The 85^th Texas Legislature is in full-swing. Through 53 filed bills, the legislators have shown significant interest in tweaking the workers’ compensation system. The following is a summary of the most-relevant provisions.

Attempting to Bring Bad Faith Claims Back to Texas Comp.  In Tex. Mutual Ins. Co. v. Ruttiger, the Texas Supreme Court held that claims for unfair settlement practices (bad faith claims) against workers’ comp carriers under Tex. Ins. Code §541.060 are precluded by the dispute resolution procedures and administrative remedies provided by the Workers’ Compensation Act.  HB 499 would amend Tex. Ins. Code §541.060 to expressly grant workers’ comp insureds and beneficiaries a bad faith claim. –Dan Price, SLS, LLP.
 
No More Payment of Administrative Fine Prior to Judicial Review of TDI Violation? If DWC-TDI assesses an administrative fine for an administrative violation against a system participant, Tex. Lab. Code §415.035 requires the penalized party to pay the administrative fine (by escrow or bond) as a prerequisite to filing a petition for judicial review to challenge the finding of a violation. Failure to first pay the fine currently results in waiver of the penalized party’s legal rights to contest the violation. HB 1456 would eliminate the requirement that the fine be paid prior to challenging the alleged violation on judicial review. –Dan Price, SLS, LLP.
 
All Texas Contractors and Sub-Contractors May Be Required to Provide Workers’ Comp. Tex. Lab. Code § 406.096 currently applies to governmental entities and requires that contractors and sub-contractors who perform work for the entity provide workers’ comp coverage to their respective employees.HB 1477 would amend Section 406.096 to require all contractors and sub-contractors to carry workers’ comp insurance for their employees irrespective of whether the work is provided for a governmental entity.  –Dan Price, SLS, LLP.
 
Proposed Annual Cost of Living Increases to Texas Death Benefits. HB 2054 would amend Tex. Lab. Code §408.181 (relating to Death Benefits) to provide annual adjustments to death benefits to account for inflation as calculated based on the consumer price index published by the U.S. Department of Labor and the cost of living adjustments used by the Social Security Administration. –Dan Price, SLS, LLP.
 
Perpetual Death Benefits to Texas Spouses Who Remarry? Yes, According to this Bill.  Section 183(b) of the Texas Labor Code provides death benefits to an eligible spouse for life unless the spouse remarries. HB 2055 would amend this section to require payment of death benefits to the eligible spouse for life, “regardless of whether the spouse remarries.” –Dan Price, SLS, LLP.
 
Administrative Overreach? Bill Seeks to Provide Administrative Oversight to Texas Court’s Review of Division’s Decisions.In this separation of powers headscratcher, HB 2061 would expand the notice requirements contained in Section 410.253 of the Texas Labor Code to require service on the Division of petition for judicial review (the current version requires only notice that suit is filed) as well as any proposed agreed judgment. In addition, the statute would require disclosure to the Division of all terms of settlement and payment agreed to by the parties as part of the proposed agreed judgment. –Dan Price, SLS, LLP.
 
Texas Bill Requires Carriers to Pay for Injured Workers’ Causation Opinions.If the carrier disputes the extent of injury, HB 2226 would require the carrier to pay a treating doctor (or doctor on referral from the treating doctor) for the preparation or a causation report in support of the claimant’s position on extent of injury. Importantly, the bill allows the doctor to create and bill for such report even in the absence of a request to do so by the injured worker, his representative, or the insurance carrier. –Dan Price, SLS, LLP.
 
A Call for Less Experienced System Participants in Texas: Lowering the Bar for Ombudsmen.The current statutory requirements to serve as an ombudsman in the Office of Injured Employee Counsel include at least one year of experience in workers’ comp.See Tex. Lab. Code § 404.152(b)(4). HB 2060 would eliminate this requirement, meaning a person may become an ombudsman and, with no experience, assist an injured worker through the complexities of the Workers’ Comp Act.  –Dan Price, SLS, LLP.
 
