State News

NWCDN is a network of law firms dedicated to protecting employers in workers’ compensation claims.


NWCDN Members regularly post articles and summary judgements in workers’ compensations law in your state.  


Select a state from the dropdown menu below to scroll through the state specific archives for updates and opinions on various workers’ compensation laws in your state.


Contact information for NWCDN members is also located on the state specific links in the event you have additional questions or your company is seeking a workers’ compensation lawyer in your state.


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On December 2, 2016, Travis County District Court Judge Stephen Yelenosky will hear the appeal of the decision from the State Office of Administrative Hearings (SOAH) in the lead group of air ambulance fee disputes between various workers’ compensation carriers and PHI Air Medical. SOAH Judge Craig Bennett ruled in favor of the carriers in 2015 when he held that the federal Airline Deregulation Act does not preempt Texas workers’ compensation laws that govern the amount of reimbursement paid to air ambulance providers for transporting injured workers. Judge Yelenosky will decide whether that decision is correct. The Division has intervened in support of the carriers’ position on preemption. Judge Yelenosky is retiring at the end of the year so his decision is expected before then.

On December 7, 2016, the United States Court of Appeals for the Fifth Circuit in New Orleans will hear oral argument inAir Evac EMS, Inc. v. State of Texas, Department of Insurance, Division of Workers’ Compensation. Air Evac, another large for-profit air ambulance provider, filed a declaratory judgment lawsuit against the Division based on the SOAH decision in the lead group of fee disputes with PHI Air Medical. The suit was filed in federal district court in Austin, Texas. Air Evac sought a declaration that the ADA preempts Texas workers’ compensation laws that govern the amount of reimbursement paid to air ambulance providers for services provided to injured workers and therefore, the Division must order carriers to pay its unregulated billed charges.

The carriers in the PHI Air Medical case intervened in Air Evac’s lawsuit. The carriers and Division moved to dismiss on the grounds that Air Evac has no right to bring suit in federal court but that even if it did, Air Evac’s lawsuit should still be dismissed to allow the preemption issue to be decided in the state proceedings where that issue was litigated for the last three years. Federal District Court Judge Sam Sparks granted the motions and dismissed Air Evac’s lawsuit. Air Evac appealed the dismissal to the United States Court of Appeals for the Fifth Circuit to determine whether Judge Sparks was correct to dismiss the case. If it rules he was not, the case will go back to Judge Sparks for further proceedings consistent with the court’s ruling. Oral argument is set in the case on December 7, 2016.

There were 643 air ambulance disputes pending at the Division as of October 21, 2016, by far the single largest category of medical fee disputes. Additionally, there are around 130 more cases pending at SOAH. In April, Commissioner Brannan announced that he directed Division staff to abate all air ambulance disputes until the final outcome of the litigation regarding federal preemption. The number of disputes pending at the Division will continue to grow as more disputes are filed at a rate of about 30 per month.

 

H&W Workers' Compensation Defense Newsletter
Vol. 1, Issue 4

Hamberger & Weiss Elects Nicole Graci to Partnership 

We are pleased to announce that Nicole Graci has been elected as a partner in the firm, effective January 1, 2017. Nicole has been practicing workers' compensation defense since 2000. She plays a lead role with the firm's Section 32 settlement team and is a frequent presenter on various aspects of New York Workers' Compensation Law and Medicare Secondary Payer Compliance, including Mandatory Insurer Reporting under the Medicaid and S.C.H.I.P. Extension Act of 2007. 

Since 2011, she has authored the New York section of The Complete Guide to Medicare Secondary Payer Compliance(Jennifer C. Jordan, Editor-in-Chief). In 2015 she also contributed the settlement chapter of theNew York Workers' Compensation Handbook, published by LexisNexis and authored byRonald E. Weiss and Ronald Balter. 

She is a member of the Erie County and New York State Bar Associations, member of the Erie County Bar Association Workers' Compensation Committee, Secretary and Board Member of the Erie County Bar Foundation, Vice President of the Self-Insurers' Association of the Niagara Frontier, and is on the National Workers' Compensation Defense Network's Medicare Compliance Committee.

