State News

On May 4, 2016, the Board announced that it has filed a Notice of Appeal to the Court of

Appeals from the decision of the Appellate Division, First Department in American Economy Insurance

Co. et al. v. State of New York, et al, 2016 N.Y. Slip Op. 02924 (First Department 4/14/16). As

reported in our Special Alert of 4/21/16 (below), that decision held that the closure of the Reopened

Case Fund under WCL §25-a as of 1/1/14 was unconstitutional and thus null and void, such that the

§25-a Fund was reopened.

The Board’s appeal effects a stay of the Appellate Division decision, such that the Board will not

adjudicate any claims for transfer of liability to the Reopened Case Fund pending the Court of Appeals

decision.

In its Subject No. 046-851 of yesterday, the Board confirmed that it would accept, but hold in

abeyance, any and all applications for transfer of liability to the §25-a Fund, including Requests for

Further Action (RFA-2s) and requests made on the record at hearings, pending decision from the Court

of Appeals.

The recommendations made in our 4/21/16 Special Alert remain the same. Whether at hearings

or through RFA-2s, you and your counsel should make claims for transfer of liability to the §25-a Fund

on qualifying cases. This will assure that your requests are timely made and can be pursued later in the

event the Court of Appeals affirms the decision of the Appellate Division reopening the §25-a Fund.

Please contact us if you would like to further discuss any of these developments or if we can

assist you in your efforts to transfer qualifying claims to the Reopened Case Fund.

(

April 21, 2016

SPECIAL ALERT: APPELLATE COURT REOPENS

WCL §25-A REOPENED CASE FUND

On April 14, 2016, the Appellate Division, First Department in New York City rendered a

decision in American Economy Ins. Company et al. v. State of New York, ___A.D. 3d ___ (1st Dept.

2016) (Index 156923/13). The Court held that the amendment to WCL §25-a [1-a] enacted as part of the

Business Relief Act of 2013, which closed the WCL §25-a Fund to new claims effective January 1,

2014, was unconstitutional.

ANALYSIS

The Court found that insurance policies issued before October 1, 2013 charged premiums

premised on the assumption that reopened claims may be shifted to the Special Fund for Reopened

Cases under WCL §25-a. For policies issued on or after October 1, 2013, the Department of Financial

Services approved an increase in premiums to cover the additional liability resulting from the closure of

that Fund.

Policies are occurrence based, covering accidents that occur during policy term. A claim for

benefits on a pre-10/1/13 accident made after 1/1/14 would still be covered by the policy in force at the

time of the accident. The premiums paying for that policy assumed that liability for reopened claims

may be shifted to the Reopened Claim Fund under §25-a. The Court agreed that the closure of the §25-a

Fund increased liability on carriers, which they could not recover with increased premiums, creating an

unfunded liability.

The Court held, therefore, that as to carriers with policies issued before 10/1/13, the closure of

the §25-a Fund constituted an illegal retroactive impairment of an existing contractual obligation and

imposition of unfunded liability. Thus, the Statute (WCL §25-a [1-a]) violated the Contracts and Taking

Clauses of the U.S. Constitution.

The lawsuit was brought solely by insurance carriers and the Court’s ruling specifically applied

only to insurance carriers with policies issued before 10/1/13.

Nevertheless, we submit that, in finding the amendment to §25-a[1-a] to be unconstitutional, the

Court rendered the closure of the Fund null and void. Thus, the §25-a Fund is open and we recommend

that insurance carriers and self-insured employers alike apply for §25-a relief on qualifying cases.

We assume that New York State will appeal the Appellate Division, First Department decision to

the Court of Appeals. Decision by the Court of Appeals cannot be expected for many months.

Meanwhile the Appellate Division decision is the law and the §25-a Fund should be considered

reopened.

RECOMMENDATIONS

1. Closed cases: Apply to reopen (RFA-2) and make your claim for §25-a relief on any case that

would qualify (greater than 7 years since D/A and 3 years since last payment of indemnity) citing

American Economy Insurance Company.