Compound Drugs Excluded from Texas’ Closed Formulary. HB 2830 would allow the Commissioner to exclude by rule from the closed formulary compounded pharmaceutical medications. –Dan Price, SLS, LLP.
 
All Work-Hardening/Conditioning Subject to Preauthorization in Texas, Unless Changed by Rule.Work-hardening and work-conditioning currently requires preauthorization only if the facility providing the work-hardening/conditioning is not a credentialed facility.See Tex. Lab. Code §413.014(2). HB 2058 would require preauthorization for all work-hardening/conditioning irrespective of whether the facility is credentialed or not. There is a catch, however. The bill would authorize the Commissioner to exempt by rule credentialed facilities from the preauthorization requirement. – Dan Price, SLS, LLP.

The general rule in the Texas system is that if a hearing officer determines a Claimant is not at MMI as of a specific date, then the Claimant cannot, as a matter of law, later be placed at MMI on or prior to that date.See Decision Nos. 131674, 140982, and 131655. However, in Decision No. 162510, filed on February 10, 2017, the Appeals Panel held that such certification must still be timely disputed invalid for purposes of determining whether the certification became final.

In this decision, the Appeals Panel acknowledged that in a prior, final decision and order dated January 16, 2016, a hearing officer had determined that Claimant did not reach MMI on November 18, 2015. Claimant was subsequently sent to a designated doctor who certified on April 1, 2016, that Claimant reached MMI on May 22, 2015 – a dateprior to the date the hearing officer determined Claimant had not reached MMI. The April 1, 2016 certification was the first certification of MMI after the prior first certification was overturned by the DWC.

Claimant failed to timely dispute within 90 days the April 1, 2016 certification, which was now, the first valid certification of MMI.The Appeals Panel rejected Claimant’s argument that the April 1, 2016 could not be adopted as a matter of law.

“The fact that the certified date of MMI of May 22, 2015, is prior to the previous decision holding the claimant had not reached MMI as of November 18, 2015, has no bearing upon whether or not the certification became final.”

The parties must always dispute the first certification of MMI/IR if the certification is, as a matter of law, not adoptable. –Dan Price, SLS, LLP.

The Third Court of Appeals in Austin recently upheld the criminal conviction of Howard Douglas, formerly a licensed medical doctor in Texas. Douglas owned and operated North Texas Medical Evaluators (NTME), which served as a scheduling company for designated doctors. The conviction was based on Texas Mutual’s complaint alleging Douglas and NTME referred claimants for FCEs when the claimants were not referred by the designated doctors themselves, and then billed the maximum amount of units (16) possible for an FCE under the workers’ comp fee guidelines when, in fact, the billable FCE time was limited to 30-40 minutes (2-3 units). The Third Court of Appeals affirmed the conviction and Douglas’ sentence to five years in prison.Douglas v. State, Case No. 03-14-00605-CR, in the Third Court of Appeals of Texas, Austin (Apr. 14, 2017). –Dan Price, SLS, LLP.

We are sad to report that the Hon. David Mattax, Commissioner of Insurance, State of Texas, passed away on April 13, 2017, following an extended illness. Commissioner Mattax was 60.  Gov. Greg Abbott released the following statement in tribute to the Commissioner:

“Today Cecilia and I mourn the loss of a friend, colleague, and distinguished public servant. Commissioner David Mattax truly dedicated his life and career to the State of Texas. A brilliant lawyer whose loyalty to Texas never wavered, David was a doting son and brother who took great pride in mentoring young lawyers who would become the leaders of tomorrow.

David’s brilliance, wit, and wisdom will be dearly missed by all who knew him. Cecilia and I extend our deepest sympathies and prayers to the Mattax family.”

SLS likewise extends its condolences to Commissioner Mattax’s family, friends, and colleagues.

