fodness v. Standard Café, 41 W.C.D. 1054 (W.C.C.A. 1989) for evaluation of whether there has been a substantial and unanticipated change in medical condition: a change in diagnosis; change in the employee’s ability to work; additional permanent partial disability; necessity for more costly and extensive medical care than originally anticipated, a causal relationship between the covered work injury and the worsened conditions and the contemplation of the parties at the time of settlement. 

The WCCA held the employee failed to provide evidence to demonstrate the work injury was causally related to her present condition. Therefore, the court did not go into an analysis of any otherFodness factors and denied the employee’s appeal for a vacation of the award. The court rejected the employee’s argument that whether a causal relationship exists is a factual determination that should be made by a compensation judge at a hearing after the WCCA vacates the award.

Summary by: Emily L. Johnson

Weiss v. St. Mary’s Med. Ctr., No. WC17-6097 (W.C.C.A. Mar. 15, 2018)

In this matter, the WCCA affirmed the compensation judge’s determination that the employee had sustainedGillette injuries to her cervical spine and right shoulder where substantial evidence supported the finding. The WCCA also affirmed the compensation judge’s ruling that the employee’s average weekly wage could be preserved for future determination.

The employee worked for Essentia Health St. Mary’s Medical Center cleaning and sterilizing IV poles and associated pumps and equipment. The work involved her pushing around a supply cart throughout the hospital, which she did for over 13 years. At the time of the alleged injuries, the employee had been working a second, part-time job for Walmart as a cashier. The employee claimedGillette injuries to her cervical spine, right shoulder and left knee, with a culmination date of August 8, 2016.

Medical records showed sporadic treatment for her shoulders, hands and cervical spine, including a 1991 cervical strain which she attributed to pulling a heavy cart and a 2007 right shoulder sprain after trying to pull IV poles into an elevator. Her treatment ramped up in 2016 and she reported having neck, upper back pain and bilateral arm tingling for years and that her jobs aggravated her pain.

One of the employee’s treating physicians provided an opinion letter diagnosing right shoulder rotator cuff impingement and tearing and multilevel degenerative changes to the cervical spine and concluded the findings were significantly aggravated by her work for Essentia.

Independent Medical Examiner Dr. Loren Vorlicky agreed with the diagnoses of a right shoulder rotator cuff tear and acromioclavicular joint arthritis as well as multilevel degenerative disc disease of the cervical spine. He opined all of these were chronic degenerative conditions and the employee’s work activities at Essentia did not constitute a substantial cause of their development, aggravation, or acceleration.

The WCCA held that substantial evidence supported the judge’s finding that the employee sustained Gilletteinjuries to her cervical spine and right shoulder culminating on or about August 8, 2016.

As to the average weekly wage issue, the employee’s wages from her second job at Walmart being included in her weekly wage was not raised at the hearing and the compensation judge ruled that any claim for those was preserved for future determination.

The employer and insurer argued that the compensation judge erred as a matter of law by leaving the question of the weekly wage open with respect to the wages from Walmart because they were included at the hearing. The WCCA held they could not conclude the compensation judge abused his discretion by failing to make a final determination on an issue which even the appellant agrees was not actually raised.

Summary by: Emily L. Johnson

Mellgren v. Minn. Dep’t of Corr., State of Minn., No. WC17-6110 (W.C.C.A. Mar. 21, 2018)

Employee Lynn M. Mellgren sustained a non-work-related injury in February of 2000. A tear of the ACL, a medial meniscus tear, and degenerative changes of the medial compartment in the right knee was indicated in an MRI scan. She underwent arthroscopic surgery, then returned to work without restriction. After having a pain in the right knee in 2006 that was treated with a cortisone injection, she experienced no symptoms and was given no restrictions or treatment for her right knee from 2006 until 2016.

In 2016, the Employee was involved in an inmate altercation. Following this incident, she experienced soreness and then severe pain in her right knee. A work-related injury was admitted and wage loss and medical expenses were paid.

A March 2016 x-ray showed significant arthritis in the right knee, and the symptoms were opined to be a flare-up of either arthritis or a minor knee sprain. Conservative care and a cortisone injection were recommended. A second opinion was that the pain was from a torn ACL graft.  A third opinion given in a July 2016 IME was that the Employee had suffered a temporary aggravation of a pre-existing condition. The same IME found the Employee to be at MMI with no PPD, need for further medical treatment, or restrictions.

