State News

         So you are an Employer, by definition under most workers’ compensation statutes a “master”, with your employees, likewise being designated as “servants”, to fuel the pecuniary fiefdom that you propagate.

              Yes, in business, for profit, with associated overhead for business expenses, to include payroll, benefits, yadda, yadda.

            Of course, for your protection, or for that of whatever corporation you have designed and constructed, you have procured the necessary insurance coverages, to include coverage for general liability purposes, potentially meaning whatever, obviously subject to contractual interpretations, as well as, of course, workers’ compensation insurance coverage, in order that your company is not personally or corporately liable for injuries sustained by employees in the course and scope of their employment, in the course of which they are expected to be performing associated tasks commensurate with your business or your corporation.

            You have to ask yourself is every allegedly employee-sustained injury covered by workers’ compensation statutes, and, by extension, workers’ compensation insurance coverage, requiring a threshold analysis as to whether the alleged injury has occurred within the four corners of what we consider the course and scope of employment.

            And the answer is, sometimes yes, as well as sometimes no, beyond obviously working with your broker, your insurance carrier, and either in-house or extraneous counsel.

            Let’s begin with some basics.

            Workers’ compensation statutes have been in place since a horrific accident in New York in 1911, the Triangle Shirtwaist Fire, resulting in 146 workers dying when trapped in a burning factory, with Pennsylvania’s workers’ compensation statute being enacted in 1915, and then evolving over several structural and procedural reforms, the last of which were in the 1990s, reforming indemnity (wage loss) and medical compensation benefits. 

            Having survived reforms, both positive and negative for Employers and insurance carriers, the purpose of workers’ compensation statutes is obviously humanitarian, as well as to act both as a safety net for injured employees, and to serve as a “grand bargain”, for businesses, Employers, and by extension, insurance carriers, as the exchange is that employees surrender their right to sue for civil or personal injury damages, with Employers being given the certainty of scheduled losses for both wage loss and medical benefits.

            So when does the analysis of “course and scope of employment” begin?

            Well, typically, at the first report of injury, as the Employer, and its insurer gather information regarding the claim, with the following considerations being necessary to implicate the occurrence of a work-related injury, resulting in wage loss disabling injuries, to include:

·         An employer/employee relationship;

·         A work-related injury occurring within the course and scope of employment;

·         That the work-related injury was not caused by non-work-related factors;

·         That the work-related injury has resulted in the Claimant being disabled from being able to perform either pre-injury work, or available modified-duty work;

·         That the Claimant is not impeachable on other grounds, to include fraud or dishonesty;

·         That the Claimant has not refused or failed to return to work; and,

·         That the Claimant is not fully recovered from the alleged work injury.

            Sounds simple enough.

            If it were that simple, no one would be reading this.

            Case in point, being one recently defended by our firm, involving an employee showing up for work early, routinely doing so until one day when the employee claimed an injury, while not actually performing any work for the Employer, and not even being scheduled to work at that time.

            From the Claimant perspective, the argument is, well, I was at work, so it must be work-related.  If that were all that there was to it, with the self-insured or insured, somebody might be writing that employee a check, and paying medical bills.

            It not only does not work like that, it is not supposed to work like that, and it should not work like that.

            It should require an injury occurring while an employee is actually performing work or services for the Employer that causes or contributes to a physical, psychological, or occupational injury disabling the employee from being able to continue performing that work or service, at which point, logically, there should be mechanisms and procedures to protect both employee and Employer from the potential liability imposed.

            Merely being present at a work location does not mean that you are actually working, and should not mean that you are, therefore, entitled to compensation for an accident resulting in injury.

            The caveat to that storyline is that there might well be other liabilities that the Employer is sensitive to incurring, particularly potential liability for personal injury damages, not subject to a schedule, or to any dollar limitation, although obviously requiring evidence of negligence, fault, and cause.

