State News

Cousineau McGuire Chartered proudly announces the hiring of a new associate, Joseph D. Klemann. Klemann, a 2014 graduate of William Mitchell College of Law, is practicing in the Workers’ Compensation group.

Prior to joining Cousineau McGuire, he was a Certified Student Attorney for the William Mitchell Law Clinic, where he worked with clients on mortgage and predatory lending issues. During law school, Joseph was a legal extern for the Honorable Kermit E. Bye, United States Court of Appeals for the Eighth Circuit.

Cousineau McGuire is pleased to announce that Whitney L. Teel has been elected to shareholder effective January 1, 2015. Whitney concentrates her practice in the areas of Workers’ Compensation and Medicare Secondary Payer Act compliance. She represents employers and insurers in all aspects of workers’ compensation disputes, from initial liability consultations, all the way through trial and appeal.

Additionally, Whitney is a contributor to LexisNexis’ The Complete Guide to Medicare Secondary Payer Compliance, a national publication regarding Medicare compliance in workers’ compensation claims. She also speaks nationally to clients and other attorneys on the Medicare Secondary Payer Act.

“I am honored to be elected shareholder,” says Teel. “As my practice continues to grow, it has been very rewarding to serve more clients and further develop my expertise.”

Whitney earned her J.D. from Hamline University School of Law, cum laude, where she served as Managing Editor for theHamline Law Review.

Citing procedural difficulty in hearings involving simultaneous issues of MMI/IR and extent of injury (EOI), Deputy Commissioner of Hearings Kerry Sullivan has implemented a limited and voluntary pilot project assessing a two-step (“bifurcated”) approach to resolve these disputes.  If the parties agree during the BRC that: (1) the EOI determination will likely lead to an agreement on MMI/IR, or (2) the EOI dispute has so many variables that deciding it first will lead to a better outcome and a more efficient hearing, they will sign an “Election” to bifurcate the hearing, and the EOI issue will be tried first, followed by a hearing on the MMI/IR issue (if necessary).  After the EOI hearing, the Hearing Officer will issue an Interlocutory Order including findings of fact on the EOI issue, after which the parties will have a reasonable period of time to reach an agreement.  If no agreement is reached, a second hearing will be held on the issues of MMI and IR based on the Hearing Officer’s EOI determination.  The Hearing Officer will then issue a Decision and Order incorporating the earlier interlocutory EOI findings, also making determinations on MMI and IR.

Sullivan cites that potential benefits of this approach include: (1) more agreements; (2) establishing correct medical benefits sooner based on the interlocutory order; (3) more control by parties over developing their evidence on MMI and IR; and (4) better, more accurate decisions, as the Hearing Officer will have a better range of adoptable options matching the EOI determination from which to choose.  

The Division anticipates that most cases in the pilot project will be ready for the CCH on EOI after only one BRC.  This is because in cases included in the pilot project, the parties will not be asked at the BRC to obtain alternate certifications or RME reports prior to the resolution of the EOI issue, as this evidence can be more efficiently obtained after that determination. 

The determination of whether the bifurcated approach will be used will be made at the BRC, only at the request of the parties, and will not be imposed over the objection of any party.  At this time, the pilot project is limited to proceedings conducted in the Division’s Weslaco field office. The Division plans to closely track the success of the project and make adjustments to improve it and correct any problems prior to expanding the program. Sullivan invites feedback, ideas, and suggestions by email: Kerry.Sullivan@tdi.texas.gov

The Commissioner fined James David Key, Sr., MD and Thomas Dunn, PT and ordered them to remove themselves as practitioners in the Texas Workers’ Compensation system.  Key was cited for submitting bills for hand or limb muscle testing that he did not perform, and for submitting a charge for health care that was not furnished.  Dunn was cited for improperly listing his NPI number on billing when he was not the rendering provider, for not including the correct billing codes when submitting medical bills, and for improperly  appending modifier “GP” to CPT Codes, which are limited to services provided by a physical therapist or a non-therapist pursuant to an outpatient physical therapy plan of care.