2. Cases closed with indemnity only WCL §32 Settlements: Apply to reopen and make your

claim to shift medical liability to the §25-a Fund on qualifying cases, citing American Economy Ins. It

is recommended that on these cases in particular you consult with counsel regarding allocation and other

issues before attempting reopening.

3. Cases in which WCB already found §25-a did not apply because of the supposed closure of

the Fund: Consider applying to reopen the claim, citing American Economy Ins., and seeking

reimbursement from the Reopened Case Fund for payments that should have qualified for §25-a relief.

4. Cases in which you did not seek §25-a relief because of assumption the Fund had been

closed 1/1/14: Consider applying to reopen and seeking reimbursement from the Special Fund.

We remain ready and eager to consult with you and assist you in your efforts to transfer your

liability on qualifying claims to the newly revived Reopened Claim Fund under WCL §25-a.

On 10/5/15, the Centers for Medicare and Medicaid Services (CMS) began implementing a new

process for recovering conditional payments directly from workers’ compensation carriers and selfinsured

employers. CMS is now taking advantage of its ability to recover conditional payments from

primary payers throughout the life of a workers’ compensation claim, not just at times of settlement.

Prior to 10/5/15, the Benefits Coordination and Recovery Center (BCRC) was responsible for

recovering conditional payments from Medicare beneficiaries. Beneficiaries or their representatives

often shared recovery correspondence with primary payers, but the BCRC was not communicating with

primary payers directly in most cases. On 10/5/15 CMS introduced the Commercial Repayment Center

(CRC) which is responsible for recovering conditional payments where the identified debtor is an

insurer or workers’ compensation entity. Recently, the CRC began issuing Conditional Payment Letters

(CPL) and Conditional Payment Notices (CPN) to primary payers. The CRC will send Conditional

Payment Letters and Notices to carriers, Section 111 Responsible Reporting Entities (RREs), Medicare

beneficiaries, Medicare beneficiaries’ attorneys or other representatives. A carrier can also designate a

recovery agent which can be a carrier’s workers’ compensation defense counsel.

Many of our clients have received copies of CPLs or CPNs. At first glance, these letters may

seem daunting, as they contain a myriad of ICD-9 codes and often reference large sums of money.

However, CMS provided a response mechanism along with implementation of the new recovery

process. As a result of the 2012 S.M.A.R.T. Act mandate that CMS develop a formal appeals process

for conditional payment recovery, CMS created a framework for challenging conditional payments. We

recommend taking advantage of that framework in order to minimize conditional payment

reimbursements.

HAMBERGER & WEISS

2

SETTING THEIR SIGHTS :

A BRIEF HISTORY OF CONDITIONAL PAYMENT RECOVERY

A conditional payment occurs when Medicare pays a bill for medical treatment which is the

liability of a primary payer. Workers’ compensation is primary to Medicare; therefore, workers’

compensation insurance carriers and self-insured employers are primary payers. Conditional payments

can only be made when a claimant is a Medicare beneficiary. The Medicare Secondary Payer (MSP)

laws allow CMS to recover conditional payments from primary payers.

Historically, conditional payment research was performed when settling a workers’

compensation claim with a claimant who was also a Medicare beneficiary. CMS essentially limited its

recovery efforts to settlements, despite the fact that the MSP laws always allowed for recovery of

conditional payments at any time. In 2009 Medicare, Medicaid, and SCHIP Extension Act

(M.M.S.E.A.) reporting began, requiring primary payers to report the existence of Medicare

beneficiaries on their rolls.1 Medicare was particularly interested in learning of situations where the

primary payer had an ongoing responsibility for medical (ORM). The new conditional payment recovery

process is a direct outgrowth of M.M.S.E.A. reporting.