By: Bruce Hamilton

On April 6, 2017, the North Carolina Workers’ Compensation Opioid Task Force held its first organizational meeting to study and recommend solutions for the problems arising from the intersection of the opioid epidemic and related issues in Worker’s Compensation claims. The Task Force has not yet issued a report or timeline for when a report is expected.

On April 24, 2017, Gov. Cooper appointed Judge John Arrowood to the North Carolina Court of Appeals to fill the vacancy created by the resignation of Judge Douglas McCullough. The appointment of Judge Arrowood took place following Gov. Cooper’s veto of a bill to reduce the size of the Court of Appeals from 15 judges to 12 judges. The legislation reduced the number of judges on the Court of Appeals by not replacing incumbent judges whose seats became vacant prior to the expiration of the judge’s term due to death, resignation, retirement, impeachment, or removal.

Gov. Cooper nominated Deputy Commissioner Philip Baddour to a six-year term as the next Commissioner of the North Carolina Industrial Commission.  Commissioner Bernadine Ballance’s term ended on April 30, 2017. The Baddour nomination is subject to confirmation by the North Carolina General Assembly and, as of April 26, 2017, the General Assembly had not yet approved Deputy Commissioner Baddour’s appointment.

The North Carolina Workers’ Compensation Educational Conference is scheduled for Wednesday, October 4 through Friday, October 6, 2017. The Industrial Commission announced a Twitter account that will provide updates on breaking news and important announcements from the Commission. Twitter @IC_NC_GOV.

By: Rebecca Thornton

Last winter we examined the Court of Appeals decision in Wilkes v. City of Greenville and its seemingly a radical extension of the Parsons presumption to injuries not initially accepted as part of the claim.  The decision Wilkes was appealed to the North Carolina Supreme Court and is set for oral argument in mid-February 2017.  However, the show must go on, and, in its recent holding in Patillo, the Court of Appeals once again examines the Parsons presumption and its application in North Carolina workers’ compensation cases, as well as the reasonableness of a job search.

Patillo suffered a low back injury on February 16, 2011 while working as a press operator for Defendant-Employer.  He was evaluated at the on-site medical clinic and was restricted to “off-standard” work, which meant that he could not perform all his job functions without assistance.  Patillo remained on off-standard work until April 4, 2011.  The following day he returned to on-standard work.  Then, on May 13, 2011, Patillo was restricted to two weeks of sit-down work only, which was not available, so he went out of work on May 13, 2011.

Patillo later filed a Form 33 Request for Hearing.  No Form 60, 61, or 63 was ever filed. The parties later entered a consent order that Patillo suffered “some level of contusion to the lower back as a result of [the] accident.”  Following a hearing, the Deputy Commissioner issued an Opinion and Award finding the low back injury compensable. The decision also awarded temporary total disability benefits between March 6, 2012 and the time of the hearing, but denied Patillo’s request for prior temporary total disability benefits between May 13, 2011 and March 6, 2012.

Defendants appealed to the Full Commission.  It concluded that that the parties’ consent order created a rebuttable presumption that Patillo’s current low back condition was related to his compensable accident and that Defendants failed to rebut the presumption. Even without the presumption, the Commission concluded that Patillo had proven that his at-work injury caused ongoing non-mechanical back pain and awarded him ongoing medical treatment.  The Commission also concluded that Patillo failed to prove that he was disabled after March 6, 2012 because he had not shown that he made a reasonable effort to return to work or that a job search would have been futile.  Both parties appealed to the Court of Appeals.

The Court affirmed the Commission’s application of the Parsons presumption and conclusion that Defendants had not rebutted the presumption that Patillo’s medical treatment was related to the at-work injury.  The Court cited the Parsons and Perez cases, noting that a presumption of compensability for medical treatment applies to future symptoms allegedly related to the original injury, not just for the original injury itself.  The Court rejected Defendants’ argument that no presumption applied because they had only admitted the compensability of a low back contusion.  The Court further concluded that Defendants had not rebutted the presumption of compensability because they were unable to show, through the medical testimony, that Plaintiff’s current low back pain was separate and distinct from his original work injury.