Nicole is resident in our Buffalo office.

Recent Developments in Loss of Wage Earning Capacity

On 11/3/16, the Appellate Division, Third Department ruled in three decisions that the Board can consider vocational factors in determining the weekly rate of compensation for permanently partially disabled claimants. Prior to this, the Appellate Division consistently held that vocational factors were relevant only with respect to the duration of benefits for a permanently partially disabled claimant and had no bearing on the rate of compensation. The 11/3/16 decisions are a departure from prior decisions regarding the determination of a claimant's weekly compensation rate and clarify that the Board need not base the compensation rate for permanently partially disabled claimants solely on medical impairment. 

Allowing the consideration of vocational factors in setting the rate of compensation for permanently partially disabled claimants is surprising, given that Section 15(5-a), the statutory basis for setting the rate of compensation for both temporary and permanent disability, contains no reference to vocational factors—a point often made by the Appellate Division in its decisions prior to 11/3/16 on this issue.
 
The lead decision on this issue was Rosales v. Eugene J. Felice Landscaping,in which the Court explicitly declined to extend its ruling in Canales v. Pinnacle Foods, LLC, to permanent partial disability claims.Canales concerned a dispute over whether vocational factors could be considered in determining the rate of compensation during a period of temporary disability. Although language inCanales and the subsequently decided Franklin v. New England Motor Freight stated that vocational factors are only relevant in determining the duration of a claimant's permanent partial disability benefits, the Court inRosales decided that vocational factors could be considered in determining the rate of compensation for a permanently partially disabled claimant. In distinguishingCanales, the Court relied on what it called a “key distinction” between temporary and permanent disability: that permanently partially disabled claimants have “no expectation” of returning to their former or similar employment and thus it is “necessary” to consider vocational factors in such cases even though it is not appropriate to do so for temporarily disabled claimants.
 
Any hopes that the Court’s decision in Rosales was an anomaly were dashed by Sarbo v. Tri-Valley Plumbing & Heating in which the Court applied its holding in Rosales to a different fact pattern, making it clear that theRosales rule applies to all permanent partial disability claims.
 
Finally, in Till v. Apex Rehabilitationthe Court held that, for a non-working claimant, "loss of wage earning capacity" is not automatically the inverse of the claimant’s "wage earning capacity." Rather, the claimant’s wage earning capacity is a separate and distinct factual determination from loss of wage earning capacity.

In light of these recent decisions, it is important to remember that vocational factors can affect the rate of compensation as well as the duration of PPD benefits. Thus, employers and carriers should obtain and use vocational evidence such as vocational expert reports in appropriate cases to develop the best defenses on their cases. 

Board Announces New Opioid Weaning Process

The Board has announced a new hearing process for opioid weaning issues. The RFA-2 form has been modified to include a new hearing purpose under the “Medical Issues” section of the form labeled “Opioid Weaning under Non-Acute Pain Guidelines.” To use this section of the form, the Board isrequiring an Independent Medical Examination or records review which states weaning is appropriate and provides a weaning program or resource. There isno requirement for an IME or record review within the regulations or the Medical Treatment Guidelines. The burden is on the attending physician to comply in the first place. In fact, there are some Board Decisions that direct weaning without an IME or record review, or when such a report was already precluded. Nevertheless, we always recommend an IME or record review as they tend to provide appropriate alternatives and weaning plans.
 
Once the employer, carrier, or administrator files the RFA-2 for opioid weaning, the claimant is to obtain a report from his or her prescribing physician, which must be filed by the date of the hearing.  The hearing should be held approximately 45 days after the Board notifies the claimant of your request for a hearing. If the claimant wishes to depose the IME, such transcript must be submitted to the Board before the hearing. If the claimant submits contrary medical, the employer/carrier may request cross-examination of the provider at the hearing.
 