In February 2017 the Employee sought treatment, claiming that her symptoms had gradually returned. A Synsvisc injection was recommended, but denied by work comp based on the findings of the IME report. In June 2017, the IME doctor added to his initial report that the Employee’s condition was likely due to “chronic failure of a non-healing previous graft,” and that any further treatment would be to treat the underlying condition, not a condition brought about by the work injury.

The compensation judge agreed with the Employer that the work injury was not a substantial contributing factor for the Employee’s condition or need for treatment. On appeal, the Employee argued that the aggravation of a pre-existing condition had never resolved, that the need for the Synsvisc injection was therefore related to her work injury, and that as she only required treatment because of the work injury, the compensation judge erred. She pointed out six factors the court had used to assess aggravations of pre-existing conditions: “1) the nature and severity of the preexisting condition and the extent of restrictions and disability resulting therefrom; 2) the nature of the symptoms and extent of medical treatment prior to the aggravating incident; 3) the nature and severity of the aggravating incident and the extent of restrictions and disability resulting therefrom; 4) the nature of the symptoms and extent of medical treatment following he aggravating incident; 5) the nature and extent of the employee’s work duties and non-work activities during the relevant period; and 6) medical opinions on the issue.”  Lynn M. Mellgren v. Minn. Dep’t of Corr., State of Minn., No. WC17-6110 (W.C.C.A. Mar. 21, 2018), seeWold v. Olinger Trucking, Inc. slip op. at 4 (W.C.C.A. Aug. 29, 1994).

The Employer argued that the compensation judge’s ruling was supported by the IME opinion that the Employee’s condition was a temporary aggravation of a pre-existing osteoarthritic condition. A judicial opinion that favors one of multiple differing medical opinions should be upheld unless it was found to lack adequate foundation. Nord. V. City of Cook, 360 N.W.2d 337, 342-43, W.C.D. 364, 372-73 (Minn. 1985). The Court found that the compensation judge did not error by relying on the IME doctor’s opinion, as the doctor’s opinion was “not based on speculation or conjecture…” Additionally, no medical opinions found the work injury to be a substantial contributing factor to the right knee condition or need for the Synvisc injection, and the Employee failed to prove this connection.

Although the Court also noted that the Employee’s arguments were supported by evidence, it was not the Court’s role to determine whether such substantial evidence exists. Rather, the Court was to determine only if the compensation judge’s findings were supported by substantial evidence. As they found such evidence to exist, they affirmed.

Summary by: Megan M. Oliver

Colton v. Bloomington Plating, No WC17-6090 (W.C.C.A. Mar. 26, 2018)

Employee Thomas Colton sustained an admitted work-related injury in his work with Federated Mutual Group (“Federated”) and entered into a stipulation for settlement that closed out everything but future medical expenses. He was subsequently hired by the State of Minnesota, Department of Corrections (“DOC”), sustained another admitted work-related injury, and entered into a second stipulation for settlement in which everything but future medical was closed out.  The stipulation specified that DOC would pay future medical expenses, and that Federated would reimburse DOC for 44% of them. The Special Compensation Fund (“Fund”) would then reimburse Federated for their expenses.

State agencies, including DOC (collectively, the “State”), have a system for handling WC claims. Specifically, the State has a contract with CorVel in which CorVel provides services to manage care and bill payment, and keeps a network of medical providers for injured employees as well as “pharmacy benefit management services.” The State paid for medical expenses of the Employee for an approximately 2-year period of time, and submitted a request to Federated for 44% of the amount. Federated paid, and submitted a request for reimbursement to the Fund.

The Fund refused to pay the full amount claimed, claiming that the total paid for some prescriptions exceeded the maximum amount allowed and citing Minn. R. 5221.4070 subp. 4. The matter was eventually before a compensation judge.

At the hearing, the Fund additionally claimed that the amount requested for reimbursement included management fees that were not medical expenses and, as such, that it was not responsible for and contribution for them. Federation maintained its claim that the Fund should reimburse it or, if the Fund was correct in its position, that Federation should not have paid the amount to the State and should itself be refunded. Federated additionally sought .191 fees and penalties. The State argued that the relationship it had with CorVel altered how Minn. R. 5221.4070 applied. Specifically, that it was bound by subp. 5, and that subps. 3 and 4 did not apply. As the maximum fee in dispute fell under subp. 4, it was not relevant to this matter.

