State News

On 12/1/16, the DWC published its 2016 Biennial Report. The DWC reports significant improvements since the 2005 HB legislative reforms including lower claims costs and premiums, higher employer participation rates, better access to care and return to work outcomes and fewer disputes. While most of the signposts indicate improvement, according to DWC, designated doctor disputes remain high.  The DWC made several legislative recommendations including revising certain Labor Code provisions to allow for electronic transmission or information rather than requiring certified mail or personal deliver in certain circumstances.  The DWC will once again attempt to make changes to the LIBs statute and the archaic language of “incurable insanity” and “imbecility” currently used to describe the degree of a brain injury that qualifies an injured employee to be eligible for LIBs.  The entire 2016 Biennial Report can be found at:http://www.tdi.texas.gov/reports/dwc/documents/2016dwcbienlrpt.pdf. 

115 carriers participated in the 2016 PBO Audit.  42 were High Performers, 70 were Average Performers and 3 were designated as Poor Performers.  Performance measures included timely payment of initial TIBs, timely submission of initial payment data through EDI, timely processing of initial medical bills, timely processing of requests for reconsideration, and timely submission of medical bill processing data through EDI.  A detailed report of the PBO results is available on the DWC website athttp://www.tdi.texas.gov/wc/pbo/pboresults.html#icrslts.

Effective January 1, 2017, the standard mileage reimbursement rate for Alabama was decreased to 53.5 cents per mile.

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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.

Last month we reported that Travis County District Court Judge Stephen Yelenosky would hear the appeal of the State Office of Administrative Hearings’ (SOAH) decision in the lead group of air ambulance fee disputes between various workers’ compensation carriers and PHI Air Medical.  SLS’s own James Loughlin represents many of the insurers involved in this ground-breaking litigation.  

On December 15, 2016, Judge Yelenosky agreed with SOAH that the Airline Deregulation Act (ADA) does not preempt Texas workers’ compensation laws that govern the amount of reimbursement paid to air ambulance providers for transporting injured workers.  The judge also ruled that air ambulances are entitled to reimbursement of no amount greater than 125% of the Medicare fee schedule, which reversed the SOAH judge’s ruling that those companies could be reimbursed at 149% of the Medicare rate.  

PHI Air is expected to appeal Judge Yelenosky’s decision and the fee disputes at the DWC level have been abated pending the final outcome of this litigation.

On December 1, 2016, the United States Department of Justice (DOJ) announced the unsealing of an indictment returned in November of this year against founders and investors of Forest Park Medical Center (FPMC) in Dallas. FPMC was a chain of five high-end, doctor-owned hospitals in North Texas.  FPMC declared bankruptcy and its facilities were sold off earlier in 2016.

The indictment stemmed from a massive conspiracy involving $40 million dollars in bribes and kickbacks paid by FPMC in exchange for patient referrals over the four years between 2009 and 2013.  The victims named in the indictment included the Federal Employee Compensation Act, TRICARE, Medicare, Medicaid, Federal Employees Health Benefits Program, UnitedHealthcare, Aetna, and Cigna.

In the indictment, it is alleged that FPMC paid bribes to the defendants in exchange for referrals of patients who primarily were insured with high-reimbursing, out-of-network private insurance benefits or benefits under the federally-funded programs listed above.  By obtaining referrals of those patients, FPMC was able to essentially set its own fees and bill at much higher reimbursement rates than those allowed to network providers.  At the same time, however, FPMC attempted to sell patients with lower-reimbursing insurance coverage (Medicare and Medicaid beneficiaries) to other facilities in exchange for cash.  As a result of the bribes, kickbacks and billing practices, FPMC allegedly billed their patients’ insurance plans and programs over half-a-billion dollars and collected over $200 million dollars in paid claims.

Among the 21 people indicted were executives at the hospital, spine surgeons, bariatric surgeons, a pain management doctor, a West Texas chiropractor, a workers’ compensation pre-authorization specialist and a workers’ compensation lawyer.   Some of the physicians indicted were treating doctors in the Texas worker’s compensation system.  

In addition to the charges related to the payment and receipt of kickbacks, the five principal owners of FPMC were also indicted on money laundering charges.  All of the defendants face federal prison time, fines, potential forfeiture of property and restitution if found guilty of the charges stemming from this indictment.

