State News

This month US Labor Secretary Thomas Perez released the highly anticipated report on workers’ compensation entitledDoes The Workers’ Compensation System Fulfill Its Obligations to Injured Workers?The report’s answer to that question is “no,” and it cites deficiencies  in the workers’ compensation system and ominously recommends that legislators consider “whether to increase the federal role in oversight of workers’ compensation programs.” 

We note with interest that the report commented on the recent Workers’ Compensation Summit, stating that “a gathering of diverse workers’ compensation experts in a self-styled summit concluded that benefit adequacy, system failures, and delays in medical treatment were the three foremost issues requiring action.” Our own Jane Stone was one of those “diverse workers compensation experts” that participated in the Summit. 

More information regarding the Summit is available at
Workerscompensationcentral.com. 

The owner of a health clinic has pleaded guilty to insurance fraud after billing comp carriers for medical services even though the clinic had no licensed doctor on its staff. Rosemary Phelan, owner of Houston Healthcare Clinic, was sentenced to seven years deferred adjudication and ordered to pay $88,000 in restitution. 

A joint investigation by the TDI-DWC and Texas Mutual Insurance Company led to the guilty plea. According to DWC, the clinic had a licensed doctor on staff at one time, but when that doctor left in 2012 the clinic began hiring unlicensed, foreign medical students to act as doctors and treat patients. Phelan reportedly submitted $166,843 in fraudulent workers’ compensation claims, involving more than 50 workers, claiming they had been treated by the clinic’s previous doctor.  

This month the TDI published its 2016 Workers’ Compensation Network Report Card. The report card assesses health care costs and utilization, employee access and satisfaction of care, and return-to-work outcomes. According to TDI, the report card results show that “networks continue to experience improvements in average claim costs and outcomes when compared to non-network claims and to previous years.”

Compound cream fraud isn’t just a comp problem. It’s everywhere. The U.S. Attorney’s office for the Northern District of Texas announced this month the arrest of nine defendants in connection with their roles in a $100 million health care fraud conspiracy perpetrated against TRICARE, the health insurance program for members of the military and their families. The defendants allegedly defrauded TRICARE in connection with the prescription of compounded pain and scar creams by, among other things, paying kickbacks to prescribing physicians. 

One doctor in El Paso allegedly wrote thousands of prescriptions for compounded drugs to TRICARE beneficiaries whom he had never met in person and for whom he conducted only a cursory consultation via telephone. In the nine-month period from October 2014 to June 2015 TRICARE reportedly paid more than $102 million for compounded drug prescriptions generated by some of the defendants.

Did you catch that? $102million in a nine month period. These are taxpayer dollars we’re talking about. Think about that the next time you look at the "Federal Withholding" deduction on your paycheck stub. 

This month the Occupational Safety and Health Administration issued a memorandum which seeks to clarify the extent to which OSHA will consider post-accident drug and alcohol testing to be a violation of federal regulations.  

The memorandum addresses questions that have arisen about a rule that OSHA published in May. That rule, theElectronic Recordkeeping Rule, prohibits retaliation against employees who report workplace injuries and illnesses. In comments to that rule OSHA previously stated that the rule “does prohibit employers from using drug testing (or the threat of drug testing) as a form of adverse action against employees who report injuries or illnesses.” Those comments ignited a firestorm, and since then there has been debate as to whether all post-accident drug or alcohol testing is now prohibited.

In the new memorandum, dated October 19, 2016, OSHA’s answer to that question is “no.” It explains that the rule does not prohibit  employers from drug testing employees who report work-related injuries “so long as they have an objectively reasonable basis for testing.” According to OSHA, when assessing whether the basis for testing is objectively reasonable, “the central inquiry will be whether the employer had a reasonable basis for believing that drug use by the reporting employee could have contributed to the injury.” If so, says OSHA, it would be objectively reasonable to subject the employee to a drug test. Conversely, says OSHA, “drug testing an employee whose injury could not possibly have been caused by drug use would likely violate” the rule. 

