State News

Candace H. Seaman, Deceased, By Paul J. Seaman, Her Husband, Individually and as Administrator of the Estate of Candace H. Seaman, v. Burgess Health Center and Farm Bureau Mutual Insurance Company, Court of Appeals of Iowa, No. 14-1385

Claimant, Candace Seaman, was employed by Burgess Health Center as a mental health therapist/social worker. On January 25, 2010, Claimant was injured in a multiple vehicle car accident during the drive from her home in Sioux City to her workplace in Onawa. She died as a result of injuries sustained during the accident. Her spouse, individually and on behalf of her estate, sought workers’ compensation burial expense and death benefits. The agency found Claimant’s death did not arise out of and in the course of her employment and denied the claim. The district court affirmed the agency’s decision.

Under the going-and-coming rule, “absent special circumstances, injuries occurring off the employer’s premises while the employee is on the way to or from work are not compensable.”Quaker Oats Co. v. Ciha, 552 N.W.2d 143, 150 (Iowa 1996).  There are several exceptions to the going-and-coming rule that Claimant contends apply here. The claimant first contends Claimant was performing a special errand for Burgess at the time of her car accident. The claimant also contends the dual purpose exception applies to Claimant’s accident. The claimant argues the special errand or dual purpose of Claimant’s travel to work on the morning of her accident was the need to deliver her completed patient reports to Burgess. In support of the contention, the claimant argues the reports were time-sensitive and Claimant would be subject to discipline if she failed to deliver the reports. 

The Court of Appeals rejects this contention, noting there is no evidence in the record to support it. The agency found “there [was] no factual basis in this record to find that claimant was on a special errand at the time of her accident and death on Interstate 29 while driving from her home to her place of employment.” The agency found there was not a dual purpose for Claimant’s travel. The agency found the reports were not due that day. The evidence showed Claimant would not have suffered any adverse consequences if she failed to deliver the reports to her employer that day. The claimant admits the employer did not require Claimant to report to work that day. The Court of Appeals thus finds the agency’s findings are supported by substantial evidence and its conclusions are not irrational, illogical, or wholly unjustifiable. 

The claimant also contends a third exception to the going and coming rule is applicable here: the second business situs exception. The exception recognizes that some travel to and from an employee’s home to the workplace may arise in the course of employment where the employee’s home serves a secondary office.

The Court of Appeals rejects this contention as well. Claimant did some work at home in the evenings to complete her reports. Her employer did have a telephonic dictation system, which would allow Claimant to dictate her notes from anywhere, including her office at Burgess or at her home. The record is clear, however, that Claimant’s home was not a dedicated office space or secondary office space. Claimant never saw clients at her home. Further, Burgess never specifically directed her to work from home. The employer did not expect her to work from home and did not provide compensation for her work at home. The employer did not pay mileage or other expenses associated with Claimant’s commute. Burgess did not provide her with any equipment for her home. The agency concluded: “Catching up on occasional work at home or completing tasks at home that could be completed at the employer’s premises is an insufficient basis to find that claimant had dual employment premises.” The Court of appeals thus finds the agency’s findings are supported by substantial evidence and its conclusions are not irrational, illogical, or wholly unjustifiable. The District Court judgement is affirmed.

Charles C. Mullen and Julie L. Mullen, Administrators of the Brandon Mullen Estate, v. Steven Grettenberg, Court of Appeals of Iowa, No. 14-1699

Claimant, Brandon Mullen, was an employee of Steven Grettenberg, the sole proprietor of Grettenberg Farms, Ltd. Claimant was emptying a grain bin when he became trapped inside and suffocated. Grettenberg was working in the vicinity of the accident.

Charles and Julie Mullen, administrators of Claimant’s estate, sued Grettenberg for damages, alleging he engaged in grossly negligent conduct under Iowa Code section 85.20(2) as Claimant’s “supervisor” and “co-employee.” Grettenberg moved for summary judgment. He argued he was Claimant’s employer rather than his co-employee and, accordingly, the estate’s exclusive means of redress was under the workers’ compensation statute. The district court agreed with Grettenberg. The court stated:

"In this case, the Defendant is a sole proprietor who also worked alongside his employees. As yet, there is no Iowa authority which states that a sole proprietor who works alongside his employees should be deemed a co-employee for purposes of Iowa Code section 85.20."