Per Beltran v. Structural Steel Fabricators (2016) Cal. Wrk. Comp. P.D. LEXIS [citation pending], parties may resolve Supplemental Job Displacement Benefits ("SJDB vouchers") regardless of whether a date of injury occurred before, on, or after 1/1/2013.  In order to resolve the SJDB voucher for dates of injury on or after 1/1/2013, there must be at least one serious and good-faith issue, which, if resolved against the injured worker, would defeat all of the injured worker's rights to compensation benefits, including any SJDB voucher.

On December 15, 2016, a decision following trial in New Jersey was handed down on the question of whether medical marijuana can be ordered under workers’ compensation.  Petitioner Andrew Watson worked for 84 Lumber and was injured on November 6, 2008.  He received an award of one third of partial total in 2012 apportioned 50% of the hand and 12.5% for complex regional pain syndrome (CRPS).  The terms of the settlement required respondent to approve ongoing pain management treatment with Dr. Peter Corda.  Petitioner received prescriptions on a monthly basis, including 120 Endocet/Oxycodone tablets as well as other pain medications such as Ibuprofen 800mg and lidocaine patches.

In late 2013 petitioner consulted with Dr. Corda about participating in New Jersey’s medicinal marijuana program (MMP).  Dr. Corda referred petitioner to his partner, Dr. Jeffrey Drew Polcer, who possessed the required credentials to do medical marijuana evaluations.  Petitioner saw Dr. Polcer and complained of burning pain and swelling in his left hand with extreme sensitivity to light touch.  He said that his narcotic medications were not providing him with sufficient relief.  Petitioner admitted to Dr. Polcer that he had experimented with marijuana and obtained a significant reduction in pain.

Dr. Polcer diagnosed petitioner with neuropathic and complex regional pain syndrome of the left hand and recommended petitioner for medicinal marijuana.  He noted that neuropathic pain is one of the better indications for medicinal marijuana.  He further said that if successful with medicinal marijuana, petitioner should lower his use of narcotics.

The New Jersey Department of Health issued an Attending Physician Statement to the Petitioner which authorized petitioner to register for the MMP and purchase one ounce of marijuana per month for three consecutive months. Petitioner received his Patient Registration Card and then used the card to purchase medicinal marijuana at authorized dispensaries, making his first purchase on March 28, 2014.  Petitioner submitted the invoices and proof of cash payments to the respondent’s carrier for reimbursement, but the carrier denied reimbursement.

Petitioner filed an Emergent Motion to Enforce the terms of the Order Approving Settlement from 2012.  The respondent disputed Dr. Corda’s referral to his partner and contended Dr. Polcer was not an authorized physician.  Respondent also withdrew authorization of Dr. Corda in favor of Dr. Morris Antebi, who was asked to perform an IME of petitioner.

The Judge of Compensation, the Honorable Ingrid L. French, A.S.J.W.C., preliminarily entered an order requiring respondent to reinstate authorization of Dr. Peter Corda for pain management.  Trial then ensued on the central issue regarding medical marijuana as curative treatment.

Drs. Corda and Polcer refused to testify at trial because they had ongoing business relationships with the respondent’s third party administrator. Instead, petitioner offered the testimony of Dr.  Edward Tobe, Board Certified in Neurology and Psychiatry.  Respondent had petitioner examined by Dr. Morris Antebi, whose report supported the position of respondent.  However, Dr. Antebi also refused to testify and therefore his report was excluded from evidence.  Respondent tried to offer into evidence three explanatory letters written by Dr. Corda to the third party administrator in response to a request for explanation on his initial referral and Dr. Polcer’s recommendations. These three letters were written subsequent to Dr. Corda’s initial referral to Dr. Polcer for the MMP and tended to undercut Dr. Corda’s initial position in the case, but the trial judge would not allow these reports to go into evidence without Dr. Corda’s testimony, which he refused to provide.

Dr. Tobe testified that Dr. Polcer’s plan to begin a course of medicinal marijuana was medically appropriate.  He added that this plan made particular sense since it would lead to a reduction in the use of opiates. Dr. Tobe discussed the risks in using Percocet (oxycodone) in respect to kidney and liver function.  He said narcotics impact alertness, concentration, memory, and cognitive function, potentially causing emotional detachment.  In addition, possible side effects are loss of teeth, blurred vision, constipation, urinary retention and cardiac problems.