The WCLJ will issue a ruling that either directs weaning, weaningand enrollment in an addiction treatment program or no weaning. The employer/carrier will be required to cover the cost of any addiction treatment program or weaning protocol. If the WCLJ orders enrollment in an addiction treatment program, after 30 days the employer/carrier will only be liable for payment of narcotic prescriptions written by an addiction treatment program physician. The Board has developed a brochure with the cooperation of the NYS Office of Alcoholism and Substance Abuse Services with information regarding addiction treatment services available throughout the State.  
 
Certainly, these are continuing moves in the right direction on this issue.

Court of Appeals Issues Two Decisions in November

The Court of Appeals is the highest court in the State of New York and the Court of last resort in New York Workers' Compensation matters. Decisions from the Court of Appeals on workers' compensation matters are rare as only a few cases each year are accepted by the Court for review.   

In Ace Fire Underwriters Insurance Company v. Special Funds Conservation Committee, the Court ruled that the Special Disability Fund’s written consent to settlement of a third party action settlement must be obtained but if it was not, the carrier has the right to compel Special Funds’ consent via an order nunc pro tunc. 

In Diegelman v. City of Buffalo, the Court ruled that municipalities electing not to provide workers’ compensation coverage for police officers may be sued by officers injured in the line of duty. General Municipal Law (GML) §207-c does not bar such an action.  Presumably the right to sue would also apply to firefighters covered under GML §207-a but not by an employer’s workers’ compensation plan. This decision shows that the General Municipal Law does not provide the same exclusive remedy provisions to employers afforded by the Workers' Compensation Law. 
 

H&W Obtains §114-a Fraud Finding at Appellate Division

In Leising v. Williamsville Central School District,our firm successfully convinced the Appellate Division to reverse a Board finding that the claimant did not commit workers' compensation fraud under WCL §114-a. This case involved a claimant who was working in a seasonal job at a golf course while collecting indemnity payments. Claimant initially disclosed her job at the golf course to the carrier, but then subsequently rescinded the disclosure, stating that it was a mistake and that she was not working. Later, claimant also failed to disclose the employment during a telephone conversation with the carrier’s claims handler when asked if she was working. The claimant inadvertently tipped the carrier off to her job by calling the claims handler from the golf course, causing her employer’s name to show up on the caller ID display. 
 
The WCLJ found a fraud violation and imposed a lifetime disqualification from indemnity awards. Claimant appealed and the Board reversed, inexplicably finding that any misrepresentations by claimant about her work activities were not material for purposes of the fraud statute. Eventually realizing their mistake, the Board then issued a modified decision simply finding insufficient proof that claimant concealed her employment from the carrier. 
 
The Appellate Division reversed under the substantial evidence rule, finding no rational reading of the evidence in the record could support the Board’s finding. This holding by the Appellate Division is notable for two reasons. First, reversals under the substantial evidence rule are rare. The Court almost always defers to factual findings by the Board. Second, the Court is normally bound by the Board’s credibility findings when assessing the weight of witness testimony. However, in this case the court parsed the facts in the record closely, and held that the Board credibility findings were irrelevant, stating that no credibility issue existed on the important points of testimony from the carrier’s main witness. This holding by the Court could arguably be interpreted as stating that no credibility issue exists as a matter of law when the important points of witness testimony are not contradicted and there is no other reason to question the veracity of that testimony. Additional decisions from the Court may be needed to clarify to whether this is what the Court intended. The case now returns to the Board for a modified decision regarding whether the misrepresentations identified in the Court’s decision were material.  

Appellate Division Rules that Federal Lawsuit for Sexual Discrimination, Assault is 3rd Party Action Requiring Carrier's Consent to Settle

Shiner v. SUNY at Buffalo stemmed from an incident in December, 2010, when one of claimant’s supervisors sexually harassed and groped her at an office holiday party. Claimant filed a workers’ compensation claim, and also sued her supervisor and the employer in federal court, alleging a hostile work environment, discrimination, battery, and assault. The workers’ compensation claim was established for post-traumatic stress disorder and a neck injury. Claimant settled her federal lawsuit against the supervisor and employer for $255,000.00, with both the employer and supervisor contributing funds to the settlement.  $65,000.00 of the settlement amount was specifically allocated for “back and front pay.” Claimant did not obtain consent from the carrier before settling the federal lawsuit. 
 