The court also rejected an equal protection argument raised by the estate.

On appeal, the estate reiterates that Grettenberg should have been deemed a co-employee under section 85.20(2) and again raises an equal protection challenge to the court’s interpretation of the statute.

The Court of Appeals first points out that if a court “finds that a defendant is the plaintiff’s employer, then the court has no subject matter jurisdiction over a section 85.20 gross negligence suit against that defendant.”Henrich v. Lorenz, 448 N.W.2d 327, 331 (Iowa 1989). The estate admitted Grettenberg was Claimant’s employer. Accordingly, the district court lacked subject matter jurisdiction. Further, the Court of Appeals notes that case precedent forecloses the possibility of Grettenberg being “deemed” an employee. See Horsman v. Wahl, 551 N.W.2d 619, 621 (Iowa 1996);Crees v. Chiles, 437 N.W.2d 249, 252 (Iowa Ct. App. 1988); Carlson v. Carlson, 346 N.W.2d 525 (Iowa 1984).

The estate also makes an equal protection claim, arguing the differential treatment of employees of sole proprietors and employees of other business entities bears “no reasonable relation to the purposes of the act.” However, the Court of Appeals recognizes that the act itself makes no distinction between these types of employees. As Grettenberg points out, the act differentiates between employers and employees, not between employees. Most employers pay for qualifying compensable injuries through the statutory workers’ compensation system, whereas employees who injure co-employees through gross negligence, pay through common law negligence actions. Claimant was foreclosed from suing Grettenberg if Grettenberg was Claimant’s employer, whatever statutory form the employer assumed. Accordingly, the equal protection clauses were not implicated.

The Court of Appeals thus affirms the District Court’s dismissal of the estate’s petition for lack of subject matter jurisdiction. 

Premium Transportation Staffing, Inc. and Dallas National Insurance Co., v. Alan Bowers, Court of Appeals of Iowa, File No: 15-0378.

In an arbitration decision, the deputy commissioner found Claimant, Alan Bowers, carried his burden of proving he sustained a permanent injury to his low back as a result of a work injury in 2011 and that he was permanently and totally disabled. In its decision, the deputy specifically gave greater weight to the opinions of Dr. Sedlacek, a treating physician, and Dr. Mathew, an examining physician. The deputy concluded “the greater weight of the medical evidence indicates claimant’s work injury of October 17, 2011, caused claimant’s current low back and coccyx pain, and resulted in permanent impairment.” Again, giving greater weight to the opinions of Drs. Sedlacek and Mathew, the deputy concluded the “[c]laimant’s credible testimony also clearly demonstrates ongoing permanent disability.”

The deputy noted that Claimant’s testimony “that he spent only $12.00 per day for food and expenses and kept the remainder of the $52.00 per diem as compensation is uncontroverted in the record.” The deputy concluded Claimant showed by a preponderance of the evidence that only a portion of his per diem was reimbursement for expenses, and that the appellants did not carry their burden of proof to show otherwise. Finding that $12.00 of Claimant’s per diem payment was an expense allowance under Iowa Code section 85.61(3), the deputy commissioner included the remaining $40.00 of the per diem payment in calculating the weekly rate. On intra-agency appeal, the commissioner adopted and affirmed the arbitration decision without additional comment.

The appellants filed a petition for judicial review. They asserted the commissioner’s findings with respect to whether or not Claimant sustained a permanent injury to his low back, whether Claimant was permanently and totally disabled, and whether the per diem payment should have been included in Claimant’s weekly benefit rate were not supported by substantial evidence in the record and involved an application of law to fact that was irrational, illogical, or wholly unjustifiable. The district court affirmed the commissioner’s decision.

Appellants now appeal. On appeal, they raise the same arguments to the Court of Appeals as proffered to the district court.

The Court of Appeals first notes that its review of final agency action is “severely circumscribed,” and it is obliged to accept the factual determinations made by the agency. The Court thus affirms the decision of the Iowa Workers’ Compensation Commissioner, stating:

"We have carefully reviewed the record, the briefs of the parties, and the district court’s thorough and well-reasoned ruling. The district court’s ruling identifies and considers all the issues presented. In applying the above standard-of-review precepts, and in giving the due deference we are statutorily obligated to afford the commissioner’s findings of fact, we approve of the reasons and conclusions in the district court’s ruling. Further discussion of the issues would be of no value. See Iowa Ct. R. 21.26(1)(b), (d), and (e)."