Enforcement of the rule originally was scheduled to begin in August 2016 but OSHA has delayed it to December 1, 2016. 

The Division of Workers' Compensation has expanded to all 20 of its field offices the availability of a two-step dispute resolution process for certain types of disputes. The process started as a pilot program available only in Weslaco and Dallas and it has proven successful. 

The two-step process is voluntary and is available when a  dispute includes the trifecta issues of extent of the injury, the date of Maximum Medical Improvement, and the correct impairment rating. Under the bifurcated process, the parties can elect to have the hearing officer resolve the extent of injury issues first and then they can assess whether another hearing is needed to resolve the issues of MMI and IR. 

TERMINATING COMPENSATION BENEFITS IN PENNSYLVANIA

By Kevin L. Connors, Esquire

“I’m never going to be disabled.  I’m sick of being so healthy.”

Thank you, Homer Simpson.

“All my life I’ve had one dream, to achieve my many goals.”

Thank you again, Homer!

With those self-evident truths behind us, we can now focus on the recent Decision of the Commonwealth Court inBaumann v. WCAB, decided on September 23, 2016.

This Decision is relevant why?

Because, the Commonwealth Court addressed the burden of proof that an Employer carries when seeking to terminate workers’ compensation benefits requiring proof that there has been a change in the Claimant’s physical condition from a prior Independent Medical Examination under Lewis v. WCAB, 919 A.2d 922 (Pa. 2007).

All of us will recall the Pennsylvania Supreme Court’s Decision in Lewis, in which the Court had held:

In order to terminate benefits on the theory that the Claimant’s disability has reduced or ceased due to improvement of physical ability, it is first necessary that the Employer’s Petition be based upon medical proof of a change in the Claimant’s physical condition.  Only then can the WCJ determine whether the change in physical condition has effectuated a change in the Claimant’s disability, i.e., the loss of his earning power.  Further, by natural extension, it is necessary that, where there have been prior Petitions to… terminate benefits, the Employer must demonstrate a change in physical condition since the last disability determination.

In so holding, the Lewis Court had explained:

Absent this requirement “a disgruntled Employer… could repeatedly attack what he considers an erroneous Decision of a WCJ by filing Petitions based on the same evidence ad infinitum, in the hope that one referee would finally decide in his favor., citingDillon v. WCAB, 640 A.2d 386 (Pa. 1994).

In Baumann, the Claimant sustained a right shoulder and upper back injury as a result of a car accident in 2007.  The claim was accepted as compensable by the Employer, with workers’ compensation benefits being paid to the Claimant.

In 2008, under a WCJ Order, the Claimant’s injury description was amended by Stipulation to include right C-6 radiculopathy.

In 2009, the Employer sought to terminate the Claimant’s compensation benefits in reliance upon an Independent Medical Examination performed by Dr. Richard Bennett, a board-certified neurologist.

In opposition to the Employer’s Termination Petition, the Claimant testified that he was not fully recovered from the work injury, and he presented the deposition testimony of his orthopedic surgeon, Dr. Norman Stempler.

The Employer’s Termination Petition was then denied by the Honorable Bruce Doman in a Decision issued in 2009.

In 2010, the Claimant again underwent a second Independent Medical Examination performed by Dr. Bennett, with Dr. Bennett again finding that the Claimant was fully recovered from the work injury, resulting in the Employer filing a second Termination Petition, in reliance upon Dr. Bennett’s full recovery opinions.

The second Termination Petition was then litigated before the Honorable Tina Rago, with there also being an Employer Modification Petition, and a Claimant Penalty Petition. 

In support of the Termination Petition, Dr. Bennett’s testimony was again presented, with the Claimant testifying, both at deposition and live before the WCJ, that he was continuing to see Dr. Stempler, but that he was not actively treating for his work injury.  The Claimant also testified that he continued to have pain in his shoulder and neck, and that his activities of daily living were significantly limited.