            So if the employee is injured when not scheduled to work, is not actually performing any work, is not scheduled to be paid when allegedly injured, does the employee have a right to workers’ compensation benefits, and/or is the Employer liable under comp law?

            Well, it depends upon what the meaning of “work” is!

            In our view, popular or not, although legally sound, is that, no, the employee is not working, and that the injury is, therefore, not compensable under workers’ compensation law, with there being zero guarantee that the allegedly injured employee will accept the logic of our analysis, particularly when counseled by representation vested in the contingent fee recovery that necessarily requires the employee to pursue and recover compensation benefits.  Absent other considerations, we would recommend a vigorous defense calculated on denying and dismissing the injury claim.

            Concern about liabilities not subject to a schedule or statute might actually result in Employers considering acceptance of an otherwise non-work related injury, in avoidance of potential personal injury liability.

            We get it, that makes business sense, as hard as it is to swallow such a bitter pill.

            Anyone actually following this?

            The point being that the mere fact that someone is an employee, that you are an Employer, and that your employee is claiming injury, does not, in and of itself, mean that the alleged injury is either work-related, and/or has occurred within the course and scope of employment.

            Seems logical, although logic is not always the predicate for making decisions regarding claim disposition and resolution.

            And if looking for the easy answer, it is not within reach.

            And so what do we do?

            Well, we serve, we protect, we defend, and we seek out and expose claim-defying facts to insulate your company, your business, your commercial purpose from liability.

            Trust us; we completely understand how important business continuity and risk management is to a successful company, corporation, place of employment, as well as the practical exercise in the power of work, and experience. 

            We do this with grace, dignity, respect, and the utmost professionalism.

            And, no less importantly, we do it because it needs doing!

            So if in need of defense counsel in Pennsylvania, you know who to call!

ConnorsO’Dell LLC

            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.

Cousineau, Waldhauser & Kieselbach is proud to announce Jennifer Fitzgerald, Tom Kieselbach and Jim Waldhauser have been selected as 2019 Minnesota Super Lawyers.  Elizabeth Cox and Whitney Teel have been selected as 2019 Minnesota Rising Stars.

Super Lawyers, a Thomson Reuters business, is a rating service of outstanding lawyers from more than 70 practice areas who have attained a high degree of peer recognition and professional achievement. Peer nominations and evaluations are combined with third-party research, and selections are made on an annual, state-by-state basis. Designation as a Super Lawyer is awarded annually to only 5% of the licensed, active lawyers in Minnesota. In 1998, Super Lawyers launched Rising Stars in Minnesota to recognize the top up-and-coming attorneys in the state — those who are 40 years old or younger, or who have been practicing for ten years or less. Designation as a Rising Star is awarded annually to no more than 2.5% of licensed, active lawyers. For more information, visitwww.SuperLawyers.com.

Another chapter in the never-ending stop-loss saga came to a close on June 24, 2019 when the State Office of Administrative Hearings (SOAH) finally issued its long-awaited decision in the stop-loss cases.
 
The stop-loss cases involve the “stop-loss exception” to the Division’s former Inpatient Hospital Fee Guideline which was in effect from August 1, 1997 through March 1, 2008.  This rule stated that the hospital is entitled to reimbursement of 75% of its charges if the services provided by the hospital are both “unusually extensive” and “unusually costly.”  The issue in these cases is how to interpret and apply the terms “unusually extensive” and “unusually costly” services. 
 
To give you an idea how long it’s taken SOAH to issue a decision, the hearing in the Vista stop-loss cases ended February 24, 2016 and the briefing finished October 7, 2016 when the parties filed their proposed findings of fact and conclusions of law.  Most of the non-Vista stop-loss cases were tried in 2014.  The record has been kept open in those cases while the Vista cases were tried.
 
SOAH’s Decision and Order consists of two parts.  The first part contains the legal conclusions common to all of the cases.  The second part consists of attachments listing all of the stop-loss cases with the case-specific decision for each case. 
 