The S.M.A.R.T. Act was enacted in 2012. One of the provisions of the S.M.A.R.T. Act required

establishment of a formal appeals process for conditional payments. That formal appeals process was

put into place in October 2015. Prior to formalizing the process, the BCRC and its predecessors sought

recovery of conditional payments from Medicare beneficiaries directly.2 As a result, primary payers

were often unaware of the existence of conditional payments until settlement, and even then often relied

on claimants’ attorneys to provide BCRC correspondence which had been received by claimants. The

BCRC did not communicate directly with carriers. When defense counsel researched conditional

payments by contacting the BCRC, we often received responses that incorrectly identified us as

claimants’ attorneys.

Once a primary payer became aware of a conditional payment reimbursement request, the

process to challenge it was somewhat ambiguous. The BCRC did not and still does not have any

obligation to establish causation, nor is it required to provide any medical records or bills in support of a

recovery claim. In addition, it was not and is not obliged to demonstrate primary payer liability for a

claim. Therefore, there could be a conditional payment recovery effort on a disputed workers’

compensation claim. Defenses were certainly available, but there was no formal mechanism for

advancing them. Often, a time consuming process ensued whereby medical authorizations were obtained

from claimants, medical records subpoenaed from providers, and arguments made on issues of causal

relationship, duplicate payments, etc. In the interim, the BCRC would continue to add to the conditional

payment tallies.

1 Section 111 of the Medicare, Medicaid, and SCHIP Extension Act of 2007 (MMSEA) added mandatory reporting

requirements with respect to Medicare beneficiaries who have coverage under group health plan (GHP) arrangements as

well as for Medicare beneficiaries who receive settlements, judgments, awards or other payment from liability insurance

(including self-insurance), no-fault insurance, or workers’ compensation, collectively referred to as Non-Group Health Plan

(NGHP) or NGHP insurance. Note: Section 111 of the Medicare, Medicaid, and SCHIP Extension Act of 2007 is sometimes

referred to as “Section 111”. https://www.cms.gov/Medicare/Coordination-of-Benefits-and-Recovery/Mandatory-Insurer-

Reporting-For-Non-Group-Health-Plans/Overview.html

2 Recent predecessors of the BCRC include the Coordination of Benefits Recovery Contractor (COBC) and the Medicare

Secondary Payer Recovery Contractor (MSPRC)

HAMBERGER & WEISS

3

BULLSEYE – DIRECT RECOVERY FROM CARRIERS & SELF-INSURED EMPLOYERS

The formalization of the conditional payment recovery process in 2015 marked the dawn of a

new era in conditional payment recovery. Perhaps the most significant change is the creation of the

Commercial Repayment Center which focuses its efforts on recovering conditional payments directly

from primary payers, rather than Medicare beneficiaries. The CRC is responsible for seeking recovery

from applicable plans which are identified as Non-Group Health Plans (NGHP), self-insured employers,

No Fault and Workers’ Compensation carriers. The CRC communicates directly with workers’

compensation carriers, defense counsel and agents. A multistep recovery process with 30, 60 and 120

day response deadlines has been implemented, as well as a formal appeal mechanism with specific

permissible and excluded defenses.

Now that a formal process is in place, we recommend that primary payers involve their defense

counsel or agents in the recovery process early on, as early intervention will ultimately reduce the

amount of conditional payments, representing a significant savings for carriers and self-insured

employers.

WHAT TO WATCH FOR – THE NEW RECOVERY PROCESS

Currently, CMS learns that a Medicare beneficiary has a workers’ compensation claim either as a

result of the primary payer reporting the claim through mandatory insurance reporting, or by the

beneficiary’s self-report. Either the MMSEA report or the self-report results in conditional payment

research and a Conditional Payment Letter or Conditional Payment Notice to the primary payer advising

of the results of that research.

If the primary payer reports the claim under mandatory insurance reporting, the CRC will

research whether conditional payments were made from the date of the reported incident to the current

date or date of termination of ORM and issue a Conditional Payment Notice to the primary payer. If the

claimant self-reports, the CRC will perform the same research, but issue a Conditional Payment Letter.