In 2011, the WCJ found the Claimant’s testimony of ongoing shoulder pain was not credible, since the Claimant was not actively treating for it, and that the activities that the Claimant did testify to, including playing guitar and video games, as well as getting several tattoos on his arms, evidenced that the Claimant was fully recovered from the work injury, conclusions supported by the Independent Medical Examination opinions of Dr. Bennett.

Granting the Termination Petition, the WCJ also granted the Claimant’s Penalty Petition, finding that the Employer had violated the Act by failing to pay for the Claimant’s shoulder surgery, although a 0% penalty was assessed with the granting of the penalty.

No surprise that the Claimant then appealed with WCJ’s Decision at the Appeal Board, with the Board remanding the matter back to the WCJ, to determine whether the Employer had met his burden of proving that the Claimant’s medical condition had changed between the denial of the 2009 Termination Petition, and the granting of the 2010 Termination Petition. 

In a Decision then issued in 2014, the WCJ again granted the Employer’s Termination Petition, as well as granting the Penalty Petition, in the course of which the WCJ found that the failure to pay for the Claimant’s shoulder surgery was not sufficiently significant to warrant more than a 0% penalty.

The WCJ’s Decision was then appealed to the Appeal Board, which affirmed the WCJ’s Decision, resulting in the Claimant appealing the Decision to the Commonwealth Court.

Recognizing that the evidence necessary to prove a change from a prior adjudication “will be different in each case,” the Commonwealth Court held that the WCJ is empowered to accept the Employer’s medical evidence of full recovery as being credible, allowing the WCJ to make a finding that the Employer has met the standard set forth underLewis to prove a change in a Claimant’s condition, as a prerequisite to granting a Termination Petition.

Affirming the granting of the Termination Petition, the Commonwealth Court held that “it is not necessary for the Employer to demonstrate that the Claimant’s diagnoses have changed since the last proceeding, but only that his symptoms have improved to the point where he is capable of gainful employment.”  Simmons v. WCAB, 96 A.3d 1143 (Pa. Cmwlth. 2014).

The Baumann Court held that a change sufficient to satisfy the Lewis requirement exists if there is a lack of objective findings to substantiate a Claimant’s continuing complaints.

Analyzing the WCJ’s findings, the Baumann Court specifically noted that the WCJ had found the Claimant’s testimony, as to his activities in relation to his shoulder pain, to be “incredible”, and that the Claimant’s lack of any active medical treatment since 2009, supported the IME’s physician’s conclusion that the Claimant had fully recovered from the work injury.

Finding that there was substantial evidence to support the WCJ’s conclusion that the Employer had proved that there was a change in the Claimant’s physical condition between the 2009 Decision and Judge Rago’s 2010 Decision, the Commonwealth Court affirmed the granting of the Termination Petition.

As for the Penalty Petition, the Commonwealth Court also agreed with both the WCJ and the Appeal Board, finding that when a Claimant has satisfied their burden of proving a violation of the Act, the amount of penalties to be imposed for that violation are left within the sole discretion of the WCJ.  Indiana Floral Co. v. WCAB, 739 A.2d 984 (Pa. Cmwlth. 2002).

Noting that the WCJ had awarded a 0% penalty in reliance upon the Claimant’s own incredible testimony concerning his pain levels and activities, as well as his intercontinental travels and tattoos, the Commonwealth Court found no error in the WCJ’s Decision, or the Appeal Board’s conclusion to affirm the WCJ’s Decision to assess a 0% penalty against the Employer.

The Takeaway

First, yahoo!

Tough case with familiar faces.

Two different WCJ’s, two different results.

Two very well-used physicians, both marginalized by their respective orientations, albeit disabled or recovered.

So, what was the tie-breaker?

Like Homer Simpson says, “if something’s hard to do, then it’s not worth doing.”

As backwards as Homer’s logic sometimes seems, elusive truths survive every fall.

ConnorsO’Dell LLP

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

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

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

OSHA recently issued a proclamation against the blanket drug testing of all employees that report work accidents. While there is no specific law against it, OSHA has advised that it will consider such practice retaliatory in nature because it could discourage an employee from reporting a legitimate accident or injury.