The Division is accepting public comment on revisions to the DWC-48, the form used to request travel reimbursement from Carriers for certain travel expenses to attend a DD exam, RME, post-DD RME, or  for travel expenses incurred for medical treatment not reasonably available within 30 miles if the distance traveled is greater than 30 miles one way. These revisions update the format and style for consistency with other Division forms, and add an “FAQ” to provide additional information about travel reimbursement.  The form also provides a section for the Carrier to respond to the request, indicating approval, denial, or partial denial of the claim.  A response is due within 45 days of receipt, pursuant to Rule 134.110.  If the Carrier denies or partially denies the request, the Carrier must provide a plain language explanation to the injured employee, explaining the reasons for the denial or partial denial, without “unnecessary use of technical terms, acronyms, and/or abbreviations.”  The form includes a notice to the Claimant stating that he/she may request a BRC to dispute denials or partial denials.

Revisions to the DWC-48 would incorporate amendments to 28 TAC §134.110(a), effective March 30, 2014. 

The revised form is currently available on the Texas Department of Insurance website at http://www.tdi.texas.gov/wc/rules/drafts.html.  The public comment period closes June 1, 2015  at 5:00 p.m., and public comments may be submitted by email: InformalRuleComments@tdi.texas.gov

On May 3, 2015, the U.S. Food and Drug Administration announced the filing of a consent decree against Medtronic, Inc. for repeatedly failing to correct violations related to the manufacture of Synchromed II Implantable Infusion Pump Systems.   The consent decree cites violations of the quality system regulation for medical devices, and requires the company to stop manufacturing, designing, and distributing new Synchromed II Implantable Infusion Pump Systems except in very limited cases.  The consent decree also requires Medtronic to retain a third-party expert to help develop and submit plans to the FDA to correct violations. 

The FDA first identified problems with the manufacture of these pumps in 2006, including over-infusion,  under-infusion, and delays in therapy for patients.  The FDA issued three warning letters notifying the company of major violations, including inadequate processes for identifying, investigating, and correcting quality problems, failure to document design changes, and failure to ensure the finished products met design specifications.

The agency notes that patients who are implanted with a Synchromed II Implantable Infusion Pump System should maintain regular follow-up appointments with their physicians, and should contact their physician immediately if they experience a change or return of symptoms, or hear a device alarm.

The Division recently updated the DWC Form-042 (Beneficiary Claim for Death Benefits) to include a notice in Spanish providing instruction on how to contact DWC regarding questions about the form or claims and how to locate the Spanish version of the DWC Form-042 on the Texas Department of Insurance website.  Due to this revision, Carriers will need to update any automated notification systems currently in place, as well as any additional communication notices sent to potential claim beneficiaries, to reflect this change.

On May 22, 2015, Governor Abbott signed Senate Bill 901, which amends Texas Labor Code Section 408.103 to reflect that an employee receives 75% (versus 70%) of the difference between his post-injury earnings and his average weekly wage if the employee is making less than $10 per hour.  (Previously, an injured employee was entitled to 75% of the difference between his post-injury earnings and his AWW if making less than $8.50 per hour.)  This change is effective for dates of injury on or after September 1, 2015.  

 New Division Rule 131.1 and Form PLN-04 become effective June 1, 2015.   The new Rule requires Carriers to review a Claimant’s eligibility for lifetime income benefits (LIBs) in a timely fashion, including when a Claimant requests LIBs, and review all of the statutory criteria for determining entitlement.  The new Rule also outlines the time frames for determining LIBs eligibility in situations where a Claimant requests LIBs in writing, as well as the time frames for the payment of LIBs after the Carrier reasonably believes the Claimant is eligible for LIBs.  The Carrier shall either initiate LIBs or deny the Claimant’s eligibility for LIBs within 60 days from the receipt of the injured employee’s written request.  In addition, Carriers must initiate payment of LIBs without a final decision, order, or other action of the commissioner if a Claimant meets the eligibility criteria for LIBs listed under Section 408.161 of the Texas Labor Code as a result of the compensable injury.  The Division noted in the rule adoption preamble that the initiation of LIBs without a final decision, order, or other action of the commissioner does not waive the Carrier’s right to contest the compensability of the claim in accordance with Texas Labor Code Section 409.021. The first payment of LIBs must be issued on or before the 15th day after the date the Carrier reasonably believes that the Claimant is eligible for LIBs. 