Unfortunately, where the primary payer reports under mandatory insurance reporting and the beneficiary

self-reports on the same workers’ compensation claim, two files are created. This can prove confusing,

as each file will be identified with a different Case Control Number, and the primary payer is

responsible for responding to the file created in response to the mandatory insurance report, rather than

the file created in response to the beneficiary’s self-report.

Challenging a Conditional Payment Letter early on can prove beneficial. Conditional Payment

Letters do not have any deadlines for response, but we recommend responding as soon as possible after

receiving the letter. CMS actually encourages primary payers to advise if there is no ORM or if causal

relationship will be disputed. If CMS agrees with the challenge, subsequent conditional payment

amounts can be reduced. Primary payers can also be proactive and inquire as to the existence of

conditional payments if they have not yet received communication from the BCRC or CRC. Therefore,

we recommend researching conditional payments early and responding to Conditional Payment Letters

promptly so as to mitigate future conditional payment notices and demands.

HAMBERGER & WEISS

4

Unlike the Conditional Payment Letter, the Conditional Payment Notice requires a response

within 30 days. If no response is received the recipient is presumed to be identified as the debtor, and

CRC will automatically issue a Conditional Payment Demand within 30 days of the date on the CPN.

Once again, the initial response to the Conditional Payment Notice could challenge causal relationship

or advise that there is no ORM. The majority of challenges we pursued thus far have been on the basis

of causal relationship. The CRC tends to include expenses for treatment of numerous conditions that are

unrelated to the workers’ compensation claim. We find that it is receptive to arguments on causal

relationship and will issue subsequent correspondence reducing the amount of conditional payments.

Once an Initial Determination is made by the recovery contractor, a Conditional Payment

Demand is issued. The primary payer may pay the demand or appeal it.3 In some instances, a portion of

the demand can be paid, while another portion is appealed. If the CRC agreed with challenges to a

Conditional Payment Letter or those received within 30 days of the Conditional Payment Notice, the

successfully challenged conditional payments will not appear in the demand. However, the demand may

include new conditional payments Medicare made after the CPL or CPN was issued.4 If paying the

demand, or the undisputed portion of the demand, payment must be made within 60 days of the date of

the demand letter. Unpaid portions of the demand will be referred to the Department of the Treasury and

interest will accrue.

If the primary payer chooses to appeal the demand, the appeal must be filed within 120 days of

receipt of the Conditional Payment Demand.5 Receipt is presumed to be within five calendar days of the

date on the demand letter, absent evidence to the contrary. If the primary payer appeals the demand,

there will not be a referral to the Department of the Treasury while the appeal is being processed, but

interest will accrue. Therefore, we recommend that the primary payer pay the portion of the demand that

it agrees with pending the outcome of an appeal, so as to avoid interest on that portion. Should the

primary payer elect to pay the full amount of the demand pending appeal, a refund of the disputed

portion of the demand will be issued to the primary payer if the appeal is successful.

Appeals must be written. Only the primary payer is a party to the appeal, meaning the Medicare

beneficiary does not have appeal rights. Permissible defenses include causal relationship and that the

alleged debt should not exist. Other defenses are specifically excluded. For example, the primary payer

cannot argue that it already paid a requested charge to a beneficiary or another party. A primary payer

cannot assert a waiver of recovery which is an option only available to Medicare beneficiaries.

Applicable plans cannot argue for a pro-rata reduction of recovery based upon attorney fees.

3 There is no appeal process for demand letters issued before 4/28/15. If a primary payer wishes to dispute a demand that

pre-dates 4/28/15, it will deal directly with the CMS contractor which issued the demand.

4 CRC’s conditional payment research is ongoing until CMS Is made aware that ORM is terminated. The S.M.A.R.T. Act

provides a three year statute of limitations on recovery of conditional payments, meaning that CMS has three years from

the date it is notified of a settlement, judgment, award or other payment to seek recovery. However, medical providers

have one calendar year from a date of service to bill Medicare. There are several exceptions to the one year time limit

including retroactive Medicare entitlement which is often the case with claimants who are awarded Social Security

Disability benefits.