Concerning medical marijuana, Dr. Tobe said that the medicinal version is not tainted with contaminants that street marijuana might contain.  He said that one is less likely to have cravings with the medicinal product.  He did not agree that medicinal marijuana is a gateway drug, although he did admit that marijuana can have similar side effects as opiates in respect to withdrawal, impaired concentration and loss of memory. In his view, medicinal marijuana offers promising prospects as a pain management modality.

Based primarily on the testimony of Dr. Tobe, Judge French found that petitioner’s trial use of medical marijuana was medically warranted.  She concluded, “While the Court is sensitive to the controversy surrounding the medicinal use of marijuana, whether or not it should be prescribed for a patient in a state where it is legal to prescribe it, is a medical decision that is within the boundaries of the laws in the State of New Jersey.  In this case, there is no dispute that all of the credible evidence presented confirms that this Petitioner is an appropriate candidate for New Jersey’s medical marijuana program.”

An equally significant aspect of this case had to do with respondent’s challenge to the referral by Dr. Corda to Dr. Polcer.  The judge focused on the issue of whether a respondent has a right to object to a referral from the authorized doctor to another physician.  “Whether it is a second opinion directed by a Respondent/Carrier or a referral to an alternative specialty directed by an authorized doctor, this Court interprets the statutory language as requiring an analysis that focuses on whether the referral is in the best interest of the injured worker.”

The Court acknowledged that Dr. Corda failed to discuss his recommendation of Dr. Polcer with the respondent/carrier or obtain pre-approval for the referral.  “Medical experts must be given sufficient latitude in directing the care of an injured worker.  Here, the Court will not allow the respondent to deny authorization of a treatment, which has now proven to be beneficial to the Petitioner, simply because the doctor did not allow the Respondent an opportunity to second guess his medical opinion.” 

The Judge entered an order requiring respondent to pay for the costs of the medical marijuana program and prescriptions and ordered respondent to authorize either Dr. Corda (who since became licensed to participate in the MMP) or Dr. Polcer for petitioner’s ongoing participation in New Jersey’s MMP.

This case is not binding on other courts because it is a Division level decision.  Nonetheless, this decision will be studied by other judges and practitioners given that there are few trial decisions in New Jersey on the use of medicinal marijuana for workers’ compensation treatment.  Respondent could not prevail in this case because defense counsel never offered any expert testimony to rebut the opinions of Dr. Tobe.  The failure to produce expert testimony put respondent at an impossible disadvantage and all but guaranteed that Dr. Tobe’s testimony would carry the day on the issue of the reasonableness and necessity of medical marijuana.  Based on the evidence presented, the Judge of Compensation made the only decision she could make.  The most compelling evidence in favor of petitioner was that the use of medical marijuana would decrease the use of narcotics.

This case is also extremely useful in dealing with an often litigated issue of whether respondent is bound by a referral from the authorized doctor to another physician.  The 2012 court order in this case only referred to treatment by Dr. Corda.  Interestingly, the Court did not focus on the basic rule of agency, namely that a principal is bound by the actions of his or her agent.  Rather, the Court addressed the rule in Benson v. Coca Cola to the effect that the Court can make a retroactive analysis of the alleged “unauthorized treatment” to determine whether the treatment should be ordered.  The rule under Benson is that if the treatment proves helpful, that fact would strongly favor a conclusion that respondent must pay for it.  In this case, the only evidence presented at trial (Dr. Tobe’s testimony) supported petitioner’s position that medical marijuana helped relieve petitioner’s pain levels.

Practitioners who are interested in this case can email the undersigned for a copy of the opinion.

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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. 

There are a number of misconceptions about the rules on independent medical examinations.  Several provisions in the New Jersey Workers’ Compensation Act are helpful in clarifying these misconceptions:

§  Misconception One: An employer must set up an IME in the county where the employee resides.  Section 19 states that an IME may be arranged at any reasonable location within the state.  There is no limitation to the employee’s county of residence.

§  Misconception Two: An employee may have his lawyer present during the examination. Section 19 states than an employee only has the right to have his or her personal physician present.

§  Misconception Three: An employee may apply for mileage for travel to an IME. There is no statute or rule in New Jersey which requires that employers pay mileage for IMEs, even to those who travel from out of state back to New Jersey.

§  Misconception Four: An employee cannot object to an IME performed by a physician of the opposite sex. Section 68 states that where a physical examination is taking place, an employee may request an exam by a physician of the same sex. If such a request is made, the statute says that the employer “shall” comply.