The compensation judge found that: 1) the payments that had been made by the State to CorVel were for medical expenses; 2) that subp. 5 controlled the services provided by CorVel and its relationship with the State; 3 and 4) Federated was not entitled to .191 fees or penalties.

On appeal, the Court affirmed that CorVel met the definition that bound it to Minn. R. 5221.4070 subp 5. The Court also found that “administrative costs were ‘woven into the prescription drug costs’” (Finding 4 of the compensation judge). As such, the lower court was again affirmed.

Federated filed a notice of cross-appeal on this matter. However, as the filing was one day late, the Court lacked subject matter jurisdiction and dismissed the cross-appeal.

Summary by: Megan M. Oliver

Perez v. Swift Pork, Co./JBS USA LLC and Sedgwick Claims Mgmt. Servs., Inc. and Minn. Dep’t of Human Servs./BRS, Avera Med. Group Worthington, and Avera McKennan Hosp., No. WC17-6106 (W.C.C.A. Mar. 26, 2018)

The Employee in this case was a Spanish speaker. She had a small stature and need to reach up often in her line of work with the Insured. In so doing, she developed right shoulder pain. She saw the on-site nurse a dozen times in less than a month with complaints of right arm pain. At each examination, she was found to have full range of motion. She eventually saw a doctor for her right shoulder pain and shortly thereafter underwent an IME. Both physicians noted that the Employee had full range of motion of her right shoulder. Additionally, the IME physician found that the Employee had only sustained a temporary strain of a pre-existing condition, was at MMI, and required no restrictions.

The Employee sought benefits, and the matter came before a compensation judge. Following the hearing, the Employee told her attorney that she was concerned about the English and Spanish translations, that she had trouble understanding and hearing the interpreter, and that she believed that not everything had been interpreted. While the Employee’s attorney did mention this to the Employer’s attorney, he failed to bring this to the attention of the compensation judge.

After the compensation judge denied the Employee’s claim for benefits, she appealed on the basis that the “the services of the court-appointed interpreter were inadequate, insufficient, and resulted in incorrectly interpreted material testimony.” She claimed that the interpreter had discouraged her from asking for clarification, and that the misunderstanding of her testimony led to her claims being affected in a material way.

The Employee failed to raise any concern at the hearing. The Court has previously held that an issue not raised in the hearing cannot later be raised upon appeal.Troester v. Drapery Servs. Of Austin. 49 W.C.D. 74, 78 (W.C.C.A. 1993). However, the Court also noted that it was important for testimony to be correctly interpreted. The Court noted by review of the record that Employee was able to describe and demonstrate the gestures and positions involved in her work for the judge. Further, the Court found that the compensation judge’s opinion appeared to be based upon the finding of the medical examinations and other medical evidence, not on the mechanism of the injury. Finally, the Court found that the record and substantial evidence supported that the Employee had sustained merely a temporary injury that had resolved. As such, it affirmed the compensation judge’s denial of benefits.

Summary by: Megan M. Oliver

Cornelius v. Woods Landscaping, WC17-6109 (W.C.C.A. March 28, 2018)

The Employee was injured while working as a landscaper.  He underwent surgical repair of his knee on December 22, 2015 and received 15 weeks of temporary total disability (TTD).  He was subsequently released to work without restrictions starting February 11, 2016 and was incarcerated for about one month ending April 10, 2016.  The Employer hired a replacement while the Employee was incarcerated, and the Employee’s job ended.  He received unemployment benefits from April until August 2016 when he began working at a new employer.  He subsequently left the second employer and found a new job a few months later.  He did not restrict his job search during these times due to any physical restrictions related to his knee.

The Claim Petition alleged intermittent TTD and temporary partial disability (TPD) benefits, which the compensation judge denied at hearing, noting that the Employee reached maximum medical improvement (MMI) on April 18, 2016, failed to prove the alleged wage loss in the periods of TPD was due to the left lower extremity injury, failed to conduct a diligent job search, and was not under work restrictions during the periods he was unemployed.

The Employee appealed, contending the compensation judge erred in not awarding TPD by not presuming a loss of earning capacity based on the actual earnings in post injury employments.  The Workers’ Compensation Court of Appeals affirmed the denial of TPD based on the fact that the Employee was not under any work restrictions and failed to prove the wage loss was causally related to the original injury as required by Minn. Stat. § 176.101, subd. 2(b).