The decision again highlights the burden shift in accepted claims where Defendants must rebut the presumption that an injured worker’s medical treatment is related to the compensable injury.  Unlike Wilkes, this decision does not radically extend the application of the Parsons presumption to injuries that are not “the very injury” accepted as part of the claim.  Instead, it highlights the importance of investigating new injuries or conditions soon after they are discovered to determine whether evidence exists to rebut the presumption, and also to establish that there is evidence that new injuries and conditions are “separate and distinct” from the original accepted injury.

The Court also examined the issue of futility and reasonableness of the job search performed by Patillo.  It reversed the Commission’s decision and stated that the determination that Patillo had not conducted a reasonable job search was not supported by competent evidence.  The Court acknowledged that there is no set rule for determining the reasonableness of a job search and stated that, although the determination of reasonable is discretionary, the Commission must make findings of fact to support its determination of reasonableness.  Therefore, the case was remanded to the Commission for further findings.

The holding in Patillo does not constitute as drastic a shift from the application of the Parsonspresumption as the Court’s holding in Wilkes.  However, both cases are an important reminder to be prepared to produce evidence that additional claimed injuries are not causally related to accepted conditions. Also, stay tuned for further developments in the application and interpretation of the Parsons presumption by North Carolina courts.

April 2017

Tennessee Supreme Court Rules Death by Overdose Not Work Related

InKilburn v. Granite State Insurance Company, the injured worker sustained several different injuries in a motor vehicle accident. These injuries were accepted as compensable and the injured worker received authorized medical treatment. His medical treatment included spine surgery and the prescription of pain medications, including oxycodone. Six months following surgery, the injured worker died due to an overdose of oxycodone combined with alcohol.

The injured worker’s widow argued that the death was caused by the work injury and therefore should result in the payment of death benefits. Even though the proof at trial established that the injured worker violated doctor’s orders by taking more opioid medication than he was prescribed and by consuming alcohol while taking this medication, the widow asserted that this was due to the severe pain and anxiety from his injury.

The trial court agreed with the widow’s position, ruling that the death was a direct and natural consequence of his work injury and awarded death benefits to the widow. The Tennessee Supreme Court disagreed, finding that the injured worker’s violation of doctor’s orders constituted an independent intervening event which broke the chain of causation between the work injury and the death by overdose. Thus, the judgment of the trial court was reversed and death benefits were denied.

While this was an important victory for the employer inKilburn, Tennessee employers should take note that the Court declined to create an across-the-board rule that an overdose will always constitute an independent intervening event. To the contrary, theKilburn court stated in a footnote that it was not concluding that an individual can never prove that an overdose is the direct and natural result of the original compensable injury when a dependency or addiction to narcotics develops. The Court merely concluded that the specific facts and testimony presented in the Kilburn case failed to establish that link. So, theKilburn decision does leave that door open in future cases, e.g. where an employee overdoses but there is no showing that doctor’s orders were violated.

It is also important for Tennessee employers to remember that theKilburn case was decided under pre-July 1, 2014 law. To the extent that the pre-July 1, 2014 law may be contrary to the Tennessee workers’ compensation reform law enacted for injuries on or after July 1, 2014, theKilburn case would have limited precedential value. However, it could still be used as persuasive authority for a court deciding a similar case for an injury on or after July 1, 2014. Since the “new” law actually has a stricter causation standard than the “old” law that Kilburn was using, it might actually be harder now for an injured worker to prevail on this issue.