§  Misconception Five: An employer is limited to only one IME during the case. Section 19 states that an employee may be required to attend an examination “as often as may be reasonably requested.”

§  Misconception Six: An employee is entitled to one missed IME before benefits are stopped. Section 19 states that during the period that the employee refuses to participate in attending examinations, the employer can terminate all workers’ compensation benefits.

§  Misconception Seven: An employer can make a voluntary offer within 26 weeks of MMI or return to work but the percentage of the offer must correspond to the estimate of the defense IME. Case law makes clear that an employer is not required to limit the bona fide or voluntary offer to the same percentage as respondent’s IME.  In fact, there is no requirement at all that an IME be done for an employer to make a voluntary offer of partial permanent disability.

§  Misconception Eight: After an IME, the physician must provide a copy of the report to the injured worker. The rules of the New Jersey Medical Society make clear that there is a difference between a patient and an examinee.  An independent medical examination occurs when there is no expectation of treatment and therefore no doctor/patient relationship. In that case, the injured worker is an examinee, not a patient, and has no right to a copy of the report that the defense IME expert prepares for the employer or carrier.  The report is the property of the employer/carrier.  During litigation of a formal claim petition, the parties must exchange independent medical exams at the pretrial stage of the case.

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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.

Fitness for duty examinations must meet a standard of being job related and consistent with business necessity.  If the employer does not have enough to meet this standard, the employer may be sued for discrimination under the ADA for improperly requiring a fitness examination.  The employer in Painter v. Illinois Department of Transportation, 2016 U.S. Dist. LEXIS 94940 (D. Ill. July 21, 2016) addressed the issue of meeting the job-related standard by obtaining detailed statements from co-employees supporting the need for a fitness examination.

Deanna Painter was assigned to a position of Office Administrator at Traffic Safety, which was part of a division of the Illinois Department of Transportation (IDOT).  The initial problem concerned an incident involving plaintiff and a co-worker where plaintiff loudly accused the co-worker of prank calling her in the Spring of 2011. Plaintiff was put on administrative leave at that time.  An investigation of this incident led to other employees preparing written statements regarding what they witnessed.  These statements were given to the IDOT fit-for-duty physician, Dr. Fletcher, who then made a decision whether there was a basis for a fitness examination.

Dr. Fletcher read the statements and determined that a fitness exam was needed.  He found plaintiff fit for duty but recommended a reevaluation in 45 days. Around the same time, other employees surfaced and described other incidents involving plaintiff.  Seven more employees wrote statements, describing how the plaintiff would have frequent outbursts and would walk around the office while talking to herself.  Some expressed fears for their own safety. Two or three employees insisted on being escorted by security guards to their cars at the end of the day because they feared that plaintiff would approach them in the parking lot while she was on leave.

Interestingly, plaintiff admitted in her deposition that she had issues with 11 employees in the Traffic Safety area.  The statements from this new group of employees were given to Dr. Fletcher, who again saw plaintiff for a fitness examination but recommended that she see a psychologist, Dr. Karen Lee.  After seeing plaintiff, Dr. Lee decided to take plaintiff as her personal patient, thereby creating a conflict of interest and preventing her from informing the employer of her views.

On September 26, 2011, plaintiff returned to work but in the Day Labor division of IDOT as an office administrator.  Her supervisor noticed that she was making logs of actions of co-employees and conversations with co-employees and reprimanded her for this.  Plaintiff said that she was creating the logs in order to document everything so that she could figure out why she had been placed on leave. Her supervisor pointed out that none of the people in Day Labor had been involved in her situation in Traffic Safety.

Her new co-workers began to complain about plaintiff’s behavior.  Her supervisor also complained that she was sending him emails in the middle of the night that were nonsensical. Plaintiff was again put on administrative leave on November 23, 2011. Two employees prepared statements that said they feared for their safety.  Plaintiff again went for a fitness exam and was again authorized to return to work.  After returning to work, plaintiff sent an email to her union representative stating: “for the record, the clock in the small conference room being set to 4:30 PM when it was only 4:00 PM – that is a tell-tale sign for me.  It told me everything I needed to know. Thanks.”  Plaintiff included a smiley-face emoticon with this email.  The union rep responded that he did not understand the reference and thought the battery was dead. Plaintiff responded, “Something’s dead alright – however, I prefer to be ‘a lady’ and not say what I think is dead.”  This email was treated by IDOT and the Illinois State Police as a threat.