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

This is a two part analysis of the defense of occupational disease claims in New Jersey workers’ compensation.  The first segment will focus on the proofs in occupational disease cases and why this practitioner believes that these kinds of claims will be filed increasingly in coming years.  The second segment will focus on how employers can win occupational disease claims.

After the New Jersey Workers’ Compensation Act was reformed in 1979, occupational disease was defined in such a way that there are really four proofs that a claimant must make to prevail in compensation court, and language was inserted in N.J.S.A. 34:15-31 which provided some level of protection for employers.  While some practitioners believe it is easier for a claimant to win an occupational disease claim than a traumatic claim, this argument ignores the fact that there are additional proofs in an occupational claim that do not exist in a traumatic claim.

Both types of claims must satisfy the following two standards:

1)      An occupational disease as well as a traumatic injury must arise out of the employment;

2)      An occupational disease as well as a traumatic injury must occur during the course of employment;

3)      However, in an occupational disease claim, the claimant must also prove that the illness was produced by causes which are characteristic of or peculiar to the trade, occupation, or place of employment.

4)      Further, the claimant must show that work contributed in a material degree (not a minor degree) to the illness.

The statute also says, “Deterioration of a tissue, organ or part of the body in which the function of such tissue, organ or part of the body is diminished due to the natural aging process thereof is not compensable.”  If an employer can prove the condition is due to the natural aging process, the employer wins.

After the 1979 Amendments took place, employers began to test the new provisions of the law in response to an enormous number of occupational respiratory claims filed in the 1980s.  These claims were often filed by pipefitters or shipyard workers and generally involved exposure to asbestos, leading to a variety of asbestos-related diseases.  By the mid-1980s into the late 1990s, firefighters, police officers and factory workers around the state began to file thousands of occupational respiratory claims.  These respiratory claims constituted the single largest group of occupational disease claims in the Division of Workers’ Compensation at this point in time. 

Employers began to litigate these respiratory cases in the 1990s leading to fairly strong case law for respondents, particularly Laffey v. City of Jersey City, 289 N.J. Super. 292 (App. Div.), certif. denied, 146 N.J. 500 (1996).  Laffey stressed that courts should not focus just on the petitioner’s own description of the work environment as dusty and dirty, but on evidence of articles, treatises, and medical studies that prove a link between exposure to fumes and dust to complaints of shortness of breath and coughing.  Employers began to win a high percentage of trials, and the volume of such claims declined because the science often was not there to support the claim.

The next big wave of occupational claims occurred in the 1990s with occupational carpal tunnel claims.  These claims have also recently tailed off in volume for different reasons:  first, ergonomic changes in the workplace have created safer work environments for those who use their hands throughout the day.  Secondly, the New Jersey Workers’ Compensation Act continues to undervalue hand injury claims such that a hand injury is worth 2.45 weeks per percentage while an injury to the trunk is worth 6 weeks per percentage.  

The single most devastating case to occupational carpal tunnel claims was Huntoon v. Borough of Clementon, No. A-0956-09T3 (App. Div. July 28, 2010).  That case barred the claim of a clerical worker who filed a claim petition in 2007 alleging carpal tunnel syndrome from continuing typing and paper work.  The respondent’s attorney obtained prior family doctor records which showed in 2004 that petitioner already had a diagnosis of carpal tunnel syndrome. Even though she continued to allege exposures contributing to her illness through 2007, the Judge of Compensation held that the claim petition was time barred because petitioner did not file within two years from when she knew her condition and thought it was work related.  The Appellate Division affirmed. Because of this case, the statute of limitations remains a powerful defense to many occupational disease claims.

Enter the most recent wave of occupational disease claims, which began to form in the past five years.  Some law firms began fairly recently to market occupational disease claims or repetitive stress injuries through print and radio spots, specifically targeting older workers who may have problems with their shoulders, spine, legs and arms. These claims involve allegations that such medical conditions are a result of decades of repetitive work activities.  Prior to 2010, these claims had been occasionally filed in New Jersey but in recent years, the filings are dramatically increasing.  Clever law firms have recognized that employees are working later in life and longer than in the past. The so-called aging workforce is an enormous market in New Jersey and in other states for occupational disease claims of the upper extremities and spine.  This trend is here to stay for economic reasons: folks are working later and longer because they have to in order to survive.  One can expect that occupational disease claims for upper extremities and the spine will constitute an ever rising percentage of formal petitions in the coming years.