SOAH’s decision addressed a total of 532 stop-loss cases.  The stop-loss exception was held to apply in only 14 cases; it was determined that no additional reimbursement was owed to the provider in 461 cases; and, it was determined that, under the per diem methodology, additional reimbursement was owed to the provider in 57 cases. 
 
To view a copy of the Decision and Order, click here.
 
Copyright 2019, James M. Loughlin, Stone Loughlin & Swanson, LLP

This month the Texas Division of Workers’ Compensation readopted in full the old law rules found at Chapters 41-69 of Title 28, Part 2 of the Texas Administrative Code.

For those who may not know, old law claims are claims with dates of injury prior to January 1, 1991.  This means that the most recent old law claims are over 28 years old.  The old law statutes and rules are continued in effect for these claims. 
 
The readoption of the Division’s old law rules was done pursuant to Texas Government Code §2001.039, which requires a state agency to review each of its rules every four years and to readopt, readopt with amendment, or repeal the rule. 
 
Public comments submitted during the review proposed amending the medical fee guidelines for old law claims.  The Division noted that any suggested amendments may be considered in future rulemaking.
 
Amendments to the medical fee guidelines were proposed for old law claims because, according to prior statements by the Division, the only fee guideline applicable to old law claims is the1996 Medical Fee Guideline, which contains set reimbursement rates for services that are now over 23 years old. 
 
Therefore, none of the Division’s current fee guidelines apply to old law claims.  However, it is not uncommon for carriers to reimburse providers in old law claims using the current fee guidelines.
 
Copyright 2019,James M. Loughlin, Stone Loughlin & Swanson, LLP

The Texarkana Court of Appeals held this month that a claimant failed to exhaust her administrative remedies at the Division of Workers’ Compensation where the allegations in her lawsuit against the carrier were not first presented to and ruled upon by the Division.
 
The claimant filed suit against the carrier’s third-party administrator and her employer for fraud, fraudulent inducement, gross negligence, and violations of the Deceptive Trade Practices Act and Texas Insurance Code. The gist of her allegations is that she was denied full benefits as a result of misrepresentations and mishandling of the claims process by the carrier.
 
In a prior related proceeding, the Austin Court of Appeals had already determined that the Division has exclusive jurisdiction over the claims in her lawsuit.  The claimant subsequently entered into a benefit dispute agreement agreeing: 1) that the carrier was relieved of liability because she did not file a claim within one year of her injury, and 2) her recovery was barred under the Texas Workers’ Compensation Act because she elected to pursue a remedy and recover under the laws of another jurisdiction.
 
Following the agreement, the claimant filed suit again, bringing the same claims but arguing that because of the agreement she had exhausted her administrative remedies and could now proceed with her lawsuit.  The issue before the Texarkana Court was whether she had, in fact, exhausted her administrative remedies.
 
The Texarkana Court noted that the agreement addressed only issues of compensability. It did not address the extent of the injury, preauthorization, medical necessity, or administrative violations.
 
The Court held that the claimant’s complaints needed to be raised with the Division and a review of the agreement shows that they were not.  According to the Court, nothing in the appellate record shows that the claimant either exhausted administrative remedies under Chapter 413 or provided the Division with notice of administrative violations.
 
The Court’s opinion includes a detailed discussion of the Division’s exclusive jurisdiction, including the Texas Supreme Court holding that the Texas Workers’ Compensation Act “provides the exclusive procedures and remedies for claims alleging that a workers’ compensation carrier has improperly investigated, handled, or settled a claim for workers’ claim for benefits.”
 
Steele v. Murphy & Beane, Inc., No. 06-19-00008-CV, 2019 WL 2998278 (Tex. App.—Texarkana, July 10, 2019).
 
Copyright 2019,James M. Loughlin, Stone Loughlin & Swanson, LLP

The Tyler Court of Appeals recently held that the Division has exclusive jurisdiction to determine whether administrative costs qualify as workers’ compensation benefits that the carrier is entitled to recover as part of its subrogation lien. 
 