In Alabama, the Workers’ Compensation Code provides the employer with an affirmative impairment defense to indemnity benefits under Section 25-5-51. A positive DOT compliant drug test results in an irrebuttable presumption of impairment.  Even with this presumption in place, the employer still has the burden of proving that impairment caused or contributed to the accident.  Per OSHA, employers are now called upon to determine whether there is any reasonable connection between drugs and/or alcohol and the accident/injury prior to administering the test.  If drug or alcohol impairment could have been a contributor to the accident, then requiring the test will not be considered discriminatory.  If there is no reasonable connection, then employers risk a retaliation claim by OSHA in federal court.

If an employer opts in to the Drug Free Workplace Program offered by the Alabama Department of Labor, then it will likely work as a defense to any claim of retaliation when all employees with reported claims are tested.

OSHA will begin its enforcement of this new policy on December 1, 2016. After that, employers who have not opted in to the Drug Free Workplace Program should plan on changing post-accident drug testing policies from “shall be tested” to “may be tested” and consider the relationship between any possible impairment and the accident/injury prior to testing.

About the Author

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

THE LONG AND SHORE OF IT

By Kevin L. Connors, Esquire

In Savoy v. WCAB, the Pennsylvania Commonwealth Court affirmed the underlying Decisions of the Appeal Board and the WCJ, with the Appeal Board affirming the WCJ’s Decision to deny the Claimant’s Claim Petition, finding that the Claimant’s claim fell within the exclusive jurisdiction of the Federal Longshore and Harbor Workers’ Compensation Act (Longshore Act), and could not, therefore, be adjudicated under the Pennsylvania Workers’ Compensation Act.

Working for Global Associates as an Electrician assigned to work on U.S. Navy vessels in the Philadelphia Navy Yard, the Claimant was injured in 2013, while walking along a passageway on a naval ship, when he tripped and twisted his right knee.

In 2014, the Claimant filed a Claim Petition, alleging that he had sustained a work-related torn right lateral meniscus.  Under his Claim Petition, the Claimant sought temporary total disability benefits, with Hearings then proceeding before the WCJ.

In the course of litigating the Claim Petition, it was stipulated that the Claimant was receiving benefits for his injury under the Longshore Act.  For that reason, the case was then bifurcated to address whether the Claimant was entitled to concurrent compensation under the Pennsylvania Workers’ Compensation Act, as opposed to benefits under the Longshore Act being exclusive.

In deciding the issue, the WCJ found the Claimant’s testimony to be credible to establish that the ship in which he was injured was on navigable waters of the United States at the time of his work injury, and that, therefore, the Claimant’s claim fell exclusively within the jurisdiction of the Federal Longshore Act, finding further that the Claimant had no entitlement to workers’ compensation benefits under the Pennsylvania Workers’ Compensation Act.

On Appeal before the Appeal Board, the Board held that the Claimant’s testimony established several crucial facts, to include that the ship on which he was injured was “on the water” at the time of his injury, as opposed to being in a dry dock, which would have potentially triggered the concurrent jurisdiction under the Pennsylvania Workers’ Compensation Act.

Concluding that the Claimant was injured on a ship that was “on the water” at the time of injury, the Appeal Board affirmed the WCJ’s Decision, holding that the Claimant’s exclusive remedy was under the Longshore Act.

Appealing to the Commonwealth Court, the Claimant argued that there was insufficient evidence to establish that the ship was “on the navigable waters of the United States” when he was injured, a prerequisite for exclusive jurisdiction under the Longshore Act.  Arguing that the record was unclear as to the precise location of the ship within the Philadelphia Navy Yard at the time of injury, the Claimant sought a remand, arguing that additional evidence was required to determine whether concurrent jurisdiction under the Pennsylvania Workers’ Compensation Act was proper.

Concluding that the evidence of record established that the ship on which the Claimant was injured was “on the water” when the injury occurred, the Commonwealth Court held that the Claimant’s exclusive remedy for benefits for his injury was under the Longshore Act, and that the facts surrounding the Claimant’s injury did not support a concurrent jurisdiction scenario. 

