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MISSOURI WORKERS’ COMPENSATION CASE LAW UPDATE

January 2016 – March 2016

Temporary Employer Found Responsible for Temporary Employee’s Fall on Customer’s Property since Customer Owned and Controlled Parking Lot and Temporary Employer and Customer Found to be Joint Employers

 Anhalt v. Penmac Personnel Services, Inc., Injury No. 09-006127

 The claimant worked for Reckitt-Benckiser (RB), through Penmac, the employer, as a field associate.  On January 30, 2009, the claimant finished her shift and was walking across the parking lot owned and controlled by RB to her vehicle when she slipped on a patch of ice and fell, landing on her outstretched right hand.  She was diagnosed with a right distal radius fracture and an ulnar styloid fracture with displacement.  Dr. Goodman performed a closed reduction of the right distal radius fracture.

 The claimant filed a Claim against Penmac only.  At a hearing, the ALJ denied the Claim because she was walking across a parking lot after work when she was injured.  The ALJ reasoned that the extension of premises doctrine did not apply because Penmac did not own or control the property, and RB was not named as an employer in the claim.

 On appeal, the Commission reversed the ALJ’s Award. The Commission noted that the claimant was working as a field associate performing temporary or seasonal services for RB. Penmac and RB jointly developed a training/orientation program for the field associates working at RB. Penmac administered the orientation program before the field associates went to work at RB. The temporary employees would have to check in at the guard station before proceeding to the plant. Also there was a separate time clock installed on RB’s premises for the temporary employees. While working at RB, the temporary employees reported to a supervisor employed by Penmac but employees of RB had authority to direct work of the temporary employees if they saw them doing something unsafe. 

 The Commission noted the claimant’s work involved performing services under the simultaneous direction and control of both Penmac and its client RB. The Commission determined that Penmac and RB were joint employers of the claimant. The Commission noted that joint employment occurs when a single employee under contract with two employers and under simultaneous control of both performs services for both employers and the services provided are the same or closely related to that of the other. The Commission was convinced that the claimant was in the joint service of both Penmac and RB when she was injured since both shared the simultaneous right to direct and control the manner and means of her services.  The Commission further noted that both Penmac and RB enjoyed a benefit from the claimant’s service. Therefore, the liability of Penmac and RB was joint and several. Since RB owned and controlled the parking lot as a joint employer, the claimant could file a Claim against Penmac, and the Claim was compensable.

Claimant’s Injuries Not Compensable Because No Evidence Her Employment Exposed Her to Greater Risk of Injury Than in Her Normal Non-Employment Life

Jensen-Price v. Encompass Medical Group and Treasurer of Missouri as Custodian of Second Injury Fund, Injury No. 10-066736

 The claimant left work for the day and brought her laptop with her in order to continue working from home.  She left the office and took the hallway to the public elevator.  When the elevator door opened, a housekeeping cart bumped into her, causing her to fall and sustain multiple injuries.  The employer rented space in the building from the landlord, and the elevators were accessed using a hallway outside of the space the employer rented.  The lease gave the landlord exclusive control over common areas, including the hallway and elevators.  The employer had no rights with regard to the elevators.

 At a hearing, the ALJ found that the claimant’s injuries were not compensable, because the hallway and elevator were common areas that were not owned or controlled by the employer. 

On appeal, the Commission stated that the ALJ applied the wrong test.  It found that because the claimant was carrying her laptop for the purpose of working from home, she was essentially engaged in going from one worksite to another and was therefore performing a work activity for her employer at the time of the accident and had not ended her work shift.  The Commission held the issue was whether the claimant’s employment exposed her to a greater risk of injury than her normal non-employment life.  The Commission found that the record was too vague to determine that the claimant’s employment exposed her to an increased risk of injury, and because of that, it affirmed the ALJ’s decision to deny benefits.

Injury Sustained During a Return to Work Evaluation for a Non-Work Related Condition Arose Out of and in the Course and Scope of Employment and Found Compensable

Sanders v. Rollet Brothers Trucking Company, Injury No. 13-077155

The claimant had a heart condition since 1999.  He was off work from September 17, 2013 to October 1, 2013 after undergoing a non work related heart surgery.  When he was released to return to work, he was directed to the Work STEPS program for a physical evaluation, as there was a mandatory policy that any employee who missed more than 3 days of work had to complete the program before returning to work.  The employer scheduled the appointment and paid for the claimant to attend the program.  During the program on October 1, 2013, the claimant was lifting weighted boxes when he felt something snap in his back and experienced immediate lower back pain.  He was seen by a physician under worker’s compensation, at which time he was diagnosed with a lumbar sprain/strain with sciatica and underwent an injection.  He continued to follow up and undergo physical therapy for about a month, after which he was informed he would have to use his personal health insurance for further treatment.  In December 2013, the employer requested that he turn in his uniform, and he assumed his employment had ended.

 The claimant filed a Claim for Compensation and sought additional treatment for his back injury.  The employer argued that the claimant was not being paid wages or reimbursed for travel for attending the program and he was not employed on his date of injury, because the program was a condition he had to meet before returning to employment.  The ALJ disagreed and held the injury arose out of and in the course of employment because the claimant was required to attend the program or else he would be terminated and the employer scheduled and paid for the program.  Moreover, the claimant was not equally exposed to the risk of injury outside of his employment, because he only participated in it in order to remain employed.  Therefore, the injury was compensable.

On appeal, the Commission affirmed the ALJ’s Award, finding that the statute does not require the employee to be “on the clock” or receiving compensation at the time a work injury occurs, and therefore, the claimant’s injury was compensable.

Truck Driver Awarded PTD for Back Injury Sustained When He Tripped on a Fuel Hose

Price v. BMS Transportation Company, Inc. and Treasurer of Missouri as Custodian of Second Injury Fund, Injury No. 12-096454

On August 7, 2012, the claimant, a truck driver, was driving on assignment when he stopped to fuel up the truck.  While the truck was still fueling, he climbed out of the cab, stepped on the fuel hose, and fell to the ground, at which time he sustained a back injury.  He had no prior history of back pain, injuries, or surgeries.