The Act provides that the net amount recovered by the claimant in a third-party action shall be used to reimburse the carrier for benefits that have been paid for the compensable injury.  The Act defines benefits to include medical, income, death, or burial benefits based on a compensable injury.
 
According to the decision, the carrier allegedly paid a third-party administrator a flat-fee of $5,354,500.00 to assume liability for medical costs on a catastrophic claim. The TPA paid actual medical costs of $2,259,378.58.  The carrier allegedly filed an affidavit in the claimant’s third-party action claiming a lien in the amount of $5,587,479.18. This amount allegedly included the $5,354,500.00 paid to the TPA as well as “hundreds of charges for bill and utilization review.”
 
The claimant’s survivors brought suit against the carrier alleging various fraud claims, all premised on the assertion that a carrier’s administrative costs are not recoverable as part of its subrogation lien.  The carrier filed a plea to the jurisdiction which the trial court denied.   The carrier then filed a petition for writ of mandamus which the Tyler Court of Appeals granted.
 
The Court held, “It is axiomatic that the DWC, tasked with regulating and administering the business of workers’ compensation and monitoring insurance carriers, attorneys, and other representatives for compliance with the Act, should be the decision maker with regard to whether benefits have been inflated and administrative costs have been wrongfully included in a subrogation claim.”
 
The Court explained that because the fraud claims arise out of the carrier’s allegedly improper investigation, handling, or settling of a claim for worker’s compensation benefits, the Division has exclusive jurisdiction over those claims and the claimant’s survivors were required to exhaust their administrative remedies with the Division.
 
Therefore, the Court held that the fraud claims, should be abated pending the Division’s resolution of whether the carrier is entitled to seek administrative costs as part of its subrogation claim, and if not, whether the carrier committed an administrative violation by allegedly doing so.
 
In re Old Republic Risk Mgmt., No. 12-19-00144-CV, 2019 WL 2462486 (Tex. App.—Tyler, June 12, 2019).
 
Copyright 2019,James M. Loughlin, Stone Loughlin & Swanson, LLP

We’ve heard reports that Brook Army Medical Center (BAMC) will not release medical records to a carrier unless the claimant signs a DD Form 2569, Third Party Collection Program/Medical Services Account/Other Health Insurance.
 
What is a DD Form 2569, you ask?  It states in part, “ACKNOWLEDGMENT:  I hereby agree to pay for any service not covered in whole or in part by my third-party insurer.”  BAMC’s current policy is reportedly that it will not accept a standard HIPAA-compliant medical records release signed by the claimant.
 
Claimants are understandably reluctant to sign the DD Form 2569 agreeing to be personally liable for any unpaid charges.  And without the form, BAMC will not provide its medical records to the carrier.  As a result, carriers have been unable to obtain necessary medical records from BAMC. 
 
Matt Zurek, DWC’s Deputy Commissioner for Health and Safety, was asked about this practice by BAMC at the July 8, 2019 stakeholder meeting.  He said the DWC has not seen the issue before but that there’s no provision in section 413.0112 or the informal draft rules that allows the carrier to withhold payment if BAMC won’t provide its records.
 
Please let us know if you’ve encountered a similar issue trying to get records from BAMC.
 
Copyright 2019,James M. Loughlin, Stone Loughlin & Swanson, LLP

The Texas Division of Workers' Compensation has published an informal working draft of the rules necessary to implement newly-enacted section 413.0112 of the Act, referred to informally as the Brooke Army Medical Center (BAMC) Bill.

This new statute requires carriers to reimburse a federal military treatment facility (FMTF) the amount charged by the facility as determined under 32 C.F.R. Part 220.

The purpose of the statute is to prevent injured workers from being balance-billed by a FMTF for medical treatment when the carrier does not pay the FMTF’s billed charges.