What is the main weapon that claimants use to advance occupational claims for the shoulder, spine, arms and legs?  It is the MRI.  The MRI study has probably cost employers nationally in workers’ compensation billions of dollars over the years because employers inevitably end up paying for normal age-related changes. The MRI is a study which provides a fairly accurate and clear picture of the body part:  a partial or full tear, a herniated disc, a torn meniscus or ligament, etc.  But it cannot date the finding or indicate whether the finding on MRI is age related or is the result of years of repetitive physical activity, whether at work or in the gym.  As Dr. Kenneth Peacock has said, “One can look at an oak tree and know that it did not spring up overnight.”  That is true, and employers know intuitively that they are often being asked to pay for normal age related changes on MRI, but the problem is that there is no medical science that can clarify when and why certain abnormalities are found in joints or disc spaces. One cannot simply argue to a judge of compensation that every bulging disc is preexisting and unrelated to physical exertion. Costs also limit the ability of respondents to counter a positive MRI.  For example, seldom does a doctor treating a right shoulder claim for a partial tear order an MRI of the asymptomatic left shoulder to compare the findings in the shoulders.  If this were done, one would often find that both shoulders have identical partial tears due to aging.  But this would be expensive and problematic.

So how does a doctor tell the difference between a joint problem that is caused by a worker who repetitively does a physical task and a joint problem that is caused by the natural aging process? If technology cannot solve the problem, then defense counsel must step in with the help of strong expert witnesses who can provide good medical literature and studies.  Discovery is crucial for employers, and it remains this practitioner’s belief that employers can win occupational disease cases only if they perform aggressive prior discovery.  In the next segment, the focus will be on the steps employers must take to successfully defend such cases, beginning with getting prior family doctor records from as far back as possible.  Without such records it is next to impossible to determine whether the medical condition is preexisting or produced by non-work activities or age-related changes.  Defending occupational disease claims without prior discovery is like picking horses at the race track based on names: you will only win by accident.

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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. 

After settling her work injury for 26% disability of the body, the claimant proceeded to a hearing against the Fund.  At a hearing, the ALJ found the claimant did have preexisting psychiatric disability and preexisting disability in her back but did not find Dr. Koprivica’s opinion that the claimant had preexisting bilateral carpal tunnel syndrome persuasive.  The ALJ found that the claimant was PTD as of the time of the hearing but stated that she failed to show that she was PTD through a combination of her work injury and preexisting conditions, noting she continued to work following the work injury.  Therefore, the ALJ only imposed a load on the Fund.

On appeal, the Commission modified the Award and found that the Fund was liable for PTD benefits.  The Commission basically stated that the claimant’s expert’s opinion that she was PTD due to the work injury and her preexisting conditions was not contradicted (again, the Fund did not have a report).  Therefore, the Commission found no basis for rejecting those opinions and held that the claimant was PTD due to her preexisting conditions and work injury in combination.

Fund Liable for PTD Benefits Because Claimant’s Testimony and Experts Found More Credible

In Ponticello vs. D&D Distributors a/k/a Gray Eagle Distributors, Injury Nos. 10-054964 & 11-108606, the claimant sustained a compensable injury to his right shoulder in 2010 and underwent surgery.  He was released to full duty on December 13, 2010 by Dr. Burke, the authorized treating physician.  He then attempted to return to work as a delivery driver, but due to persistent symptoms, took a lighter job as a forklift operator.  In August 2011, the claimant was unloading beer when he slipped, grabbed a handrail and injured his left shoulder and elbow.  He later underwent surgery for cubital tunnel syndrome as a result of the second injury. Dr. Volarich, the claimant’s expert, assigned work restrictions referable to each of his two injuries. At the time of the hearing, the claimant was 60 years old.  He left school in 7^th grade and never obtained a GED. He also attended a special school as a child because he had learning difficulties.  The claimant was unable to perform math problems, and could not read a book or write a paragraph.  Mr. England, the claimant’s vocational expert, believed that he was not employable due to his physical problems and limited academic background.  Ms. Kane-Thaler, the employer/insurer’s vocational expert, believed the claimant was employable in a semi-skilled category and found multiple jobs that the claimant could obtain.  At a hearing, the ALJ found that the claimant was not PTD but did impose a load on the Second Injury Fund. 