The claimant was diagnosed with a large herniated disc at L4-5.  His authorized treating physician Dr. Meredith opined that a spinal fusion surgery would typically be the only course of treatment, which only had a 50/50 chance of improving his symptoms.  However, Dr. Meredith noted the claimant was not a good candidate for surgical intervention since he had lived a physically strenuous life, and he was not interested in surgical intervention anyway.  Dr. Koprivica agreed that the claimant had continued back pain but was not a good candidate for back surgery.  Dr. Koprivica also felt he was PTD as a result of his work injury alone.  Vocational expert Mr. Dreiling found that the claimant was unemployable.

The ALJ found that the claimant was at MMI from the date Dr. Meredith determined he was not a surgical candidate.  The ALJ also held that the claimant was PTD from the August 7, 2012 work injury alone and awarded PTD benefits from the employer.  On appeal, the Commission affirmed the ALJ’s Award.

Employer Responsible for PTD Benefits After Head Injury, Despite Pre-existing Cavernous Malformation which Caused Headaches and Left Sided Numbness Since 2000

Schroer v. City of Fulton and Treasurer of Missouri as Custodian of Second Injury Fund, Injury No. 09-068337

The claimant worked as a Senior Construction Inspector, and on September 1, 2009, he was climbing out of a manhole after inspecting it when he slipped and hit the back of his head.  He reported he saw stars but did not lose consciousness.  While driving away from the scene of his accident, he became sick and his left side went numb.  The claimant’s treating physician Dr. Scher diagnosed the claimant with post concussive/posttraumatic syndrome and a history of pontine cavernous malformation and found the claimant PTD due to his primary injury alone.  The claimant admitted his pre-existing cavernous malformation caused headaches and left sided numbness beginning in 2000 and he did miss some work because of it, although it did not otherwise affect his ability to work prior to his work injury.  After his work injury, he testified he was not able to work due to headaches, migraines, left sided numbness, double vision, and memory problems.

Dr. Shuter, the claimant’s expert, found the claimant PTD as a result of his work injury and assessed 10% PPD to the body referable to the claimant’s pre-existing cavernous malformation.  The claimant’s psychiatric expert, Dr. Daniel, diagnosed an anxiety disorder, cognitive disorder, post-concussive disorder, traumatic brain injury, and pontine cavernous malformation.  Dr. Daniel causally related the claimant’s condition to his work accident and found him PTD due to the combination of the psychological and physical disabilities resulting from his work injury.  Mr. Weimholt performed a vocational evaluation on behalf of the claimant and concluded he was not employable due to his work accident.

The employer’s expert Dr. Selhorst performed an IME and found the claimant’s complaints most consistent with PTSD.  Dr. Stillings performed a psychiatric IME on behalf of the employer and opined the claimant’s work accident was not the prevailing cause of any neuropsychiatric disorder, as the claimant had a pre-existing personality disorder, and assessed no traumatic brain injury or post-concussive syndrome. 

At a hearing, the ALJ found the expert opinions of Dr. Shuter, Dr. Daniel, Dr. Scher, and Mr. Weimholt more credible and persuasive on the issue of PTD.  Therefore, the ALJ found the claimant PTD based on the primary work injury alone and ordered the employer/insurer to pay future medical care.  On appeal, the Commission affirmed the ALJ’s award. 

Claimant’s Death Not Compensable because His Work was not the Prevailing Factor in Causing His Heart Attack

White v. ConAgra Packaged Foods, LLC, Injury No. 12-048291

The claimant worked as a machinist before he died on June 30, 2012 while at work.  His autopsy showed severe coronary artery disease, and his Certificate of Death listed his cause of death as acute myocardial infarction and heart failure.  His surviving spouse filed for death benefits under workers’ compensation.

Testimony established that the claimant operated a lathe in a machine shop on the day of his death and the weather was extremely hot.  The machine shop was being cooled by opening the doors/windows and running a pedestal fan.  It also established that the claimant was wearing a brace for a foot injury on his date of death and he typically worked 12 hours/day, 6 days/week.  The autopsy revealed a 75-80% blockage of his left arteries.

The claimant’s expert Dr. Schuman testified that the claimant’s work was the prevailing factor in causing his death, because the extreme heat combined with the claimant’s physically demanding work duties and leg brace placed added stress on his already strained heart.  He testified that although the claimant performed his normal job duties and was already at risk of cardiac arrest, his heart had to work extra hard that day due to work conditions.

The employer’s expert Dr. Farrar testified that the claimant died from ventricular fibrillation caused by myocardial ischemia which was caused by his coronary artery disease and other heart conditions.  He opined the claimant’s sudden death was not related to his work activities, although he admitted that pain from a prior injury and heat can cause stress that can trigger a cardiac event.

At a hearing, the ALJ found that the claimant’s surviving spouse failed to sustain her burden of proof that the claimant sustained an accident or occupational disease.  The ALJ found that the claimant’s underlying heart conditions caused his death, which was supported by both experts’ testimony as well the autopsy report.  Therefore, the claim was not compensable.

The claimant appealed, and the Commission affirmed the ALJ’s Award with a supplemental opinion.  It found there was no persuasive expert testimony on the issue of medical causation, and ruled that the claimant’s work was not the prevailing factor in causing his heart attack or death.  Therefore, the ALJ’s decision denying death benefits was affirmed.

Commission Reverses ALJ’s Opinion that Employer’s Expert is Most Credible

Wright v. TG Missouri Corporation, Injury No. 10-074011

On July 6, 2010, the claimant was pushing a 1000 pound mold on a cart when it slammed into a machine and he felt a sharp pain in his low back that radiated into his right buttock.  He initially treated with Dr. Kapp, who diagnosed left sciatica with left lower lumbar pain and radicular symptoms.  The claimant was then seen by Dr. Chabot in February 2012, who diagnosed a back strain, released him at MMI, and assessed no PPD as a result of the work accident and opined no additional treatment was needed.

 Two months later, the claimant demanded additional treatment, which was denied.  He then began treating on his own for lower back, neck, and bilateral leg complaints, right greater than left.  Dr. Fonn performed low back surgery in September 2012 and released him from care in March 2013.