Beginning June 1, 2015, Carriers must also use the new, June 2015 version of the Form PLN-04 (Notice Regarding Eligibility for Lifetime Income Benefits) to advise Claimants whether the Carrier is initiating LIBs or denying LIBs eligibility.  If the Carrier denies LIBs eligibility, the Carrier must do so within 60 days’ receipt of the Claimant’s written request by sending the PLN-04 to Claimant, the Claimant’s attorney (if any), and the Division, providing a full and complete explanation of the reasons for the denial.  Carriers are reminded that the statement must contain sufficient claim-specific substantive information to enable the injured employee to understand the insurance carrier’s position or action taken on the claim, and to explain the reasons for disputing the issue in plain language without unnecessary use of technical terms, acronyms, and/or abbreviations.  Denials should be based on the information the Carrier has obtained or verified.  A Claimant may contest the Carrier’s denial by requesting a BRC.

Carriers may use only the Form PLN-04 for initiating or denying LIBs, as provided under Rule 124.2(e)(1) and 131.1(d).  Claimants requesting LIBs are not required to use a particular form; any manner of written request for LIBs by Claimant is permitted.   A Carrier’s failure to respond to a Claimant’s request for LIBs within 60 days from the receipt of the written request does not constitute a waiver of the Carrier’s right to dispute eligibility to LIBs.  

New Rule 131.1 does not limit the Carrier’s duty to initiate LIBs on or before the 15th day after the date the Carrier reasonably believes that the Claimant is eligible for LIBs as a result of the compensable injury. For example, if a Carrier receives a written request for LIBs, and then five days later has a reasonable belief that the Claimant is entitled to LIBs, Rule 131.1 requires the Carrier to initiate payment of LIBs within 15 days.  In other words, the deadline to initiate LIBs is not extended to the 60th day after receipt of Claimant’s written request. 

Note that the new Rule retains the Labor Code §408.161’s statutory eligibility requirements for LIBs.  

Additional information relating to the PLN-04 is available in the instructions on the form, and in the Division’s memo dated February 19, 2015. 

          The old adage is that New Jersey is a not a partial temp state, but is that really true?  In some states, likeNew Hampshire, an employee who returns to work but due to disability cannot earn the amount he or she was earning before the work injury may be eligible for significant benefits.  The adjuster may pay the employee 60% of the difference between pre- and post-injury earnings and that may continue for up to 262 weeks.  But this applies to a situationafter maximal medical improvement.  New Jersey clearly does not have any requirement like this becauseNew Jersey is not really a wage loss state:  it is a functional loss state which compensates injured workers after maximal medical improvement with dollars that correspond with the percentage of loss of bodily function.

             But what about this increasingly common situation? Ashley Franklin works for Krogers Inc. in the deli department. She earns $20 per hour for a 40-hour week.  She makes $800 per week.  She fractures her leg at work and is out of work for the month of January 2015, receiving $560 per week in temporary disability benefits.  Krogers offers Ashley a modified duty sedentary job for the month of February.  The workers’ compensation doctor restricts her to four hours per day, and she makes $400 per week, half her normal wage, for the month of February. She works half a day for four straight weeks. Ashley calls the adjuster and asks, “what about the other $400 per week I am losing?”

             Ashley reaches maximal medical improvement on March 1, 2015.  She contacts a lawyer about her loss of wages in February, complaining as follows: “When I was working the job, I was making $800 per week.  On temporary disability, I was getting $560 per week tax free.  Now I am working on modified duty, limited to half a day by my comp doctor, and I am earning less than I was on temporary disability -- and it’s all taxable!”

             This question comes up every month in this practitioner’s practice.  Which of the following should the claims examiner tell Ashley?