He also appealed the denial of TTD benefits, but failed to address the first period of TTD and the date of MMI in his brief, thus waiving the issue on appeal under Minn. R. 9800.0900, subps. 1 and 2.  The denial of the second period of TTD was affirmed as the Employee was released to work without restrictions and failed to show that he performed a diligent job search

Summary by: Scott G. Ferriss

Manning v. Flynn Dalco Roofing, WC17-6102 (W.C.C.A. March 28, 2018)

The Employer and Insurer appealed the compensation judge’s finding that the Employee sustained aGillette injury to his cervical spine and award of benefits.  The Employer and Insurer objected to the doctor’s report obtained by the Employee as lacking foundation, in part due to the doctor not reviewing prior imaging, lack of explanation of his opinion regarding causation, and a lack of understanding of the Employee’s work activities.

The W.C.C.A affirmed the compensation judge, reaffirming that a compensation judge has discretion to assess the weight and sufficiency of medical expert opinions.  In this case, the Court found the opinion of the Employee’s doctor more persuasive than the report obtained by the Employer and Insurer.

Summary by: Scott G. Ferriss

Loos v. White Bear Lake Superstore, WC17-6108 (W.C.C.A. March 28, 2018)

The Employer and Insurer appealed the compensation judge’s determination that the Employee was unable to maintain suitable gainful employment.  The Employee, working in car sales, sustained two injuries to his ankle that required him to be placed into sedentary work.  The Employer offered him a position that complied with his restrictions but changed his compensation from commission based to an hourly wage that would be taken out of any commission earned.  The Employee asked the Department of labor and Industry staff about the job offer due to his concerns with the compensation change.  DOLI staff told him the job offer was not viable and the Employee’s QRC was told by DOLI that there was a question as to whether the job offer was “meaningful work.”  He refused the job offer.

The Employer and Insurer appealed, arguing that the job offer was gainful employment that the Employee could perform.  Because a R-2 Rehabilitation Plan was not filed, the standard for discontinuance of benefits is whether the employee refuses an offer of gainful employment that he would be able to do within his restrictions.  In this case, the WCCA affirmed the compensation judge’s finding that the job offer was not gainful employment as he was unable to engage in traditional sales activities necessary for selling cars.  The Court also noted that “meaningful” and “gainful” have been used in identical context in their previous opinions, and thus the wrong legal standard was not applied, as argued by the Employer and Insurer.

Summary by: Scott G. Ferriss

On March 25, 2018, the General Assembly of the State of Indiana enacted Senate Bill 290.  Effective July 1, 2018, this bill enacts the following Workers’ Compensation changes:

1.       Provides that the following must be tendered to an employee not later than fifteen (15) days after the date of the physician’s statement (ref. § 22-3-3-10.5):

A.      A proposed permanent partial impairment agreement

B.      The associated physician’s statement required

C.      The employee waiver of examination

D.      A hand/foot chart, if necessary

2.       A permanent partial impairment agreement signed by the employee, along with the supporting documentation, must be submitted to the Workers’ Compensation Board for approval not later than fifteen (15) days after the date of receipt from the employee (ref. § 22-3-3-10.5).

3.       Not later than thirty (30) days after the date the Workers’ Compensation Board approves the permanent partial impairment agreement, one of the following amounts must be paid (ref. § 22-3-3-10.5):

A.      The first weekly installment of a compensation for permanent partial impairment

B.      The lump sum, if the compensation is to be paid in a lump sum

4.       Voluntary Settlement Agreements.  Provides that payment of compensation under a settlement agreement must be made not later than thirty (30) days after the date the Workers’ Compensation Board approves the agreement (ref. § 22-3-2-15).

5.       Notice; Workers’ Compensation Coverage.  Requires an employer that has mobile or remote employees to convey information about Workers’ Compensation coverage to the employer’s employees in an electronic format or in the same manner as the employer conveys other employment related information (ref. § 22-3-2-22).

6.       Payments; Total Disability; Waiting Period.  Allows the electronic filing of a temporary total or partial disability compensation agreement with the Board (ref. § 22-3-3-7).

7.       Payments; Second Injuries.  Provides that permanently, totally disabled worker must reapply to the second injury fund for wage replacement benefit every three (3) years instead of every 150 weeks (ref. § 22-3-3-13)

8.       Payments; Time of Payment.  Provides that an award of compensation ordered by a single hearing member of the Workers’ Compensation Board must be paid not later than thirty (30) days after the date of the award, or as the award provides, if the award is not appealed to the full Board (ref. § 22-3-3-24).