In August 2013, Dr. Poetz diagnosed pre-existing lumbar degenerative disc disease, disc herniations at L3-4 and L4-5 with annular tears, foraminal stenosis, radiculopathy, and exacerbation of lumbar degenerative disc disease for which the claimant’s work accident on July 6, 2010 was the prevailing factor.  Dr. Poetz assessed 5% PPD due to his pre-existing condition and 45% of the body due to the claimant’s work accident.  Dr. Chabot issued an addendum to his February 2012 opinion, in which he opined that any complaints after February 2012 were not related to the claimant’s work accident.

The ALJ found Dr. Chabot’s opinion credible and noted that the claimant’s symptoms were distinctly different on February 10, 2012 than they were when he requested additional treatment in May 2012.  The ALJ noted that on February 10, 2012, the complaints were primarily to the low back, left buttock, and left proximal leg, with no mention of right leg complaints.  Three months later, the claimant complained of back pain radiating into both legs, right greater than left with constant aching and tingling in his bilateral legs.  The ALJ found that the claimant failed to prove medical causation for any treatment he received after February 12, 2012.  However, the ALJ awarded 10% PPD of the body as a whole referable to the claimant’s lower back as a result of his work injury.

The claimant appealed to the Commission, which disagreed with the ALJ with respect to the persuasiveness of each party’s medical expert and found that Dr. Poetz’s medical opinion was more persuasive.  The Commission believed the ALJ focused too much on variations in the claimant’s symptoms over time.  It found the claimant’s testimony regarding his complaints to be credible and found that his complaints in May 2012 and onward were medically causally related to his July 6, 2010 work accident.  Therefore, the Commission found the employer was responsible for the claimant’s past medical treatment, any future medical treatment, TTD, and 30% PPD to his low back.

Video Surveillance not Admissible at Hearing Since Employer did not Comply with Continuing Request for Production

Burlison v. Department of Public Safety and Treasurer of Missouri as Custodian of Second Injury Fund,Case Nos. SD33809 & 33816 Consolidated (Mo. App. 2016)

FACTS:  The claimant sustained a work-related injury to her shoulder when a patient grabbed and twisted her arm.  At a hearing, the claimant was found to be PTD as a result of the RSD in her arm.  At the hearing, the employer/insurer attempted to submit into evidence video surveillance which was taken of the claimant, but the ALJ refused to consider it in light of the fact that the video surveillance footage was never provided to the claimant’s attorney.  The claimant’s attorney had previously sent a Notice of Deposition to the employer’s superintendent, which included a request for statements and any video taken of the claimant.  The employer/insurer did not have any video at the time of the request and argued it did not have to produce the video since it was not received until after the request had been made.  The ALJ disagreed and stated the claimant’s attorney can request surveillance pursuant to a Civil Rule despite the fact that the workers’ compensation statute does not apply to videos.  In this case, the claimant’s attorney did not forward a Subpoena Duces Tecum to the superintendent, which is required by the Civil Rule, but the superintendent voluntarily appeared for the deposition, and therefore had a duty to produce any videos.  While the superintendent may not have had the video at the time of the deposition, the ALJ found there is a continuing duty to produce the video, so once the employer obtained the video, they were required to provide the claimant’s attorney the same.  The Commission affirmed the ALJ’s decision.

HOLDING:  On Appeal, the court found that the rules of procedure governing civil depositions also apply to worker’s compensation depositions, and the employer had a duty to supplement the deposition testimony and supply the video.  Since it failed to forward the surveillance video to the claimant’s attorney before the hearing, it violated the rules of discovery, and the surveillance video was correctly excluded from the hearing.

Fund Liable for PTD Benefits After Claimant Injured His Right Knee, Even Though the Treating Doctor did Not Explicitly Find the Claimant PTD

Majors v. Treasurer of Missouri as Custodian of Second Injury Fund, Injury No. 12-023216

The claimant stepped off a street sweeper truck onto a cobblestone curb while working on March 29, 2012, at which time his foot slipped into a hole and he sustained an injury to his right knee.  Dr. Stechschulte performed a partial meniscectomy, patellofemoral chondroplasty, and arthroscopic debridement of a partial thickness ACL tear.  The claimant settled his claim against the employer for 38.5% PPD of the right knee with future medical left open.

The claimant also had significant prior injuries to his left knee, including surgery to repair MCL and ACL tears in 1973 and a total knee replacement in 2002.  Dr. Stuckmeyer examined the claimant at his attorney’s request and assessed 60% PPD of the right knee due to the primary injury and 50% PPD of the left knee due to prior injuries/surgeries and recommended right total knee replacement.  The doctor opined the combined disability due to the claimant’s left and right knee injuries was greater than the simple sum, assigned a 15% multiplicity factor, and recommended a vocational assessment to determine the claimant’s employability.  The claimant then underwent a vocational evaluation with Mr. Cordray, who opined the claimant was not employable due to the combination of his primary injury and his pre-existing left knee condition.

The ALJ noted that although Mr. Cordray opined that the claimant was unemployable, he was not a doctor, and Dr. Stuckmeyer did not explicitly find the claimant to be PTD.  The ALJ held that he could not award PTD since Statute requires physician certification of PTD in order to award PTD benefits.  Therefore, the ALJ awarded PPD benefits from the Fund by finding 50% PPD to the right knee as a result of the primary injury and a 15% multiplicity factor.

The Commission found Mr. Cordray’s opinion persuasive and reasoned that Statute does not require specific language to certify a claimant as PTD by using the phrase “permanent total disability” as long as the doctor otherwise confirms the extent of the claimant’s diagnoses, medical conditions, and restrictions.  Here, Dr. Stuckmeyer diagnosed the claimant, identified permanent restrictions, and recommended a vocational evaluation, which amounted to a certification of the claimant’s PTD status.  The Commission found the claimant PTD as a result of the primary injury combined with the effects of his prior medical conditions, and the Fund was therefore liable for PTD benefits.

 PTD Denied as Claimant did not Present Evidence as to Why She Stopped Working

 Robertson v. Second Injury Fund, Injury No. 09-071549

On September 17, 2009, the claimant slipped in water and experienced a jarring/twisting motion to her low back.  She was diagnosed with a low back strain and left knee contusion.  She also had an extensive history of 6 prior lower back surgeries between 2005 and 2009 for degenerative disk disease.  In August 2010, the claimant complained of back pain and reported she was losing feeling from her fall at work and believed the hardware from her previous surgery had come loose.  Dr. deGrange performed an IME at the employer’s request and diagnosed a lumbar strain that had resolved.  He opined her current back pain was due to failed back surgery syndrome from her 6 prior back surgeries, rather than to her work accident, and placed her at MMI.  However, the claimant continued to treat, and in 2012, Dr. Abernathie performed hardware removal at L3-S1, before placing her at MMI with permanent restrictions. The claimant returned to work full duty for a few weeks before quitting.