Upon learning of the settlement, the carrier sought disqualification from all future workers’ compensation benefits under WCL §29 based on claimant’s failure to obtain its consent to the federal lawsuit settlement. Claimant argued that the federal lawsuit was not a third-party action within the meaning of the WCL §29, highlighting language in the statute referring to “the negligence or wrong of another not in the same employ.” Claimant also argued that the lawsuit stemmed from intentional actions of a co-worker, and that this took the lawsuit outside of the scope of a third-party action. 
 
The Appellate Division noted that a portion of the claimant’s recovery from the lawsuit was for lost wages. Citing a previous decision from the Court of Appeals, the Appellate Division stated, “[w]henever a recovery is obtained in tort [a specific form of civil lawsuit] for the same injury that was a predicate for the payment of compensation benefits,” it would be unreasonable to bar reimbursement for workers’ compensation payments made by the carrier simply because the claimant recovered money from the pockets of a co-worker or the employer as opposed to from a stranger. An exception to this rule applies where the actions by the co-worker or employer are done in furtherance of the employer’s business, which is clearly not the case for a sexual assault. 
 
The bottom line is that when there is any doubt about whether a claimant’s civil lawsuit falls within the scope of the definition of a third-party action under WCL §29, the claimant acts at his or her peril by settling that lawsuit without first seeking consent of the workers’ compensation carrier.  

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Kenneth Camp worked for 38 years for Bi-Lo, LLC., a grocery store in Tennessee, as a stock clerk.  He worked with two others stocking the grocery with product each night.  In March 2012 the Store Director, Mr. Gilreath, arrived at the store and noted that the three stock-shift clerks had not finished shelving all the product.  He asked why not.  The supervisor, Mr. Bishop, said that Camp had a bad back and the other two workers had to pitch in to help with the heavy stuff.  Bishop also said that “it was hard for them to get done with Camp on restrictions.”

Since a teenager Camp suffered from scoliosis but he had always worked with this medical condition.  Gilreath never knew about the back condition until March 2012. He approached Camp and told him the company was thinking of putting him on light duty.  The HR Director asked Camp if he felt he could do the job.  Camp said, “Yes, I can still do everything.  I know what I can lift and what I can’t, and I can do all the other things except lift the real super heavy items.”

Camp was given a job description which was written in 2007, almost 30 years after Camp began working for the company, which identified lifting requirements, including being able to safely lift over 35 pounds.  The job description also said he had to be able to lift at least 20 pounds constantly and 20-60 pounds frequently. On April 24, 2012 the company advised Camp he would have to take a leave of absence. He was instructed to use his remaining sick leave and vacation days, followed by short-term disability in order to reach his 62nd birthday.  At that point he could retire.

Camp wanted to return to work after his short-term disability ended but the HR Director said he would have to be cleared by his doctor to lift 60 pounds.  Camp’s leave was extended several times but on October 12, 2012, he was advised he would be terminated if he did not provide a fitness for duty form from his doctor.  Camp requested that he be permitted to return to work as he had done for many years with his two co-workers lifting the heaviest items.  The company refused this request and terminated his employment.

Camp sued and argued that the company discriminated against him on the basis of his disability.  He lost at the federal court level and appealed. The issue on appeal came down to whether heavy lifting was an essential job function.  Bi-Lo argued that the 35 pound lifting requirement was an essential job function.  Camp and his two co-workers testified that they had never seen this 2007 job description or any other job description during their long period of employment.  Bishop, who was Camp’s immediate supervisor, testified that “heavy lifting was not an essential function of Camp’s job, and Mr. Camp did his job fine.”  Bishop also said that heavy lifting was only a very small part of the job. The other co-worker said the same thing.  Both co-workers said that the way they worked was Camp would put items on the shelves while the other two men would carry the heavier items so there was no loss of efficiency.  In essence, the two workers made accommodations for Camp’s inability to lift very heavy items.