5 Conditional Payment Demand Letters issued from 4/28/15 forward can be appealed. CPDs dated prior to 4/28/15 are not

subject to the formal appeals process, but can be responded to and challenged through correspondence with the issuing

entity.

HAMBERGER & WEISS

5

The appeal process has several levels. The first step, Redetermination, is decided by the recovery

contractor who issued the Initial Determination. Following Redetermination, the process is taken out of

the hands of the original contractor and addressed for Reconsideration by a CMS Qualified Independent

Contractor. Following Reconsideration, a dissatisfied party may request a hearing before an

Administrative Law Judge.6 If the Administrative Law Judge’s decision is unsatisfactory, a party may

request review by the Medicare Appeals Council. Finally, if the Medicare Appeals Council does not

issue a decision, dismissal or remand to the Administrative Law Judge within a specified period of time,

the appellant can request escalation to Federal District Court. However, a dismissal by an Administrative

Law Judge cannot be escalated.

PROTECT YOURSELF - DEFENSE RECOMMENDATIONS

The best way to resolve conditional payments in primary payers’ favor is to be proactive.

Identifying Medicare beneficiaries who are also workers’ compensation claimants early in the claims

process and researching conditional payments well before settlement can significantly mitigate liability

throughout the life of a claim and at the time of settlement. In addition, there are certain situations, such

as WAMO settlements and disputed claims, where the savvy claims handler can identify the risk of

outstanding conditional payments and reduce liability by researching and disputing conditional

payments.

Once conditional payments are identified, early responses to Conditional Payment Letters and

Conditional Payment Notices are effective ways to limit conditional payments throughout the life of a

workers’ compensation claim. Theoretically, the sooner that the BCRC is aware of the existence of a

primary payer, the less likely it is that Medicare will continue to make conditional payments on a claim.

There are various ways to respond to the BCRC and CRC. CMS established internet access through the

Medicare Secondary Payer Recovery Portal (MSPRP) and a limited CRC portal both of which we can

access. Written responses are also accepted and have proven expeditious thus far. The primary payer, its

defense counsel, or agent can research conditional payments, respond to CPLs and CPNs and appeal

demands. As attorneys for carriers and self-insured employers, we have been researching conditional

payments and responding to the BCRC and CRC for our clients using both the MSPRP and written

responses with success.

We look forward to assisting you in researching conditional payments and responding to BCRC

and CRC recovery efforts. Please feel free to contact us with any questions on conditional payment

recovery generally or for legal assistance on a case by case basis. Attorney Nicole Graci can be reached

at (716) 852-5200 x301 or ngraci@hwcomp.com.

Ever since the decision in Dever v. New Jersey Mfrs. Ins. Co., No. A-3102-11T2, (App. Div. Oct. 23, 2013), plaintiffs’ counsel have been arguing that respondents do not have a lien for medical bills paid in workers’ compensation from a work-related car accident where the plaintiff had PIP coverage.  But civil courts have not been following Dever, and workers’ compensation carriers won another big decision on this issue in Talmadge v. Burn, No. A-3160-14T1 (App. Div. June 22, 2016).

Tina Talmadge was injured while working for Child and Family Services, Inc.  She was driving her own car when her vehicle was struck by a car driven by Ms. Burn.  Plaintiff underwent a cervical fusion procedure, and The Hartford Insurance Company (workers’ compensation carrier) paid $127,000 in medical and indemnity benefits.  The Hartford sought reimbursement of two thirds or approximately $84,500 and intervened in the civil case from which plaintiff recovered $250,000 as damages.   Plaintiff conceded that she owed two thirds of the indemnity benefits but argued that The Hartford had no right to a lien on medical benefits because as a no-fault insured, she herself could not recover medical benefits from the other no-fault insured Burns.  She contended that if she could not make a recovery of medicals in her law suit, The Hartford could not either as its rights are derivative of her own rights.