Dr. Margolis performed an IME at the claimant’s attorney’s request and assessed 70% PPD referable to her low back, 40% of which was preexisting and 30% of which he attributed to her work accident.  She settled with her employer for 17.5% PPD referable to her low back.

The ALJ agreed with Dr. deGrange that the work accident was not the prevailing cause of the claimant’s condition and resulting disability.  The ALJ also found the Fund was not responsible for PTD benefits due to her extensive preexisting and deteriorating back condition, the fact that she continued working almost 3 years after the accident, the lack of any objective evidence of a physical change following the work accident, and the claimant’s lack of credibility as a historian.

The claimant appealed, and the Commission reversed the ALJ’s decision.  It credited her testimony that she experienced a permanent increase in her pain after the work accident and found Dr. Margolis’ IME reasonable.  However, the Commission found she was not PTD, because it was unclear why she stopped working.  Therefore, the Commission found the work accident was the prevailing factor in causing a low back strain and awarded 10% PPD to the body from the Fund, due to her significant preexisting condition and prior surgeries.

Fund Responsible for PTD Benefits Due to Combination of Pre-Existing Physical and Psychological Conditions and Work Injury

Valentine v. Treasurer of Missouri as Custodian of Second Injury Fund, Injury No. 06-013126

On February 23, 2006, the 67-year old claimant fell 6 feet off a ladder and injured his right ankle/foot.  He was diagnosed with a right foot intra-articular calcaneus fracture and underwent subtalar arthrodesis followed by 2 additional surgeries for non-unions.  He sought psychiatric help for depression and was given medication.  The claimant also had pre-existing injuries, including a right rotator cuff tear and tendinitis, bilateral shoulder pain, and DJD in his bilateral knees.  With respect to his pre-existing psychological condition, he was previously diagnosed with dysfunctional family origin, poly-substance abuse and dependency, pain disorder, and personality disorder.  He was placed at MMI in February 2008, by which time he had retired, and in February 2015, he settled with his employer for 50% PPD of the right ankle and 11.5% PPD to the body referable to his psychological condition.

Dr. Volarich examined the claimant at his request and assessed 65% PPD of the right foot/ankle referable to his work injury as well as 25% of the right shoulder, 15% of the left shoulder, and 30% of each knee due to pre-existing conditions.  The doctor opined he was PTD due to a combination of his primary and pre-existing conditions, age, and limited education.  Dr. Stillings examined the claimant for psychiatric disorders at his request and assessed a primary psychiatric injury of 45% PPD of the body referable to mood, pain, and anxiety disorders.  He agreed the claimant was PTD, due to his primary and pre-existing psychiatric conditions.  Mr. England and Ms. Blaine also found the claimant PTD and unemployable.

At a hearing against the Fund, the ALJ found the expert opinions of Dr. Volarich, Dr. Stillings, Mr. England, and Ms. Blaine persuasive.  Therefore, the ALJ found the claimant was PTD due to a combination of his primary injury and pre-existing conditions, and the Fund was liable.  On appeal, the Commission affirmed the ALJ’s decision.

Claim for Benefits Denied after Claimant Failed to Appear at Trial

Stovall v. Convergys and Treasurer of Missouri as Custodian of Second Injury Fund, Injury No. 11-022817

The claimant injured her right lower extremity while working for the employer on February 27, 2011.  She requested additional treatment but never provided medical evidence substantiating her request.  Her case was set for trial on three occasions but continued at the claimant’s request to give her time to obtain additional evidence.

The case was set for trial on August 20, 2015, and a final notice was sent by certified mail.  Attorneys for the claimant, employer, and Fund appeared for trial at 9:30 a.m.  However, as of 11:15 a.m., the claimant had still not appeared for trial, although she was in touch when her attorney multiple times during the morning and claimed to be on her way to the Division.  The claimant’s attorney requested a delay, to which the employer objected.  The ALJ concluded the trial and awarded a default judgment denying any benefits and finding that the claimant failed to establish a compensable injury by failing to appear for scheduled hearings or present substantiating evidence.  The claimant appealed, and the Commission affirmed the ALJ’s decision.

Claimant’s PTD Benefits Commutated to a Lump Sum to Avoid Undue Financial Hardship to the Claimant

Thomas v. Forsyth Care Center and Missouri Nursing Home Insurance Trust, Case No. SD34151 (Mo. App. 2016)

FACTS:  The claimant was awarded a Temporary Award on December 10, 2007.  The employer failed to comply with the Temporary Award.  The claimant was unable to obtain treatment, and her condition worsened.  At a final hearing, the ALJ determined she was PTD, and the Commission and Court of Appeals affirmed.  The claimant then filed a Motion for Commutation of her PTD benefits, arguing that she has been required to pre-pay for her treatment and prescriptions and then wait almost a month for reimbursement from the employer, which was an undue hardship on her fixed income.  The Commission found the employer had a well documented history of disregarding the ALJ’s Temporary Award and found that the unusual circumstances presented by the claimant called for payment of her anticipated benefits in a lump sum.  The employer appealed.

HOLDING:  On appeal, the court relied on the Commission’s findings of fact and credibility determinations to find that the employer repeatedly made it difficult for the claimant to receive treatment and reimbursement for medical costs.  Therefore, the court found there were unusual circumstances which justified commutation of the PTD benefits, and the Commission’s Award was affirmed.

Until Death Do Us Part – Divorce and HIPAA Violations: A Lesson in Safeguarding Protected Health Information  

By Mitchell J. Rhein, Spilman Thomas & Battle, PLLC

The Office of Civil Rights (“OCR”), a division of the Department of Health and Human Services, recently took the rare step of imposing civil monetary penalties against a large home health provider for violating the Health Insurance Portability and Accountability Act (“HIPAA”), highlighting the importance of developing written policies that meet the realities of how and where employees use documents with patients’ personal health information (“PHI”).