So holding, the Commonwealth Court concluded that the Claimant’s injury and claim did not fall within a “twilight zone” exception that had been carved out by the United States Supreme Court underDavis v. Department Labor of Industries of Washington, 317 U.S. 249 (1942), permitting concurrent jurisdiction when an injury occurs within a “twilight zone”, when an Employee’s injury occurs in a location that is neither strictly maritime nor strictly land-based.

Davis involved a Steelworker who was killed while dismantling a bridge over navigable waters, with the Supreme Court finding that the deceased Steelworker was entitled to concurrent jurisdiction for the claim, since the injury occurred over navigable waters, triggering jurisdiction under the Longshore Act, and it involved the repair of a bridge, a non-maritime function, triggering jurisdiction under a State Compensation Act.

Relying upon the Pennsylvania Supreme Court’s ruling in Wellsville Terminal Company v. WCAB, 632 A.2d 1305 (Pa. 1993), wherein the Court stated that “the outlines of a case of an injury received on navigable waters while engaged in essential repairs to an existing vessel have long been clear and distinct… As to them there is no twilight.”, further holding that the mere tethering of a ship to land is not a sufficient nexus to classify activities on the ship as being “land-based” for purposes of asserting jurisdiction under the Pennsylvania Workers’ Compensation Act.

So reasoning, the Savoy Court concluded that the Claimant’s injury did not fit within theDavis “twilight zone” exception, since the Claimant was injured while performing a traditional maritime function of ship repair while the vessel in which he was injured was “on the water.”

The Takeaway

It seemed like a pretty shore thing.

In truth, this question probably got as far as it did because there is probably significant difference in the benefits potentially available to the Claimant under the Pennsylvania Workers’ Compensation Act, as opposed to under the Federal Longshore Act.  Without presuming to be a natural swimmer through the Longshore Act, one must presume that the procedural path to benefits under the Pennsylvania Workers’ Compensation Act is procedurally easier, that the benefit award might be higher, and that it is more difficult to terminate a workers’ compensation benefit claim under the Pennsylvania Workers’ Compensation Act, as opposed to under the Longshore Act.

ConnorsO’Dell LLP

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

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

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

In recent weeks Zero Dollar Allocation MSAs came into question. Initially it was thought that on any claim, even fully denied claims, where approval of a zero dollar MSA was sought, documentation would have to be provided to the Centers for Medicare and Medicaid Services (CMS) to support the zero dollar MSA. This would include submitting 1) Final settlement documents or a statement that none exist, 2) All court rulings including but not limited to rulings on compensability or 3) if no court ruling exists on compensability, treatment records showing no further treatment is needed for the work injury or a statement from the doctor concerning future treatment.

However, additional information surfaced later that indicated the above stricter guidelines would not apply to settlements of completely denied or disputed claims.

As for zero dollar allocation MSAs on accepted claims, it is our understanding that the above guidelines will likely be put in place. In these cases to secure CMS approval, you will need to get a court order that indicates the claim is not compensable or treatment records showing no further treatment for the work injury will be required.

With all that said, we will wait to see if CMS issues any new guidelines via policy memo.

ABOUT THE AUTHOR

This article was written by Joshua G. Holden, Esq., a member of Fish, Nelson & Holden, LLC, a law firm dedicated to representing employers, self-insured employers and insurance carriers in worker’s compensation and related liability matters. Mr. Holden is AV rated by Martindale-Hubbell, which is the highest rating an attorney can receive. Holden and his firm are members of the National Worker’s Compensation Defense Network (NWCDN). The NWCDN is a national network of reputable law firms organized to provide employers and insurers access to the highest quality of representation in workers’ compensation and related employer liability fields. If you have any questions about this submission or Alabama workers’ compensation in general, please contact Mr. Holden by emailing him at jholden@fishnelson.com or calling him directly at 205-332-1428.