On appeal, the Commission modified the Award and found that the claimant was PTD as a combination of his preexisting injuries and the last work injury.  The Commission stated that there was a battle of the experts but they found the claimant’s testimony regarding his complaints and limitations to be persuasive.  They also found Mr. England’s opinion more persuasive than Ms. Kane-Thaler’s opinion because of the claimant’s age, poor academic background, and lack of transferable skills. 

Commission Retains Jurisdiction Over Issues Left Open in the Stipulations

State ex rel. ISP Minerals, Inc., v. The Labor and Industrial Relations Commission, Case No. SC94478 (Mo. S. Ct. 2015)

FACTS: The claimant sustained an injury at work and filed a claim. He later settled his claim with the employer/insurer. The stipulations stated the parties would “leave future related pulmonary med. care open” and further provided for “[a]uth med. care through Dr. Jos. Ojile...” Subsequent to the settlement, the employer refused to pay for inhalers prescribed by Dr. Ojile because the employer’s physician determined those medications were not necessary. (The employer’s physician is not specified).

The claimant then filed a request for hearing with the Commission to determine whether the employer was required to pay for the inhalers. The Commission entered an Order determining that it had jurisdiction to determine the employer’s liability for future medical care. The employer then filed a writ asserting that the settlement agreement between the parties divested the Commission of jurisdiction over the issue of future medical care. Specifically, the employer cited several cases wherein the Missouri courts held that after the parties had settled their claims, the Commission no longer has jurisdiction over those claims. 

HOLDING: The Supreme Court of Missouri reviewed the cases cited by the employer and noted that those cases were inapplicable. Essentially, the Court stated that in none of those cases did the parties leave future medical open and later attempt to litigate that issue. In a fairly short opinion, the Court stated that the Commission retains jurisdiction over the claim to the extent that the stipulations left the claim “open.”

60 Day Rule Does Not Apply to Medical Fee Disputes

In Phillips vs. Allied Systems, Ltd. d/b/a Georgia Allied, Medical Fee Dispute No. 13-00712, Dr. Frevert, the authorized treating physician, sought reimbursement for medical expenses from the employer and submitted an affidavit detailing the expenses.  The employer objected to admission of the affidavit, stating that Dr. Frevert did not provide it to the employer at least 60 days prior to the hearing.  The ALJ and Commission both admitted the affidavit over the objection.  The Commission stated the requirement that the employer be provided a complete medical report at least 60 days prior to the hearing is inapplicable to proceedings to resolve medical fee disputes.  The employer also objected to the affidavit on the grounds that no foundation had been laid to establish Dr. Frevert was qualified to give an opinion on the fairness and reasonableness of the medical charges.  The Commission also disagreed with this argument noting that the doctor had been practicing for 24 years and believed his qualifications enabled him to opine as to the reasonableness and fairness of the charges.  Therefore, the employer was ordered to reimburse Dr. Frevert for treatment rendered.

Claimant Failed to Meet Burden on Injuries Which Occurred After Her IME

In Reynolds vs. Treasurer of Missouri as Custodian of Second Injury Fund, Injury Nos. 12-000434, 12-019268, 13-048443, the claimant sustained work injuries in May 2008, October 2011, January 2012, March 2012, and July 2013. The claimant saw Dr. Volarich in May 2011 for an IME, at which time the doctor addressed the claimant’s May 2008 injury to the left ankle but did not address the injuries that occurred in 2011, 2012, or 2013.  The claimant settled all of his claims with the employer/insurer and then proceeded to a hearing against the Second Injury Fund for his January 2012, March 2012, and July 2013 claims.  At the hearing, the ALJ basically found that the claimant failed to meet his burden of proof because he submitted no expert medical opinion regarding those injuries. On appeal, the Commission affirmed.

ALJ and Commission Can Disregard Wage Statement and Set Their Own Average Weekly Wage if They Believe that Would Be Fair and Just

In Holmes v. City of Farmington, Injury No. 10-049057, the claimant was a part-time firefighter who was injured when he was ejected from a firetruck. Prior to his injury, he occasionally filled in for full-time firefighters but part-time firefighters were not given scheduled hours so his work schedule varied. The claimant worked a total of 11 hours in the three months leading up to his work injury. At a hearing, the ALJ determined that the claimant was “actually employed” for less than two weeks and the wages of a similarly situated employee should be used. The ALJ then determined that the wages of a full time fireman should be used to determined the claimant’s average weekly wage. The ALJ awarded TTD and PPD benefits.