Section 413.0112 also requires the commissioner to adopt rules necessary to implement this section, including rules establishing:

1. requirements for processing medical bills for services provided to an injured employee by a federal military treatment facility; and 
2. a separate medical dispute resolution process to resolve disputes over charges billed directly to an injured employee by a federal military treatment facility.

The informal draft rules do the following:
 
Rule 134.150

• Clarifies bill processing and handling requirements.
• Clarifies that an insurance carrier may only deny a medical bill based on compensability, extent, liability, or medical necessity.
• Creates obligations for medical bill reporting by an insurance carrier requiring submission of the first bill received from an FMTF.
• Clarifies that unreported bills are subject to a request for information under Rule 102.9.
• Provides for an administrative violation in subsection (h). 

Rule 134.155

• Provides that disputes for medical necessity will be handled under Rule 133.308, that an injured employee may initiate a dispute, and that the insurance carrier will be responsible for all independent review organization fees.
• Provides that all other disputes will be handled under the existing process for benefit review conferences.
• Notes that a first responder may request expedited handling.

A stakeholder meeting was held on July 8, 2019 to discuss the informal draft rules.  The Division is required to adopt the rules necessary to implement section 413.0112 no later than December 1, 2019.

-  Copyright 2019,James M. Loughlin, Stone Loughlin & Swanson, LLP.

There are precious few reported decisions dealing with the jurisdictional requirements for bringing a claim petition in New Jersey when a New Jersey resident is employed out of state, is injured working out of state and is hired out of state.  In the reported case of Marconi v. United Airlines, A-0110-18T4 (App. Div. July 22, 2019), the Appellate Division affirmed the dismissal of two claims against United Airlines for lack of jurisdiction in just this situation. The case was successfully handled at both the division and appellate levels by Prudence Higbee, Esq., a partner with Capehart Scatchard.

The facts in the case were not disputed.  Richard Marconi lived in New Jersey and suffered a work injury to his left hip on January 31, 2015 working for United Airlines in Philadelphia.  United paid full benefits to Marconi under Pennsylvania law, but eventually Marconi brought two claim petitions in New Jersey seeking permanency benefits that were not available in Pennsylvania.  One claim petition was for the accident in 2015 and the other was an occupational claim alleging work exposures from 1988 to the present.  Mr. Marconi admitted he was not hired in New Jersey and worked most of his career in Philadelphia with only a brief period of employment at Dulles Airport. 

United moved to dismiss both claim petitions for lack of jurisdiction in New Jersey.  Marconi tried to build up his contacts with New Jersey as much as he could.  He argued that his supervisor reported to a United employee at Newark’s Liberty International Airport.  Marconi also contended that he himself would telephone United staff at Liberty International Airport once every couple of months for technical advice.  He received training all over the world, including in Newark.  He would fly from Newark whenever United assigned him to do “field service.” Marconi’s supervisor sometimes would drive to Liberty International Airport to retrieve parts there.  United argued that these contacts with New Jersey were truly minimal.

The Judge of Compensation reviewed Professor Larson’s treatise on grounds for jurisdiction:

1.      Place where the injury occurred;

2.      Place of making the contract;

3.      Place where the employment relation exists or is carried out;

4.      Place where the industry is localized;

5.      Place where the employee resides; or

6.      Place whose statute the parties expressly adopted by contract.

The Judge of Compensation dismissed both claims, finding that residence in New Jersey alone has never been sufficient for jurisdiction. The Appellate Division emphatically agreed: “We conclude that residency alone is an insufficient basis to confer jurisdiction on the Division for extra-territorial workplace injuries.”

Petitioner argued on appeal that even if residency alone was insufficient, the fourth factor, namely “place where the industry is localized,” should have been sufficient for jurisdiction in conjunction with petitioner’s residency in New Jersey.   There are only one or two published cases that have ever discussed the concept of “localization” of an industry, and Marconi provides the most complete analysis to date, citing cases from around the nation on this concept.