HIPAA creates privacy rights and protections for consumers of health services. To ensure these rights are protected, entities that possess and transmit PHI, defined as “covered entities,” are required to safeguard that information. Lincare provides respiratory care, infusion therapy and medical equipment to in-home patients. Because Lincare employees often travelled to patients’ homes, they routinely had to take protected health information into the field to perform their duties. However, Lincare also had a practice of requiring its employees to keep copies of documents containing PHI in their vehicles so that they could access the information if the physical office were destroyed or otherwise made inaccessible. These practices are not, in and of themselves, HIPAA violations. However, Lincare was required to develop and implement policies and procedures, in either written or electronic form, reasonably designed to protect its patients’ PHI while those documents were out of the office.

The problem is this case arose when a Lincare employee kept documents with PHI in her car even though she knew that her husband had keys to the car. The employee and her husband had a falling out. The employee moved out of her home and left her car – and the documents – behind. Months later, the husband reported to Lincare and the OCR that he had the documents. The OCR investigated and found that, while Lincare had a written policy designed to safeguard PHI within its offices, it did not have a policy addressing PHI taken into the field. Accordingly, OCR concluded that Lincare violated HIPAA and imposed a penalty of nearly $240,000.

Lincare contested the penalty to an Administrative Law Judge (“ALJ”), offering the defense that it was a victim of theft. Lincare claimed that the employee’s husband stole the documents and reported them to Lincare and OCR in an attempt to induce his estranged wife to return to him. The ALJ found this to be an ill-conceived defense because, assuming Lincare’s version of the breach were true, it was more damaging to their case. The ALJ noted that HIPAA required Lincare to take reasonable steps to protect PHI from theft and the alleged theft in this case only highlighted the fact that Lincare failed to adopt any policies and procedures to safeguard PHI taken into the field. Accordingly, the ALJ upheld the OCR’s penalty.

For covered entities, this case illustrates the importance of assessing the realities of how and where your employees use PHI. In a perfect world, PHI would never leave the safety of a locked file cabinet. In reality, employees often need to take PHI outside of the safety of the file cabinet or even the office to perform their duties. If a covered entity does not adopt written policies and procedures to address the realities of how and where PHI is being used, they may be risking significant civil penalties.

Mitchell Rhein

Spilman Thomas & Battle, PLLC

304.340.3889

mrhein@spilmanlaw.com

Here are five things you need to know to be prepared to process a CalPERS application for industrial disability retirement (IDR) for safety officers.

1) Is your contract with the Office of Administrative Hearings (OAH) current?

2) Did you know the agency can no longer delegate to an executive officer the final determination?

3) Are your dispute resolutions in current compliance with recent changes to the Government code and judicial determination? If they are older than five years they should be reviewed to ensure current compliance.

4) Did you know that safety officers terminated for cause may not be eligible for an industrial disability retirement where the cause for termination occurs prior to vesting.

5) Did you know that as of January 1, 2003 contacting agencies are required to advance disability pension payments until a decision has been made to approve or disapprove the members application for industrial retirement? Do you know the procedures for recouping pension payments in the event of a denial.

 The California Public Employees’ Retirement System (CalPERS) is responsible for the management of pension and health benefits for over 1.7 million California public employees, former employees, and their families. In recent years, CalPERS Industrial Disability Retirement (IDR) cases have become more frequently litigated as state and local governments have become increasingly diligent in their defense against inappropriate, and even fraudulent, claims of entitlement to IDR.

The standard for proving entitlement to IDR is a higher standard than that applied in workers’ compensation cases. A CalPERS member is eligible for IDR when the member is incapacitated from the performance of duty as a result of industrial disability. Not surprisingly, the exact meaning of this standard is not abundantly clear from the plain language of the statute. However, subsequent case law has shed some light on the courts’ interpretation of Government Code section 21150.

Essentially, in order to prove entitlement to IDR, the applicant bears the burden of showing that the CalPERS member (1) has disability of permanent or extended and uncertain duration based on competent medical opinion, (2) the disability was caused by an injury or disease arising out of and in the course of the member’s employment, and (3) as a result of the disability, the member is substantially unable to perform his or her job duties.

The procedure for litigation of an application for IDR is also quite different than the procedure for litigation of a workers’ compensation claim, though there are some similarities. An application for IDR may be filed by either the CalPERS member or the employer if the employer believes the member to be disabled. Government Code section 21153. The identity of the applicant is important because it is the applicant who bears the burden of proof.

The application must be based upon competent medical opinion in order to serve as the basis for proving eligibility for IDR. Ensuring that the physician providing the medical opinion in connection with the IDR application is familiar with the standard of incapacity under the Government Code is thus an important step in properly administering and defending IDR applications. Oftentimes due to the risk of conflating the workers’ compensation and IDR standards for determining ability to return to work, it is advisable to obtain a separate IDR evaluation to address the question of substantial incapacity.

If there is a question as to the industrial nature of the disability being claimed, the issue of causation must be submitted to the Workers’ Compensation Appeals Board. However, the decision to grant or deny an IDR application is made by CalPERS for miscellaneous members and by the governing body or its delegate for local safety members. Appeals of the determination of eligibility for IDR are then heard by the Office of Administrative Hearings (OAH) or by the governing body with an OAH Administrative Law Judge presiding.

CalPERS contracting agencies are provided with some leeway in determine the exact procedures to utilize in handling disputes over applications for IDR under the Government Code. Periodic review of dispute processes can allow contracting agencies to make sure they are taking advantage of the nuances in procedure under the Government Code. Outside counsel can serve as a valuable resource in the review process and can assist in ensuring compliance with current government statutes and judicial rulings.

Pain management has become a major health issue and cost driver in most state workers’ compensation programs with the proliferation of prescription opiates and consequential addictions arising from workers’ compensation injuries.  One of the central problems that practitioners face in file handling and in court is the absence of any clear standards to decide whether opiates are reasonable and necessary.  The Centers for Disease Control and Prevention (CDC) took a significant step forward on March 18, 2016 with the release of the “CDC Guideline for Prescribing Opioids for Chronic Pain.”