Both the trial judge and the Appellate Division rejected plaintiff’s arguments. The Appellate Division initially observed, “When an employee suffers an automobile accident while in the course of employment, workers’ compensation is the primary source of satisfaction of the employee’s medical bills, as provided by the collateral source rule, N.J.S.A. 39:6A-6, which ‘relieves the PIP carrier from the obligation of making payments for expenses incurred by the insured which are covered by workers’ compensation benefits.'” 

The Court went on to discuss how the PIP statute interacts with the workers’ compensation statute.  “In instances where an employee, as a result of a work related automobile accident injury, also has a claim for recovery against a third party, the Legislature overcame the possible ‘inequity of double recovery’ by including section 40, which requires an injured employee to refund paid workers’ compensation benefits once recovery is obtained from the tortfeasor, thereby avoiding duplication of the workers’ compensation benefits by the tort recovery.”

The Appellate Division concluded, “The employer’s workers’ compensation carrier’s lien, which includes medical expenses paid, must be satisfied from plaintiff’s $250,000 recovery from Burn.”  It did not matter that plaintiff could not recover the medicals from the other party in her law suit.  The Court made clear that this was still a double recovery.  In this practitioner’s opinion, the Appellate Division got it right in Talmadge.Dever is an outlier case because the workers’ compensation carrier was not even a party to that decision.  The dispute in that case involved the UIM carrier, and the comments in Dever regarding the workers’ compensation lien were what is known as “dicta,” the expression of an opinion that went beyond the facts before the court.

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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. 

 Each year thousands of Granite State workers are injured on the job. Many of these injuries are minor and the worker loses no time from work and requires little to no medical attention. A  small portion of the reported injuries are more severe, and workers miss time from work and require extensive medical treatment to return to their pre-injury status. The New Hampshire Department of Labor releases a biennial report that contains information regarding the number and types of injuries, the industries in which the injuries occur, and the number of cases litigated before the Department every year.[1]

The most recently published biennial report found that the majority of injured workers sustain minor ailments that do not result in lost time from work. In fiscal year 2013, there were 38,998 reported workplace injuries and 644,000 non-agricultural employees in New Hampshire, resulting in an incident rate of 6.1%. Lost time from injuries occurred in 3,530 cases: less than 10% of all injuries.

The causes of injuries in New Hampshire are diverse. Greater than 10 percent of the injuries in fiscal year 2013 were the result of an object hitting an employee (4,101), while nearly 19 percent were the result of an employee lifting an object (7,359). The most common injury type involved a muscle pull or strain which accounted for 13,926 of the 38,998 injuries, or approximately 36% of all injuries. Bruises, cuts, or puncture wounds accounted for another 37% of the reported injuries (14,591).

The biennial report also provides a breakdown of the industries that account for the majority of workplace injuries. While nearly a third of reported injuries (13,156) were not classified by industry, the remaining two thirds (25,842) were. Health Care and Social Assistance resulted in the most reported injuries, tallying 5,013 out of 25,842, or approximately 19% of classified injuries. Motor Vehicle and Parts Dealers came next with approximately 12% (3,086) of all reported injuries. Accommodation and Food Services, Educational Services, and Metal Manufacturing separately accounted for approximately 7% of all reported injuries, with 1,893, 1,755, and 2,022 injuries reported respectively. These five industries account for more than half of all classified injuries in the state.

Looking at these numbers, it is clear that New Hampshire is a safe state in which to work, with only slightly more than 6% of employees injured each year and less than 10% of all injuries resulting in lost time from work. It should come as no surprise that a large percentage of all injuries result from employment in Health Care and Social Assistance or Motor Vehicle and Parts Dealers since these industries employ thousands of people in New Hampshire and require substantial amounts of physical work.

Of the thousands of incidents that result in injuries to Granite State workers, only approximately 5% result in litigation before the New Hampshire Department of Labor. When litigating a case, injured employees and insurance carriers or employers are usually represented by counsel.

[1] http://www.nh.gov/labor/documents/biennial-report-2012-2013.pdf

 Earlier this year the New Hampshire Supreme Court published its decision in the matter of Appeal of Raymond Cover. The result of the decision is that part-time employees injured at work have a right to reinstatement under New Hampshire law (RSA 281-A:25-a).