             A. “New Jersey does not have partial temp. You get nothing.”

            B. “We will pay you $160 weekly in temp benefits to get you to $560, your temp rate.”

            C. “We will pay you $280 in temporary disability benefits weekly, half of what you were paid while on temporary disability.”

            To answer this question, the practitioner has to studyN.J.S.A. 34:15-38. That is the section which explains how to pay temporary disability benefits.  The question is whetherNew Jersey compensates only for loss of whole days or fractions of days.  Here is what the statute says:  first you determine the first day that the employee cannot work due to the accident up to the first day the employee can return to work and continue at work.  In Ashley’s scenario that is 28 days.  Then you “subtract from the number the waiting period and any day and fraction thereof the employee was able to work during the this time, and divide the number by seven.”  The statute concludes, “the resulting whole number and seventh will be the required period for which compensation is payable on account of temporary disability.”

             The language of the statute is confusing.  On the one hand, it recognizes a partial loss of a day by saying “any day and fraction thereof the employee was able to work.”  That would suggest that Ashley has a valid claim for two weeks of temporary disability benefits because she lost 20 half days. On the other hand, the statute speaks in terms of the “resulting whole number and seventh.”  The intention of the legislature is arguably less than clear in reading this statute.

             There are no published decisions on this issue.  In fact, there is only one decision in the Division of Workers’ Compensation directly on point, namelySoto v. Herr’s Foods, Inc., 2012 NJ Work. Comp. LEXIS 4 (September 7, 2012).  That case also involved a situation where the injured worker was limited to four hours per day by the treating doctor while on light duty.  Mr. Soto was getting $683.31 per week on temporary disability but was returned to light duty earning a net payment of $329.43 per week, which was $353.88 less per week than he was earning on temporary disability.  The Honorable Emille Cox ruled in favor of the petitioner: 

It seems rather obvious to this Court that if Respondent is responsible for the payment of temporary disability benefits, and, in this case, the amount to which Petitioner is entitled is $683.31 per week, to allow Respondent to provide minimum light duty and only pay the Petitioner an amount less than $683.31 to which he is entitled defeats the purpose of both the temporary disability and the light duty provisions of the workers’ compensation statute.

             Judge Cox did not call thistemporary partial disability benefits.  His decision was not appealed, no doubt a wise decision by the employer.  The term temporary partial disability refers more to the example at the beginning where an employee returns to work on a full-time basis earning less than he or she earned before the injury well after maximal medical improvement.  The question in Ashley’s scenario is limited to payment before she reaches maximal medical improvement.  It is this:  is temporary disability defined in New Jersey to include only whole days lost or parts of days where the treating doctor will not allow the worker to work more than parts of days?

             In this practitioner’s experience, most workers’ compensation judges agree strongly with Judge Cox, and in fact most employers also agree that modified duty when limited to half days by the treating doctor should not result in a financial penalty to workers.  In other words, the employee restricted to working half a day by the workers’ compensation doctor should not see his or her compensation drop below the amount earned in temporary disability benefits.

 The general consensus is that something must be done in Ashley’s situation because it seems inequitable for her to earn less on modified duty half days than she was earning while out of work receiving tax free temporary disability benefits. Where there remains some difference in opinion is how much Ashley should be paid over and above the $400 in earnings for half days of work that she has lost. The way Section 38 reads in subtracting any day and fraction thereof that the employee was able to work suggests that if this issue gets to the Appellate Division, the Court would order the employer to pay 70% of the four weeks of half days lost by Ashley in the month of February.  That would mean she would get paid $280 per week in temporary disability benefits.  Every two days lost becomes one day of temporary disability benefits. Adding that to the $400 per week in earnings, she would be earning $680 per week.  Of that amount $400 per week would be taxable, putting her basically in the same position she was in while out on temp earning $560 per week. 

 In the end, New Jersey needs a published decision by the Appellate Division to resolve this issue.  Absent that, employers have to do what they perceive to be both consistent with the law and fair under the law. 

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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.