The study is available online and any practitioner of workers’ compensation will find its conclusions to have practical applications to the daily problems employers, third party administrators and carriers have with cases involving prolonged use of opiates.  The focus year for the study was 2012.  In that year alone, family doctors and internists wrote 259 million prescriptions for opioid pain medications.  This number does not include the number of prescriptions that pain medicine specialists and other physicians wrote.  The CDC said it was focusing on family physicians because they tend to write about half of all opioid prescriptions.

The Guideline addresses long-term opioid therapy, which is defined as use of opioids on most days for more than three months. Here are some of the key findings in the Guideline:

Concurrent use of opioids and benzodiazepines might put patients at greater risk for potentially fatal overdose

1. Patients who do not experience clinically meaningful pain relief early in treatment (within one month) are unlikely to experience pain relief with longer-term use

2. No evidence shows a long-term benefit of opioids in pain and function versus no opioids for chronic pain with outcomes examined at least one year later
   These observations are particularly relevant to workers’ compensation practitioners, who know intuitively that it does not make sense to continue to prescribe opiates for patients for many months or years when they do not seem to be improving in function or experiencing a diminution in pain.  Even after prolonged use of opiates, many workers’ compensation patients will complain of a pain level of 10 on a scale of 10.  Such prolonged use of opiates often leaves injured workers with even greater problems from dependency and addiction.  

    

   The authors of the Guideline have provided some valuable advice for physicians:

    

• Clinicians should consider opioid therapy only if expected benefits for both pain and function are anticipated to outweigh risks to the patient

• Consider non-pharmacologic therapies (PT, weight loss for knee osteoarthritis, Cognitive Behavioral Therapy) to alleviate chronic pain

• NSAIDs, acetaminophen, and some antidepressants may be effective for chronic pain

One theme that permeates the Guideline is that physicians should set a benchmark when they prescribe opiates, and that benchmark should be to achieve both improvement in pain as well as improvement in function.  The Guideline also advises that physicians should not start patients on extended-release opioids.  This would seem like common sense but many physicians leap to prescribe extended release opioids like oxycodone, hydrocodone, and morphine before trying shorter acting opioids.  The lowest possible dosage should be the starting dosage – again, a rule that is often violated in workers’ compensation cases.

Workers’ compensation practitioners can now draw on the CDC Guideline in asking physicians for a treatment plan and specific timelines.   The CDC suggests evaluating benefits and harms with patients within one to four weeks after starting opioid therapy for chronic pain.  The authors suggest that physicians should periodically review the patient’s history of controlled substance prescriptions using the PDMP (Prescription Drug Monitoring Program).  New Jersey is one of the states that utilizes the PDMP.  Our office has found any number of cases where a claimant’s name has been run through the PDMP only to discover that the claimant is already getting multiple prescriptions for the same opiate that the pain medicine physician was about to prescribe.

One comment from the lengthy Guideline that should resonate with workers’ compensation practitioners, employers, third party administrators and carriers is this one:

“Regarding duration of use, patients can experience tolerance and loss of effectiveness of opioids over time.  Patients who do not experience clinically meaningful pain relief early in treatment (i.e., within one month) are unlikely to experience pain relief with longer-term use.”   Most pain medicine physicians appreciate the points made in this Guideline but there are many who seem to be ignoring the sensible conclusions contained in this report.

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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.

 Most employers have some recreational or social activities throughout the year, and unfortunately, injuries tend to occur at these events.  There used to be so many of these kinds of claims that the New Jersey Legislature enacted new legislation in 1980 under N.J.S.A. 34:15-7, which provides that recreational and social activities do not arise from the employment “unless such recreational or social activities are a regular incident of employment and produce a benefit to the employer beyond improvement in employee health and morale.”

So under this rule a volunteer firefighter who was injured playing softball for the fire department team was not covered for workers’ compensation because his participation in the softball game was not required and was purely for morale purposes. Dowson v. Borough of Lodi, 200 N.J. Super. 116 (App. Div. 1985), certif. denied. 103 N.J. 455 (1986). Similarly, a supervisor asked one of his employees if he would like to arm wrestle the supervisor, and the two men arm wrestled during work hours with injuries resulting to the employee.  The court also found this case not compensable as a recreational claim involving only morale.  Quinones v. P.C. Richard & Son, 310N.J. Super. 63 (App. Div. 1998), certif. denied. 156 N.J. 384 (1998).

But what about the situation where a teacher engages in a volleyball game with students and parents on school premises and the event has been advertised by the school, asking for volunteers to participate in the event?  These kinds of activities occur at many schools in New Jersey and in other states on a regular basis.  Often the event is an annual one, which tends to satisfy the clause above beinga regular incident of employment.  There are often notices about the event throughout the school and teachers are encouraged to participate.  Suppose a teacher is later injured and brings a workers’ compensation claim, seeking medical treatment, temporary disability benefits and an award of partial permanent disability? The question is this:  does this activity involve a benefit to the employer beyond improvement in health and morale or is it just about morale? 

There are no published decisions on this particular issue but these types of injuries happen frequently.  The main reason for the absence of published decisions is that most practitioners and judges believe these kinds of injuries involving teachers in parent/faculty/student events are compensable.  So the cases tend to be accepted from the outset.  The advertised parent/faculty/student volleyball game on school premises is not just about promoting health and morale.  That is definitely part of it, but counsel for the injured teacher will successfully argue that the activity is really about improving the relationship among parents, students and teachers, with the ultimate goal being a better learning environment.  The goal of education and student enrichment goes well beyond merely promoting health and morale. If the activity promotes a benefit beyond improving health and morale, the activity is compensable.  Raising funds for the employer would be another example of something that is beyond improving health and morale. p

Contrast this with a situation where a teacher steps into the gym to shoot a few baskets on the way to his or her next class with a student he knows and then falls, fracturing an arm.  This sort of activity is spontaneous, unplanned, and more about morale than anything else.  Judges would likely find this sort of injury not compensable.

In 2004 an important decision came down from the New Jersey Supreme Court which added a new dimension to the equation.  That case isLozano v. Frank Deluca Const., 178 N.J. 513 (2004).  Mr. Lozano was seriously injured driving a go-cart on the property of a customer where the company was doing masonry work.  Lozano was a skilled mason who was picked up by his boss in the morning and taken to the homeowner’s large property where they worked all day.   After work the boss asked permission from the homeowner to drive one of the go-carts on his private track.  The homeowner and the boss drove their go-carts around the track.  Then the boss asked the claimant if he wanted to take a spin.  Mr. Lozano reminded his boss that he had no driver’s license and did not know how to drive, so he refused.  The boss then told Lozano to get in the go-cart and drive.  Lozano did just that and proceeded to drive the go-cart into a parked truck, suffering serious injuries. At trial, Lozano said he felt that he had to follow orders from his boss, but he did not want to drive the go-cart in the first place.