The Court dealt with the validity of New Hampshire Administrative Rule, Lab 504.05 (b) (3) and whether part-time employees are entitled to reinstatement under the Workers’ Compensation Act. The statute, RSA 281-A:25-a, states “[a]n employee of an employer who employs 5 or more employees, who has sustained an injury, shall be reinstated by the employer to the employee’s former position of employment upon request for such reinstatement… .”  At the time of this litigation, Lab 504.05 (b) (3) stated, “[a]n employer shall not be obligated to provide the former position to… a part time employee as defined by the employer’s personnel policy.” The Court found that “the rule impermissibly modifies the statute and is therefore invalid.” The Court reiterated its longstanding edict that the Workers’ Compensation Law should be read “liberally to give the broadest reasonable effect to its remedial purpose and resolve all reasonable doubts in favor of the injured worker.” Since RSA 281-A:25-a does not specifically exclude part-time employees from the right to reinstatement, while Lab 504.05 (b) (3) does, the Court stated that “the rule cannot be characterized as a rule that merely fills in the details to effectuate the purpose of the statute.” 

Acknowledging the likelihood of the Court deciding in this fashion, the Department of Labor had already began the process of altering Lab 504.05 (b) (3) earlier this year. The rule now omits the language quoted above and provides for reinstatement to any full time or part time employee (though temporary employees are still exempt and some other qualifications apply).

The Court also went into some detail in dismissing a jurisdictional argument. The employer argued that the only way to challenge the validity of the Department of Labor rule was through a Declaratory Judgment action brought in Superior Court with the Department of Labor as an opposing party.

Raymond Cover had challenged the validity of Lab 504.05(6)(3) before the Department of Labor Hearing Officer initially and the Compensation Appeals Board on appeal.  RSA 541-A:24 provides that parties “may” challenge a Department of Labor administrative rule at the Superior Court via a Declaratory Judgment action, including the Department of Labor as a party. The employer argued “that the word ‘may’… is meant to express a right … to challenge a rule’s validity [and] if that right is exercised, then the action must be filed” in Superior Court and include as a party the agency that adopted the rule. The Court disagreed. The Court focused on the definition of the word “may” to mean “permissive, not mandatory” and cited three prior cases in which the Court had reviewed the validity of agency rules under similar circumstances. The Court found that it could exercise subject matter jurisdiction over Mr. Cover’s appeal. 

Employers should know that all full-time and part-time employees are likely eligible for reinstatement to their job within 18 months of a compensable workplace injury. Some qualifications still apply, and your labor and employment or workers’ compensation attorney can likely provide helpful counsel on this issue.

 In Appeal of Northridge Environmental, LLC, the New Hampshire Supreme Court held that home care services provided to the injured worker by his non-medically trained spouse qualify as a compensable medical expense under New Hampshire’s workers’ compensation law.

In Northridge, the claimant sustained serious injuries at work.  After his release from the hospital he required constant care that included cleaning of his wounds and assistance with moving, bathing, and dressing, all of which was provided by his spouse. The claimant sought payment for his spouse’s services from his workers’ compensation carrier, under the theory that but for his spouse’s care he would have needed to hire a medical professional to perform the home care.

The New Hampshire Department of Labor initially denied reimbursement for the spouse’s home care services and the Compensation Appeals Board (CAB) upheld the decision. After an initial appeal to the New Hampshire Supreme Court, the case was remanded to the CAB with instructions to revisit the issue and determine whether, and to what extent, the services provided by the claimant’s wife were reimbursable. On remand, the CAB determined that the claimant was entitled to reimbursement for the services his spouse provided, noting that RSA 281-A:2, XII-b of the workers’ compensation statute “does not exclude a spouse as a home health care provider and should include a spouse as a home health care provider because the workers[‘] compensation statute is a remedial statute and a spouse is not excluded as a provider.” Appeal of Northridge, Case No.: 2014-0776, March 22, 2016, 2. The Court affirmed the decision of the CAB and stated that “the CAB did not err when it decided that the petitioner was entitled to reimbursement for his wife’s services.” Id., 5.