On appeal, the Commission agreed with the ALJ’s determination of the average weekly wage but disagreed with her reasoning. They noted that the claimant was clearly employed for two weeks prior to the work injury and therefore, the wages of a similarly situated employee should not be used. However, the Commission stated that Statute allows them broad discretion to set the claimant’s average weekly wage if there are exceptional facts presented. The Commission stated if the claimant’s actual wages were used in the 13 weeks leading up to his injury, his TTD rate would be at the statutory minimum of $40.00 per week. They believed this was an exceptional circumstance because $40.00 per week was not a fair and just amount and the claimant faced the exact same risks faced by full-time firefighters. The Commission agreed that his average weekly wage should be that of a full-time firefighter and awarded $15,109.32 in unpaid TTD benefits.

A Cautionary Tale for Non-Subscribers – The Houston Court of Appeals recently affirmed
a $680,000 judgment in a negligence suit against Katy Springs & Manufacturing, Inc. Had the
company acquired workers’ compensation insurance for its employees, the suit would have been
barred by the exclusive remedy provisions of the Labor Code. The accident involved what the
opinion describes to be a company-made wire real that lacked any safety features and which was
recognized by several Katy Springs employees as being unsafe. Katy Springs & Manufacturing, Inc.
V. Joseph Favolora, Houston Court of Appeals – 14th Dist. 2015 WL 5093232.
Big Brother is Watching – Dr. Howard Douglas is the co-founder and medical director of
Western Medical Evaluators, Inc. (WME), a company that provided medical services in workers’
compensation disputes to entities insured by Texas Mutual Insurance Company. WME contracted
with designated doctors to perform designated doctor exams for workers’ compensation claims. Dr.
Douglas routinely billed the maximum compensation of four hours for every functional capacity
evaluation (FCE) performed, even though Texas Mutual’s investigation revealed that the average
time for an FCE by a WME technician was only thirty-nine minutes. Dr. Douglas was convicted
of defrauding Texas Mutual, a third degree felony, and the Court of Criminal Appeals affirmed.
Douglas v. State, No. 03-13-00092-CR, 2105 WL 5097573 (Tex. App.– Dallas August 26, 2015).
Employers and Carriers Beware – Remember that in In re XL Specialty Ins. Co., the Texas
Supreme Court determined that in the statutory workers’ compensation insurance policy context,
the insurer is not the representative of the insured; rather, the insurer is the client and party to a
pending workers’ compensation matter and retains counsel on its own behalf. In a lawsuit involving
a standard liability insurance policy, only the insured is a party to the case, and the insurer retains
counsel on the insured’s behalf. So, in workers’ compensation cases, the communication between
the insurer and the employer is not privileged, but in other cases involving employer liability
coverage, such communications are privileged. We note that attempts at legislation to have the
privilege apply in workers’ compensation failed this past legislative session.

Arthur S. Hernandez, M.D. is forbidden to provide treatment to workers’ compensation patients
beginning March 16, 2016. Chiropractor Hank K. Miller has been removed from the Designated
Doctor list and the MMI/IR certification list as of September 10, 2015. The removal appears to be
permanent.

The new state AWW for dates of injury from October 1, 2015 through September 30, 2016 is
$895.08. The maximum and minimum weekly benefit rates based on the new wage are $895 and
$134, respectively.

It has been the long-time practice of TPAs and insurance carriers to assign their own identifying
number to workers’ compensation claims. This caused problems for DWC in its attempts to link
medical bills to specific workers’ compensation claims. It is often the case that an insurance carrier
will change its TPA during the course of a claim, and thus the identifying number would change in
the EDI transmission. DWC has plans to require the same number to be used throughout the life of
a claim in submitting EDI data, but system participants are balking, given the problems the midstream
change will cause. But the agency is convinced that this will assist it in monitoring treatment

A new BRC pilot program has been implemented in the Dallas field office wherein the parties are
put into different rooms and the BRO shuttles between rooms to facilitate potential agreements as
to the issues. Given that BRCs are typically allotted only 45 minutes, it will be interesting to see
if this type of mediation, which is called “caucus based,” is more effective than what the parties have
come to expect after 25 years of practice before the Division.