Plaintiff was again placed on administrative leave and sent for a fitness examination.  This time she was found to be psychiatrically unfit for duty as a result of paranoid thinking. Plaintiff’s own psychiatrist disputed this finding.  Plaintiff sued and alleged that she was improperly required to attend fitness examinations.  She later became employed with the Illinois Department of Human Services.

The federal court ruled for the employer stating that there was ample reason to require the fitness examinations:  “The record establishes that prior to each leave and subsequent exam, multiple employees raised concerns about the Plaintiff’s behavior in the workplace.  A number of employees felt unsafe around the Plaintiff. Certain employees did not want to be alone around her and some were afraid to walk to their cars at night.  The Plaintiff shouted at her co-workers, talked in a fast-paced manner and talked to herself at times.  The Plaintiff’s supervisors considered the employees’ statements and their own interactions before determining that Plaintiff was a security risk to the other employees.”

The case is interesting because it shows how careful the employer in this case was in documenting the basis for the fitness examination.  The care which the employer took was clearly warranted, and the result was that the employer easily defeated plaintiff’s ADA law suit.

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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. 

Derrick Dillard injured his back and shoulder in a work-related car accident in March 2011.  He was unable to perform his previous duties as a Street and Drainage Maintenance Senior for the City of Austin, Texas.  He took FMLA leave and then placed in the City Return to Work Program, which was designed to help employees like Dillard find alternative work for a maximum of 180 days in a year.

Dillard exited the Return to Work Program in January 2012. During the entire period he was enrolled in the program, the City was unable to place him in any position because he remained on a “no duty status.”  The City continued to allow him to remain on leave. Between late January and late April 2012, Dillard was released by his doctors to perform “limited duty” or “administrative duty” work.  The City offered him “administrative work” from May through October 2012.

Dillard lacked the three years of clerical or secretarial experience for an administrative assistant position, so the City offered him on-the-job typing and computer training.  Dillard’s supervisor testified that she repeatedly told Dillard to complete more training and showed him how to sign up for more training, but Dillard did not do so.  He was found playing computer games, surfing the internet, sleeping, making personal calls or looking for other positions while he was supposed to be training.  He missed work without proper notice, came late and left early, and lied about his time.  He attended work only 74% of the time over a 21-week period.  The City gave him an unsatisfactory rating.

For his part Dillard admitted that his lack of typing skills made it impossible for him to complete the one assignment he was given.  He asked Human Resources to give him another position.    Meanwhile, Dillard’s doctors were increasing his capacity to perform certain lifting and physical activities.  The City scheduled him for a pre-termination meeting based on his poor performance while on administrative duty.  The Director noted that Dillard was unapologetic for his inappropriate behavior and admitted that comments about his poor performance were accurate. The City fired Dillard on October 26, 2012.

Dillard sued for discrimination under the ADA and argued that the City should have considered him for vacancies across all departments, not just the Public Works Department, once it became obvious that he lacked the skills of an administrative assistant.  The lower court disagreed and noted that the breakdown in the interactive process was caused by Dillard’s failure to make a good faith effort to make the administrative position work.

The Fifth Circuit Court of Appeals held that the City did not fire Dillard because of any disability but because he was frequently late, used work time to play games, and failed to take advantage of training opportunities.  The Court conceded that the City had a duty to make reasonable accommodation and engage in the interactive process. “Dillard’s position neglects that the interactive process is a two-way street; it requires that employer and employee work together, in good faith, to ascertain a reasonable accommodation.”  The Court said that the City made a reasonable accommodation with the administrative assistant position.  “At this point, the ball was in his court; it was up to him to make an honest effort to learn and carry out the duties of his new job with the help of the training the City offered him.”  The Court felt it was pivotal that the City offered him training which Dillard neglected.

The case can be found at Dillard v. City of Austin, Texas, 837 F.3d 557 (5^th Cir. 2016). It is an interesting case because there are so few published cases where the plaintiff is fired while on alternative duty and while performing inadequately during alternative duty.  Clearly the case’s reasoning makes sense:  when an employee’s job performance is grossly sub-par during alternative duty, and where the employee does not take advantage of offered accommodations, the employee has no argument that his termination is a violation of the ADA.

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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.