Fredrick R. Baker, Member
Wimberly Lawson Wright Daves & Jones, PLLC
1420 Neal Street, Suite 201
P.O. Box 655
Cookeville, TN 38503-0655
Phone: 931-372-9123
Fax:  931-372-9181
fbaker@wimberlylawson.com
www.wimberlylawson.com

We are pleased to announce that Michael Gilligan has joined the firm as an Associate Attorney. Michael is a 2011 graduate of Kenyon College where he played varsity golf and lacrosse. In 2015 he graduatedCum Laude from William Mitchell College of Law. Michael was an Assistant Editor of the William Mitchell Law Review and was a finalist in the Rosalie E. Wahl Moot Court Competition. He also was on the Dean’s List.

Prior to joining the firm Michael was a law  clerk for the Honorable Diane M. Hanson, Judge of District Court, First Judicial District, Minnesota. While in law school, Michael clerked at an insurance defense firm in Minneapolis. He has experience in civil matters, including subrogation and general liability.

Michael’s practice will focus primarily on workers’ compensation  litigation, including hearings, settlements, depositions, conferences and motions.

Written by: Lindsay A. Underwood

On May 12, 2007, Plaintiff was working as a tire builder for Defendant-Employer, and sustained injury to her right shoulder. Defendants accepted the right shoulder as compensable. Plaintiff underwent surgery and returned to work. Plaintiff sustained a number of exacerbations to the right shoulder over the course of her claim. Following one incident in 2010, Plaintiff began treating with Dr. Robert Carroll. Dr. Carroll assessed Plaintiff at MMI on March 14, 2012.

On September 6, 2013, Plaintiff was lifting at work when she again injured her right shoulder. She returned to work briefly from October 3, 2013 to October 23, 2013, but again reported pain. Plaintiff was written out of work and was diagnosed with proximal biceps tendinitis. Defendants argued this new diagnosis of biceps tendinitis was not causally related to the May 12, 2007 injury. Although Plaintiff was written out of work, Defendants did not initiate TTD benefits, contending the biceps injury was a new injury unrelated to the 2007 accident. Plaintiff’s three physicians, Dr. Kevin Speer, Dr. Christopher Barnes, and Dr. Carroll, testified that it was unclear whether the September 6, 2013 injury to the biceps tendon was related to the original injury.

The Deputy Commissioner issued an Opinion and Award finding that the medical opinion testimony was insufficient to establish that the biceps tendon was causally related to the original injury and denying Plaintiff’s claim for TTD benefits. Plaintiff appealed to the Full Commission. The Full Commission reversed the Deputy Commissioners’ Opinion and Award. Citing theParsons presumption, the Full Commission concluded that Defendants had the burden to prove the September 2013 injury was not directly related to the 2007 injury. It also determined that Defendants had failed to meet their burden and ordered Defendants to pay Plaintiff TTD benefits.

Defendants appealed to the Court of Appeals, which agreed with the Full Commission. Defendants’ argued that because the biceps tendon is a complete and separate body part than the rotator cuff, theParsons presumption should not apply. The Court of Appeals rejected Defendants’ argument, noting Defendants accepted the compensability of the right shoulder, and could not say the right bicep tendon, part of the right shoulder complex, is not connected to the right shoulder. In addition, two of Plaintiff’s physicians, Dr. Barnes and Dr. Carroll, testified that the surgical repair Plaintiff underwent in 2007 weakened the complex where her bicep attached to the shoulder socket, placing her at a higher risk for injury to the bicep. Thus, the Court determined that Defendants had failed to rebut the presumption that the biceps injury was related to the original 2007 accident.

The Court further determined that Defendants should have immediately reinstated Plaintiff’s disability compensation following her unsuccessful trial return to work. As Defendants did not immediately reinstate benefits, the Court held Defendants were subject to a ten percent (10%) penalty on TTD benefits not paid to Plaintiff following the end of her trial return to work. 

RISK HANDLING HINT: Bell provides further clarification as to how the Parsons presumption impacts defendants who have admitted the compensability a prior accident.  If the injured worker suffers a new injury affecting a previously accepted body part, even it if is arguably an injury to a different part of the accepted body part, whereBell applies, the burden of proof will shift to defendants to show the new injury is unrelated to the original claim.