The Supreme Court announced a sensible rule that when an employer compels activity that would ordinarily be barred as a social or recreational one, that activity becomes compensable.  TheLozano rule has been followed by courts in many other decisions. What it means for an employer is this:  if the employer pressures employees to attend holiday parties or participate in otherwise barred recreational activities, any injuries flowing from those activities will be found to be compensable in workers’ compensation based on the element of compulsion.  Hence the adage:  if you have to do it, what you are doing is likely compensable under workers’ compensation.

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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.

PARENTAL NIGHTMARE, OR A VIOLENT COURSE AND SCOPE OF EMPLOYMENT PENNSYLVANIA CASE

By

 Kevin L. Connors, Esquire

Does being brutally stabbed by your son at home in the middle of the night while you sleep warrant an award of workers’ compensation benefits?

This is not a trick question. 

It was the critical factual/legal issue in O’Rourke v. WCAB, a decision issued by the Pennsylvania Supreme Court on October 27, 2015.

Not surprisingly, the critical issue was whether the undisputed injury occurred within the course and scope of employment, a necessary prerequisite for any award of workers’ compensation benefits in Pennsylvania.

In reversing the Pennsylvania Commonwealth Court, which had found that the Claimant had sustained her burden of proving that her injury occurred within the course and scope of employment, the Pennsylvania Supreme Court, in a Decision authored by Justice Stevens, ruled that the Claimant was not engaged in the furtherance of the employer’s business interests, when sleeping in her bedroom as she was brutally attacked by her son, such that the Court held that the Claimant’s injuries did not occur within the course and scope of her employment, and were not, therefore, compensable under the Pennsylvania Workers’ Compensation Act.

A ruling clearly predicated on statutory logic, defying deference to tragic circumstances.

In O’Rourke, the Claimant worked for accessAbilities, a state-funded program run by the Pennsylvania Department of Public Welfare. 

Employed by accessAbilities, she was paid hourly to provide attendant care for her 33 year old son, who suffered from a variety of complicated health issues caused by long-term drug use.

Begging the necessary question of how an employer-employee relationship existed, the Supreme Court considered that the employment arrangement was designed as a consumer model of service delivery, with the individual requiring care being the employer, necessitating that workers’ compensation insurance coverage be secured, with the employer, herein, the son in need of care, being responsible for hiring, training, disciplining, and terminating employees.

The state-funded program then acted as a payroll agent for any employees, as well as to meet employer needs if necessary.

In O’Rourke, the employer arrangement initiated when the Claimant’s son had his leg amputated in 2007.  Subsequent to the Claimant’s son undergoing in-patient rehabilitation, arrangements were made for the son to move in with the Claimant, to live more independently, in 2008.

Several weeks later, the Claimant and her son enrolled in accessAbilities, and the Claimant was trained to assist her son with dressing, bathing, wound care, taking medications, preparing meals, and transportation.

The son received funding through the state for 64 hours of care each week, although he never qualified to receive nighttime or 24-hour care.

Since the son was living with the Claimant, he requested that she provide him with care in the evening, if she was awake.  If the Claimant provided any nighttime care, she would log those hours against the next day that she would work.

Typically, she worked 40 hours per week, Monday through Friday, and then 12 hours per day on both Saturday and Sunday.  Her hours were recorded on timesheets through Halo, an online computerized system that allowed her to clock in and out each day.

On April 10, 2009, the Claimant returned home around 10:00 p.m., after a night of BINGO.  

When she came home, her son asked her to make him something to eat, although the Claimant asked if she could first change her clothes.

An argument then ensued between the two, although the Claimant did change her clothes, fed her son, and then went to sleep around 11:30 p.m.

In the early morning hours of April 11, 2009, the Claimant’s son came into the Claimant’s room, jumped on top of her, slashed her throat, and then stabbed her several times with a butcher knife, screaming, less than endearingly, “I’ll kill you, you fucking bitch”.

Anyone recall Oedipus Rex by Sophocles?

Surviving the violent attack, the Claimant then filed a Claim Petition against her son’s insurer, State Workers Insurance Fund (SWIF), alleging that she had sustained a work-related injury, resulting in the specific loss of her left arm, further claiming that she was also suffering from psychological injuries, unrelated to simply being a parent.

She then also filed a Review Petition, seeking medical treatment, as well as claiming that she was suffering from post-traumatic stress disorder (PTSD).

The WCJ bifurcated the litigation, in order to initially determine the course and scope of employment issue.

In support of her petitions, the Claimant testified to the employment arrangement, as well as the gruesome details of the attack causing her injuries.

A coordination specialist witness testified for accessAbilities. 

That testimony clarified that the Claimant’s son, as employer, never qualified for overnight care, as that level of care required a traumatic brain injury.

The accessAbilities witness also testified that the Claimant’s timesheets indicated that she never recorded working late night or early morning hours when caring for her son.

Initially determining that the Claimant’s injuries were compensable, finding that the injuries occurred within the course and scope of employment, the WCJ nevertheless concluded that the Claimant was not actually engaged in the furtherance of the employer’s (her son) business or affairs at the time of her injury, as she was sleeping when attacked, further finding that the Claimant did not routinely provide care to her son, who the WCJ found did not qualify for overnight care, with the WCJ concluding, however, that the Claimant was on the “employer’s premises” when injured, thereby entitling her to workers’ compensation benefits under the Interlocutory Order issued by the WCJ.

In determining that the Claimant’s injuries occurred within the course and scope of her employment, the WCJ also rejected SWIF’s argument that the Claimant’s injuries resulted from “personal animosity”, a defense that negates the compensability of alleged work-related injuries when the injuries occur as a result of reasons personal to the attacker and Claimant under Section 301(c)(1) of the Act.