First the Court said that “in no state workers’ compensation scheme was localization alone sufficient to confer jurisdiction.”  Professor Larson explained the rationale for localization of an industry as a criterion for jurisdiction:  “The state in which the employer’s business is localized has a relevant interest in a compensable injury . . . since the obligation side of the compensation relation is as much a part of that relation as the benefit side, and since the burden of payment would ordinarily fall most directly on the employer and community where the industry is centered.” The Court seemed to accept Marconi’s argument that New Jersey was a place where United’s industry was localized, but it still rejected jurisdiction.  That was the most interesting aspect of the case.

The Appellate Division in Marconi analyzed the concept of localization in terms of advancement of company interests. “It is the nature and frequency of the employee’s relationship with the localized presence of the employer that lends weight to the fourth Larson factor.  In other words, in this case, did Marconi’s ‘duties to a substantial extent . . . implement the localized business’ of United in New Jersey?” (citations omitted).   The Court answered its own question in the negative. “Essentially, nothing in the course of Marconi’s two-decade employment with United advanced the company’s localized interests in New Jersey.  In these circumstances, although United maintained a localized business interest in Newark, New Jersey has no substantial interest in exercising its jurisdiction over the petitions.” 

The Court explained that Marconi’s contacts with Liberty International were mainly to advance Marconi’s ability to perform his work in Philadelphia.  “Even when Marconi used United’s facilities at Liberty International Airport, it was to serve United’s interest elsewhere around the country.”

After disposing of the traumatic claim petition for lack of jurisdiction, the Court then dealt briefly with the occupational claim petition, reminding practitioners that there is a different standard for jurisdiction in occupational claims from traumatic claims.  The Court cited Williams v. Port Authority of New York & New Jersey, 175 N.J. 82 (2003) to make this point clear:  “The petitioner must demonstrate either that (1) there was a period of work exposure in this State that was not insubstantial under the totality of circumstances and given the nature of the injury; (2) the period of exposure was not substantial but the materials were highly toxic; or (3) the disease for which compensation is sought was obvious or disclosed ‘by medical examination, work incapacity, or manifest loss of physical function’ while working in New Jersey.” Obviously petitioner could not meet this test because there was no work exposure in New Jersey.

In the opinion of this practitioner, the Marconi decision provides the most thorough analysis to date of the fourth criterion cited by Professor Larson in his treatise, namely “localization of business.”  The Court flatly concludes that “localization of business” alone is insufficient for New Jersey jurisdiction.  The implications of this statement are significant because there are hundreds of cases pending in New Jersey now involving medical claim petitions where the injured worker lives in New York, is hired in New York, and works in New York.  The only connection to New Jersey in many of these claims is that a medical procedure occurred in New Jersey.  Medical providers have filed countless claims of this nature seeking jurisdiction in New Jersey to argue that the New York fee schedule should not apply and ultimately seeking the right to additional reimbursements.  The Appellate Division has yet to weigh in on these cases.  When one of these MCP cases finally reaches the Appellate Division, one can expect that the analysis in Marconi will certainly be considered.

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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. 

On July 12, 2019, Cousineau, Waldhauser & Kieselbach, P.A. presented its’ annual client seminar. Attendance was excellent. Natalie Lund organized and hosted the seminar.  We thank Natalie for her excellent and hard work. The topics included interesting and helpful takes on:  Arising out of and in the Course of, Dykhoff, PTSD, Surveillance, Caselaw Update, #MeToo in Mn, How to Make Rehabilitation Work,  and Compensability Questions and Answers.

The reviews from our clients were spectacular. All of the  topics and speakers were  given top marks. We thank our clients and guests for such positive feedback. Our next seminar will be in 2020. We promise that the quality will remain the same. We will provide a seminar which is geared to our clients’ needs and as always will be informative, helpful and entertaining.