The much awaited coding change from ICD 9 to ICD 10 is finally here. It is hard to say what
impact it will have on adjusters and other system participants, but change of any kind has unintended
consequences. And many of us are, frankly, resistant to change! One obvious difference is that
diagnoses will now be even more specific, resulting in more care being taken in evaluating initial
claims of injury. And evaluating extent of injury issues, and the relationship between disability and
the accepted or disputed claimed diagnoses,will require an even higher level of expertise. ICD 10
codes can be accessed on the internet, and we will be keeping the sites busy. There are several
sites, such as www.icd10data.com/Convert that provide crosswalks between ICD 9 codes and ICD
10 codes and descriptions for the new codes.
Here are a couple of entertaining examples of the trend toward specificity: W51.XXA: Accidental
striking against or bumped into by another person, V97.33XD: Sucked into jet engine, subsequent
encounter, S10.87XA: Other superficial bite of other specified part of neck, initial encounter, R46.1:
Bizarre personal appearance. Over time you may be lucky enough to see one of these in a comp
case. After all, there are now well over 60,000 codes in ICD 10, compared to around 13,000 codes
in ICD 9.

Vincent Burley was a resident of Georgia, and in May 2000, U.S. Foods, Inc. offered him employment as a delivery truck driver.  This offer of employment was extended by letter, which Mr. Burley signed.  He was in South Carolina when he signed the offer letter and was assigned to South Carolina by the company.  His responsibilities as a delivery truck driver included deliveries in Georgia and South Carolina, but no travel to North Carolina.  In 2002, U.S. Foods merged with another company and stopped operating in South Carolina.  U.S. Foods gave Mr. Burley the option of either terminating his employment and receiving a severance package, or transferring his assignment and supervision to North Carolina.  He elected to transfer to North Carolina.  After the transfer, Mr. Burley made deliveries to different customers and earned more money, but still never had any deliveries in North Carolina.  On September 23, 2009, he suffered a back injury during a delivery in Georgia.  His claim was accepted under the Georgia Workers’ Compensation Act and he received benefits for the injury.  On July 8, 2011, Mr. Burley filed a claim for benefits with the North Carolina Industrial Commission.

After the hearing, the Deputy Commissioner held that the Commission did not have jurisdiction over the claim.  The Full Commission affirmed, and the Court of Appeals reversed.  The Court held that Mr. Burley’s transfer to the North Carolina division involved modification of his employment contract, which was enough to find that a contract was “made” within North Carolina for purposes of establishing jurisdiction.  There was a dissent by Judge Dillon noting that the modification of the employment contract was insufficient for the Commission to have jurisdiction. 

The Supreme Court reversed the Court of Appeals holding that modification of an employment contract does not change the location of that contract.  The Court indicated that there can be only one contract of employment.  The Court noted that once an identifiable site has been established and there has been an offer and acceptance of the employment contract, that location will be used for purposes of jurisdiction regardless of subsequent contract modifications.  The Court further noted that N.C.G.S. § 97-36 included plain language regarding where a contract for employment was “made” and not where the contract was “modified.”

In this case, Mr. Burley executed his contract in South Carolina when hired by U.S. Foods.  The Court held that the subsequent internal transfer of supervision and assignment failed to establish a new employment contract, and the site of the original contract controlled for jurisdiction.  The Court characterized Mr. Burley’s situation as a mere internal transfer of supervision without a change in work capacity.  Justice Hudson dissented, noting that the Court’s holding barred jurisdiction even where there were substantial modifications to the employment contract and employment relationship.  Judge Hudson noted that this went against the spirit of the North Carolina Workers’ Compensation Act to be liberally construed to provide benefits to injured employees.  Instead, Judge Hudson saw the modification as establishing a new employment contract based on the facts of the case, thus changing the location of the contract to North Carolina for purposes of jurisdiction.

Risk Handling Hints:  The decision in Burley seems to establish that, short of a drastic modification of the employment contract, there will be only one location for purposes of jurisdiction.  The location where the employment contract was made, once “identifiable,” will be the site for jurisdiction.  The Court did not outline specific factors to consider when determining whether a modification is significant enough to establish a new employment contract.