Given this testimony, the Sixth Circuit Court of Appeals said that a supervisor’s testimony may rebut the written job description regarding what constitutes an essential function.  The Court said, “This is not a case involving a firefighter, nurse, police officer or a military person where the inability to lift the ‘required’ weight could put an innocent person’s life at risk or cause ‘undue hardship’ or even endanger a colleague.” The Court said that summary judgment should not have been granted for the employer in this case because there was enough evidence for a jury to decide that the ability to lift more than 35 pounds is an essential function of the stock-clerk job. The Court further noted that the record showed Camp was meeting all job expectations, and his termination stemmed from only one incident when the crew did not get their work done on time. There was no proof by the company of any other instances where the 35 pound requirement could be shown to explain why there were delays in getting work done. “Bi-Lo has presented no evidence that accommodating Camp’s disability caused undue hardship to his coworkers.”

This case can be found at Camp v. Bi-Lo LLC, 2016 U.S. App. LEXIS 19053 (6th Cir. 2016).   It is a case worth studying.  When it comes to deciding what is an essential job function and what is a reasonable accommodation, this case emphasizes the importance of considering not just the written job description says but what actually happens in the workplace.  It also shows how important it is to speak with supervisors on the job before making termination decisions. Ironically, in this case the plaintiff’s own supervisor turned out to be the key witness against the company.

 

 

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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. 

A number of prominent Medicare experts disseminated Legal Alerts last week to the effect that changes may be occurring with respect to the requirements for CMS to approve zero allocations.  These changes would spell bad news in New Jersey for employers who want to settle disputed cases on a Section 20 basis.  According to Martin Cassavoy of ISO Claims Partners in his October 27, 2016 News Alert, the Workers’ Compensation Review Contractor (WCRC) has stated that CMS will soon require the following for approval of a zero allocation:

  • The case or the body part in question has been denied throughout the case;

  • There has been no medical or indemnity payment for the denied case or body part; and

  • There is either a finding from a hearing by the Judge of Compensation relieving the carrier of liability or a report from the treating physician recommending no future treatment.

    No official enactment of these requirements has occurred to date, but if this is the new approach that CMS is going to adopt, it will be very hard for employers to obtain zero set aside allocations in New Jersey and other states.  Compensation judges in New Jersey have enormous caseloads.  They have not historically been actively involved in ruling on Medicare issues.  If a judge now has to determine that no compensable workers’ compensation claim exists, that will create a long back-up of trials on cases that were formerly resolved simply and efficiently by way of Section 20 settlements.

    Attorney Heather Schwartz Sanderson, Esq., Chief Legal Officer for Franco Signor, LLC.,  wrote in her Alert: “Our recommendation has always been where the workers’ compensation claim is completely denied, no medicals have been paid, and the claim is settling on a compromise basis CMS approval is not recommended.”  Ms. Sanderson’s statement makes sense since Medicare would have been and would continue to be the primary payor in this situation.  Her reasoning is persuasive and should be considered by employers.  She argues that there should be no allocation for future medical care in the above situation.

    Our office will continue to update clients if these changes are adopted by CMS.  Thanks to Marita Tortorelli, Assistant Vice President of PMA Insurance Companies for bringing this issue to the undersigned’s attention.

    ------------------

    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.

One of the most anachronistic aspects of New Jersey workers’ compensation law is that employers pay workers’ compensation benefits even when intoxication is a substantial cause of injury.  In Diaz v. National Retail Transportation, Inc., A-3927-14T2 (App. Div. November 9, 2016), Antonio Diaz was injured moving a heavy lift which fell over on him.  He admitted that prior to work on January 28, 2014, he drank at least two eight-ounce glasses of half whisky and half ice and water.  Respondent’s toxicologist testified at trial that petitioner had a blood alcohol level of at least .173 percent.  Had petitioner been driving, that percentage would have been more than double the legal limit.