9.       Report of Injuries and Deaths.  Requires the reporting of workplace injuries needing medical attention beyond first aid instead of injuries causing an absence from work for more than one day.  Provides that reporting requirements for workplace injuries are intended to be consistent with the recording requirements set out in the United States Occupational Safety and Health Administration’s regulations (ref. § 22-3-4-13).

10.   Workers’ Occupational Disease Compensation; Reports of Disablements.  Requires the reporting of workplace injuries needing medical attention beyond first aid instead of injuries causing an absence from work for more than one day.  Provides that reporting requirements for workplace injuries are intended to be consistent with the recording requirements set out in the United States Occupational Safety and Health Administration’s regulations (ref. § 22-3-7-37).

EFFECTIVE DATE

July 1, 2018

Legislative Update by Attorney Kathryn Johnson

When an employee has been injured and is entitled to temporary or permanent workers’ compensation benefits, a calculation of the employee’s average weekly wage and rate is required. In order to calculate the rate of compensation, the “gross earnings” of the employee must be determined and then converted to a weekly benefit rate. Correctly calculating the weekly rate at the onset of a claim can save insurers time, money, and headaches later on down the road.

There are various methods to determine an employee’s gross weekly earnings, otherwise known as the “average weekly wage” or “AWW”. The method of determining AWW will depend upon how the employee is compensated. Generally speaking, the majority of employees will be compensated on an hourly basis. For employees who are paid on a daily or hourly basis, or by the output of the employee (i.e. truck drivers), the method of calculating the AWW is determined by Iowa Code section 85.36(6). For these employees, the basic procedure for correctly calculating the weekly rate is to start by looking at the employee’s earnings immediately prior to the injury date, and find the first 13 weeks of “representative” earnings. This process can be reduced to the following formula:

The total weekly earnings during 13 representative weeks prior to the work injury ÷ 13 = AWW

The average of those 13 representative weeks is then applied to the rate table put out by the Iowa Division of Workers’ Compensation. The rate tables are set up to take the AWW, and reveal the correct weekly rate based on whether the injured employee is married or single, and how many exemptions the employee is entitled to claim. Generally, the weekly rate of compensation is 80% of the employee’s average spendable earnings at the time of the injury.

While this process may seem fairly straight-forward, the miscalculation of the AWW can be the cause of significant rate disputes that may result in interest on underpayment of benefits, unnecessary litigation expenses, and penalty awards. To avoid getting trapped into unnecessary expenses associated with a miscalculation of rate, utilize the following tips and tricks.