The workers’ compensation carrier also had objected to the CAB’s finding concerning the amount of reimbursement to be provided to the claimant for the services rendered by his wife. After the initial appeal and remand to the CAB, the CAB determined that the claimant should be reimbursed at the rate of $15 an hour, 12 hours a day for the care provided by his wife. The carrier argued there were no time cards or other records available, and that the CAB should not have determined that “twelve hours per day, every day” is “an appropriate reimbursement rate in this instance.” Id., 6. The Court held that it could not “conclude that the CAB erred when it determined that reimbursement for 12 hours per day was reasonable.” Id., 6.

The Court also considered whether the claimant’s attorney was entitled to attorney’s fees. The Court determined the claimant’s attorney had “prevailed” under the definition in RSA 281-A:44, I as the attorney had obtained a remand from the Supreme Court and obtained relief at the remand CAB hearing. Although it “did not award benefits to the petitioner in the earlier appeal, [its] prior decision was an essential step in the process that eventually led to the CAB awarding reimbursement.” Id., 9. As such, the Court determined that the petitioner was entitled to reasonable attorney’s fees and costs incurred in the earlier appeal to the Court.

 This ruling potentially exposes employers, carriers, and third party administrators to liability for reimbursement for care provided by the spouses and other non-medically trained individuals who provide care to an injured worker. In Northridge, the carrier had offered to pay for a licensed healthcare provider to perform the in-home services which were prescribed.  The claimant declined the offer. If the injured employee requires medically necessary homecare and foregoes a visiting nurse or other medical professional, this case supports the argument that the statute does not preclude reimbursement for a spouse or other non-medically trained individual who provides that care. Furthermore, nothing in the decision appears to limit this holding to a spouse. 

The Court’s second consideration – that the claimant’s attorney was due reasonable fees and costs for an earlier appeal when prevailing at the remand hearing – also exposes employers, carriers, and third party administrators to potential liability for payment of attorney’s fees. Claimants’ attorneys will undoubtedly request their fees be paid by carriers for their time before the Supreme Court when they obtain a remand from the Supreme Court that results in a favorable decision before the CAB.

 Bill 1084 went into effect on July 1, 2016.　 This legislation abrogates the holding inWheeler, and sets forth the applicable law as it relates to aggregate wages for an employee when calculating an employee’s average weekly wage.　 While we suggest reading the entirety of Bill 1084 and, of course, calling us for any questions you may have, keep the following in mind:

To be prudent, you should ask an injured employee if they are employed in any other position and ask that they provide wage information to support the same and note your file accordingly.

 If you have any questions relating to calculating the comp rate, what needs to be included, or general questions on South Dakota law, please contact Charlie Larson atcalarson@boycelaw.com or 605-336-2424. 　

The maximum rate changed on July 1, 2016 to $762 a week.  The minimum work comp rate has increased to $381 a week. 

If you have any questions on work comp rates or general questions, please feel free to contact Charlie Larson atcalarson@boycelaw.com or 605-336-2424.   

Beginning July 1, 2016, the maximum worker’s compensation payable was raised to $832 per week and the minimum was raised to $229 per week. This change was based on the Commissioner of Labor’s determination that the State’s average weekly wage was $831.88 in the calendar year 2015, and the change is effective for any injury occurring on or after July 1, 2016.

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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.

As you know, Kids’ Chance is a scholarship program for children whose parents have been killed

or seriously injured at work. Donations are tax deductible and we welcome contributions. More

important is that we are looking for eligible scholarship recipients. If you know of an eligible child,

please contact Kids’ Chance in care of Jane Stone, who is on the founding board, at

jstone@slsaustin.com, or call her at 512-343-1300. A big kick-off event is planned for the Fall, too,

and if you or your company are interested in being a sponsor (with appropriate attribution), please

let us know. The deadline for sponsorships is fast approaching.