Respondent denied the workers’ compensation claim on the basis that petitioner’s intoxication was the cause of the injury based on the expert testimony of respondent’s toxicologist.  Petitioner argued that there was another factor which contributed to the injury, namely a flat tire on the lift.  He said that the lift fell over when it “tilted to one side at the same moment” that he was pulling the lift.  He noted that one of the tires on the lift was flat.

Respondent produced a forensic engineering expert, who testified that “a flat tire didn’t contribute in any way to this accident.” The expert did concede that a flat tire on the lift could have caused the lift to tilt to one side or the other.  The expert conceded that if someone pulled the lift backwards and it had a flat tire, the lift could fall backwards “cockeyed.” The expert said, however, that the lift with a flat tire would tilt only a very small amount, only the one inch that the equipment is off the ground.

Petitioner did not offer expert testimony. Instead, petitioner filed a motion to dismiss the intoxication defense on the basis that under N.J.S.A. 34:15-7, respondent must prove that intoxication is the sole cause in order to defeat a claim.  In this case the Judge of Compensation believed that both the petitioner’s intoxication and the flat tire contributed to the cause.  Therefore the intoxication was not the sole cause, and petitioner prevailed.

Respondent appealed the dismissal of its intoxication defense.  The Appellate Division affirmed the dismissal of the intoxication defense on the grounds that respondent failed to prove that intoxication alone caused the accident.  Even if the flat tire contributed in just a small degree, that was enough to permit petitioner to recover workers’ compensation benefits.

The case underscores the onerous burden that employers must meet in New Jersey to defeat a workers’ compensation claim on the intoxication defense.  In most states, if intoxication is found to be a substantial cause, that is enough to defeat the claim.  In some states, merely a contributory case is enough.  But in New Jersey the legislature requires the employer to prove that there was no other factor which contributed to the happening of the accident.  Sole cause means sole cause, which is why there have only been a couple of reported cases over many decades where the intoxication defense succeeded.

------------------

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.

 

Sioux Falls, SD.— (November 5, 2016) Awards were presented for outstanding contributions to the workers compensation industry at the 5th Annual Comp Laude Awards and Gala,  Saturday, November 5 in Burbank, CA.

“Our mission with this event is to show what is going right with our industry,” said Yvonne Guibert, Marketing Director. “This event was the vision of WorkCompCentral’s founder, the late David DePaolo. He felt our industry gets so much negative press, he wanted to change the story of our industry. So we’ve designed these awards with rigorous judging protocols in place to identify the best of the best.”

The Attorney Comp Laude Award was presented to Michael S. McKnight, of Boyce Law Firm, LLP for his contributions and leadership in the work comp industry.

The Comp Laude Awards, meaning “with honor” were presented to individuals and companies representing many segments of the workers compensation industry, even injured workers. This year, awards were presented in 13 categories.

Top honor awards were presented to two well-known industry veterans. Mark Pew, Prium received the Magna Comp Laude (with great honor) award, and Richard Victor, Sedgwick, received the Summa Comp Laude (with highest honor) award. WorkCompCentral announced that the Summa Comp Laude award will now be called the David J. DePaolo award, in memory of the company’s founder and CEO who passed away earlier this year.

For a complete list of the nominees and Honor Roll Recipients, visit http://bit.ly/2016Nominees

 

Next year’s Comp Laude Awards and Gala event is scheduled for October 30-November 1 in San Diego, CA. Call 805-484-0333 for details.


About WorkCompCentral

Based in Camarillo, Calif., WorkCompCentral produces daily news, continuing education courses and other live events and can be reached at 805-484-0333 and viawww.workcompcentral.com.

WorkCompCentral contact:

Yvonne Guibert, marketing director
805-484-0333, ext. 140
yguibert@workcompcentral.com

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

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

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

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

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

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

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

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

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


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