TIPS 

• To correctly calculate the AWW you will need to know the following information about the injured employee:
  • Marital Status. An injured employee’s weekly rate will vary depending on whether the employee is married or single.
  • Number of Dependents. An injured employee is entitled to one exemption for themselves, one exemption for their spouse, and one exemption for each of their dependents. Generally, a child can be claimed as an exemption for weekly rate purposes if the employee could claim the child as an exemption on their tax return.
  • Length of time between pay periods.
    • Weekly pay period – gross weekly earnings equal the weekly gross amount.
    • Biweekly pay period – gross weekly earnings equal the biweekly gross amount divided by 2.
    • Semimonthly pay period – gross weekly earnings equal the semimonthly gross amount multiplied by 24 and divided by 52.
    • Monthly pay period – gross weekly earnings equal the monthly gross amount multiplied by 12 and divided by 52.
    • Yearly pay period (salaried employees) – gross weekly earnings equal the yearly gross amount divided by 52.
  • Method of Compensation. From the onset you will need to establish the amount and frequency of compensation (hourly rate, salary or other method of payment), as well as increases in compensation. 
  • In some cases, the classification of the employee. The classification of the employee may be necessary when calculating the rate of certain types of employees such as volunteer fire fighters, emergency medical providers and reserve peace officers. Special rate rules also apply to elected or appointed officials, proprietors, limited liability company members, partners, officers of a corporation, apprentices, trainees, and employees whose earnings have not been fixed or cannot be ascertained. 
• Representative Weeks. When calculating the AWW, do not use the week of injury, but instead start with the week immediately preceding. The primary objective when calculating an AWW is to reflect earnings that fairly represent the employee’s customary earnings loss due to injury. Frequently, an employee’s wages will vary from week to week.
• Types of Compensation Included in the Weekly Rate Calculation. Certain types of payments to the employee must be included in the employee’s gross earnings.
  • Regular Bonuses. Bonuses received on a regular basis are to be included in the employee’s gross earnings. For example, bonuses that are received by an employee on an annual basis or are a fixed amount per year, will likely be classified as a regular bonus, and should be included.
  • Shift Differential. Shift differential refers to extra pay received by employees for working a less-than desirable shift (i.e., late nights, weekends). Shift differentials are to be included in the employee’s gross earnings. Therefore, if an employee is compensated at different rates depending on the shift, the earnings will be determined at the shift differential rates.
• Types of Compensation Not Included in the Weekly Rate Calculation. Certain types of payments to the employee are not used in calculating the weekly rate.
  • Overtime pay. Overtime pay is not included in figuring the gross earnings of an employee. This means that the amount paid in excess of the rate the employee receives for straight time is not included. For example, the rate of an employee who is paid $10 per hour and works a 50 hour work week (with 10 of those hours being overtime at time and one-half) will be $500.
  • Irregular Bonuses. A bonus may be irregular if it is conditioned upon the happening of a certain event, varies in amount, or is not fixed in terms of entitlement or amount. Irregular bonuses are not included in the employee’s gross earnings. This determination is fact-based and will require additional investigation.
  • Other types of pay which are excluded include: fringe benefits, retroactive pay, reimbursement of expenses, expense allowances, and an employer’s contribution for welfare benefits.
• Non-Representative Weeks. When determining an AWW, count back until you have 13representative weeks of earnings. It is not uncommon for a non-salaried employee to find that there are weeks within the 13 consecutive weeks prior to the injury that contain absences due to illness, vacation or other causes.
  
  If the employee is gone for reasons personal to the employee (such as vacation, holiday, or sick leave) during part of the 13 calendar weeks preceding the injury, than the gross earnings are determined as the amount that the employee would have earned had the employee worked when work was available. For instance, if an employee customarily works 40 hours per week, but in one week has 32 hours worked and 8 hours of vacation time, the earnings are based on the 40 hour work week had work been available for the employee during that time. This week would not be thrown out, but rather included within the 13 week average.
  
  It is important to remember that it is the earnings that must be customary, not the weeks. If the week in question does not reflect customary wages earned by the employee, the week is thrown out and replaced with the next preceding fairly representative week. Always bear in mind that the determination of whether a week is included to arrive at rate is whether the weeks considered “fairly reflect the employee’s customary earnings.”
  
  
• Other Types of Employees. If the employee worked full-time at the time of the injury, earning the same amount each pay period, the method of computation depends on the length of time between pay periods. (See above.) Certain types of employees are subject to other rules of rate calculation.
  • Part-time Employees. If the employee either earns no wages, or less than the usual weekly earnings of a regular full-time adult laborer in the employee’s line of work, the earnings are determined by the total of ALL earnings of ALL employment the employee has engaged in during the 12 months preceding the injury divided by 50. (Generally an employee who works less than 30 hours per week is considered part-time.)
  • Employees who do not have 13 Weeks of Representative Earnings. In some instances an employee will be injured before he or she has accrued 13 weeks of wages prior to the injury. In addition to a careful analysis of causation, you must look to the earnings of “similarly situated employees” for the 13 weeks preceding the injury to determine the AWW.
    • To do so, request wage records of employees in the injured employee’s same position, averaging the hours worked by the similarly situated employees at the injured employee’s straight time rate.
    • If the earnings of other employees cannot be determined, the employee’s weekly earnings shall be the average computed for the number of weeks the employee has been in the employ of the employer.
• Convert the AWW to a Weekly Benefit Rate. Once you determine the employee’s gross weekly earnings, round to the nearest dollar, and apply the AWW to the rate table put out by the Iowa Division of Workers’ Compensation[1]. 

TRICKS 

• If the employee is paid on an hourly basis (regardless of interval at which payments are made; weekly, biweekly, monthly or semimonthly) you will need to know the hours worked each week, both regular and overtime, rate(s) of pay, whether regular bonuses were paid, and whether the employee had time off for vacation, sick, holiday, or other personal leave during any week. You may need to speak with the employer’s payroll department and the employee’s immediate supervisor to better understand the employee’s work and compensation.
• For hourly employees, since a 13 week average is needed, the pay periods need to be broken down weekly to help you decide which weeks are representative. Those which do not fairly reflect the employee's customary earnings need to be excluded.
• Be sure the employer provides information regarding any pay increases and their effective dates. The employee’s personnel file is a good place to start to ascertain this information, but you may need to request actual time cards as well.
• Marital status and entitlement to exemptions are determined at the time of the injury, not when the claim is presented. Therefore, if an injured employee is single on the date of injury and subsequently gets married or has a child, they are still considered single with one exemption for rate purposes. If you take an injured employee’s statement, be sure to ascertain this information.
• The test for dependent status is whether or not the dependent could be properly included on the employee’s tax return. To help determine the employee’s dependents, request a copy of the employee’s tax return for the year in which the employee was injured. However, keep in mind that the employee’s tax return, while good evidence of dependent status, is not necessarily determinative of the issue.
• Remember that, although, AWW seems like a moving target, "§85.36 is to be applied flexibly, rather than mechanically or technically, with the ultimate objective being to fairly reflect the employee's earning loss."Daniels v. T&L Cleaning Services, File 1283486 (2003).
• The Iowa Division of Workers’ Compensation puts out tables on their website which can be used to determine compensation rate, however the easiest thing to do is to determine AWW and then usePeddicord Wharton’s free rate calculator which calculates the rate for you!

These tips and tricks are by no means an exhaustive list of everything there is to know about calculating weekly benefit rates in Iowa. However, they serve to provide the basic framework for rate calculation so that you can avoid getting trapped into unnecessary expenses associated with improper rate calculation. If you require assistance in calculating an injured employee’s AWW and rate, feel free to contact one of our firm’s attorneys and we will be happy to help you. 

[1] Peddicord Wharton provides a free calculator to help quickly convert AWW to rate. Rate calculators can be found here .

In Silverti v. Ohio Valley Nursing Home, Inc. (No. 17-0746 April 11, 2018), the West Virginia Supreme Court ruled that a workers' compensation claimant who is ordered to attend a medical examination shall be reimbursed his or her reasonable travel expenses incurred in connection with attending the ordered medical examination. These travel expenses include, at a minimum, reasonable expenses for meals, lodging, and mileage. The case involved the denial of the cost of one meal incurred by the claimant who traveled 100 miles from his home for an IME scheduled on behalf of the employer. The claimant spent 6 hours for traveling to, attending and returning from the IME, during which time he ate one meal. He sought reimbursement for the meal expense he incurred while attending the medical examination. The employer argued the claim administrator did not have to reimburse the claimant for reasonable costs of meals because his travel did not require overnight lodging. The employer's argument relied on workers' compensation regulation W. Va. C.S.R. §85-1-15.1 which used as a guide a regulation for state employee travel limiting the meal reimbursement. The Court determined the state employee travel regulations requiring an overnight stay before reimbursing meal expenses conflict with the statutory requirement in the workers' compensation statute governing medical examinations (W.Va. Code §23-4-8), and may not contravene the statute.  

The Court addressed in a footnote the employer's assertion allowing such reimbursement would lead to meal expense requests for a medical examination even if in a claimant's neighborhood.  The Court explained “[t]his case should not be read to require a party who orders a medical examination of a workers’ compensation claimant to reimburse the claimant for ‘travel expenses’ when the claimant did not travel outside the area in which he or she resides to attend the medical examination.” Silverti, n. 15. The Court further states that the “Insurance Commissioner can curtail a claimant’s reasonable (i.e., reimbursable) travel expenses by requiring claims administrators to comply with W.Va. Code St. R. §85-1-15.6 [2009], which provides: ‘The responsible party shall arrange for examination as near as practicable to the claimant’s residence.”Id.

The primary directive from the case is a claim administrator must reimburse for reasonable travel expenses including meals when the claimant travels outside the area in which he or she resides to attend a medical examination or IME. Justice Walker dissented and reserved the right to file a dissenting opinion, so she may provide more insight on reasonable travel expenses.  

Article by Dill Battle

If you have questions or need more information, please call or e-mail Dill Battle at 304.340.3823 orhdbattle@spilmanlaw.com

H. Dill Battle III, Esq.

Spilman Thomas & Battle, PLLC
300 Kanawha Boulevard, East
Charleston, WV 25301
304.340.3823 - office
304.340.3801 - fax
hdbattle@spilmanlaw.com