Subsequent to the initial determination by the WCJ that the Claimant’s injuries occurred within the course and scope of employment, the medical issues were then litigated with the WCJ issuing a Decision awarding compensation benefits to the Claimant for both temporary total disability and specific loss benefits, with the specific loss benefits obviously only being recoverable after exhaustion of the temporary total disability benefits.

Both parties then appealed, with the Claimant contesting some of the Findings of Fact made by the WCJ, and with SWIF appealing the determination that the Claimant’s injuries occurred within the course and scope of her employment.

The Appeal Board then reversed the WCJ’s Decision, holding that the Claimant’s injuries did not occur within the course and scope of her employment as she was neither furthering the employer’s interests, nor did her employment require her to be “on the premises”, at the time of her injury, in reliance upon Slaugenhaupt v. US Steel, 376 A.2d 271 (Pa. Cmwlth. 1977); the seminal “on the premises” course and scope of employment workers’ compensation decision in Pennsylvania.

Effectively, the Appeal Board held that the Claimant was not “required” to “remain on the premises” once she finished her work duties and went to bed, further finding that the Claimant’s “employee status” ended, as she simply became a resident of the house, when she “embarked on a course of ‘recreation separate and distinct from the duties of her employment’.”, when she went to bed.

Appealed to the  Commonwealth Court, the Court reversed the Appeal Board’s Decision, reinstating the WCJ’s award of compensation to the Claimant, in the course of finding that the Claimant was entitled to compensation as she was “practically required” to live on the premises because of her employment.

Ever hear of the “bunkhouse rule”, cited in Malkay v. Kaskminetas Valley Coal Company, 123 A. 505 (Pa. 1924); a Decision in which coal miners were awarded workers’ compensation benefits for injuries that occurred while the coal miners were required to live on the employer’s premises?

Talk about working at home.

Concluding that the Claimant was required to live on the “work premises”, in order to provide care to the Claimant, the Commonwealth Court held that “when an employee is injured on the work premises by the act of another employee, there is a rebuttable presumption that the employee is covered by the Act.”  Citing to General Electric v. WCAB, 412 A.2d 196 (Pa. Cmwlth. 1980).

In reliance upon General Electric, the Commonwealth Court transferred the burden of proof from the Claimant to the employer (SWIF), to establish that the Claimant’s injuries were the result of an attack caused by personal animus, with the Court agreeing with the WCJ’s decision that SWIF failed to sustain its burden of proving that the attack resulting in the Claimant’s injuries was motivated by personal animus, instead of being related to the employment arrangement between the Claimant’s son and the Claimant.

Affirming the WCJ’s findings of fact, the Commonwealth Court held that the reason for the Claimant’s son assaulting the Claimant remained unknown, there being no evidence in the record from which a conclusion as to cause could be inferred.

Granting SWIF’s Petition for Allowance of Appeal, the Pennsylvania Supreme Court held that the Claimant had “clearly departed from her work duties and was engaged in a purely personal activity when she was attacked while sleeping in her bedroom”, it being clear that the Claimant was not engaged in the furtherance of the employer’s business when injured, such that the only scenario under which the Claimant would be allowed to recover workers’ compensation benefits is if it was proven that the Claimant was injured while on “premises occupied or under the control of the employer”.

This burden of proof would also require an analysis as to whether the Claimant’s presence, in her bedroom, at the time of the attack was “required by the nature of her employment”.

Reversing the Commonwealth Court’s finding that the Claimant was required to be “on the premises” when injured, the Supreme Court held that the Claimant’s employment contract and job description never required the Claimant to work late-night shifts, or to provide 24-hour care, or to be on call for son’s needs, as her son never qualified to receive funding for an overnight caretaker, given that his medical condition did not warrant such care.

So holding, the Pennsylvania Supreme Court ruled that the Claimant’s “presence in her bedroom in the middle of the night was not required by the nature of Claimant’s employment”, such that the Claimant should not have been entitled to an award of workers’ compensation benefits.

The Supreme Court also held that the Commonwealth Court’s reliance upon the Supreme Court’s earlier decision inMalky, was misplaced, as the “bunkhouse rule covered situations in which an employee’s living arrangements in the work presence is reasonably necessary to perform the tasks required by the employer.”

In Malky, the employees were required to be on the employer’s premises 24 hours a day, withMalky involving union coal mine workers being killed in an explosion when striking workers threw a bomb into the mine bunkhouse in the middle of the night, with the WCJ initially denying compensation, finding that the mine workers were not required to be on the employer’s premises at the time of the explosion, with the Supreme Court holding that the mine workers were required to be on the employer’s premises 24 hours a day, and that the employer occupied and controlled the premises where the mine workers were killed.

The Supreme Court also held that the Commonwealth Court in O’Rourke failed to recognize that the bunkhouse rule should only result in an employee being compensated for work-related injuries that result from normal activity during the employee’s leisure time, if the employee is required to live on the employer’s premises and the premises are controlled and used by the employer in its business.  SeeMalky, 123 A. at 506.

In short, the bunkhouse rule imposes workers’ compensation liability on an employer requiring its workers to live in employer-furnished premises, when the employer controls, maintains, and uses the premises for its own benefit.

The rationale underlying the bunkhouse rule is that “an employee’s reasonable use of the employer’s premises constitutes a portion of the employee’s compensation.” Pierre v. Seaside Farms, Inc., 689 S.E. 2d, 615 S.C. (2010).

Consistently acknowledging the remedial nature of the Workers’ Compensation Act, intending that the benefits inure to injured workers, the Supreme Court nevertheless held that it was “mindful that the Act was not intended to make the employer an insurer of its employees’ lives and health.”  Kmart Corporation v. WCAB, 748 A.2d 660 (Pa. 2000).

Holding that the Claimant was not engaged in furtherance of her son’s business when she was attacked while sleeping in her bedroom, nor did the nature of her employment require her to be in the bedroom at the time of the attack, the Pennsylvania Supreme Court concluded that her injuries were not sustained in the course and scope of her employment, and were not, therefore, compensable under the Workers’ Compensation Act.

A dissenting opinion was submitted by Justice Todd, in the course of which Justice Todd would have held that the nature of the Claimant’s employment did require her to live with the employer, her son, and that her home was, therefore, the “work premises”.

TAKE AWAY

Clearly, this is a highly unusual case, involving unique circumstances.

All kinds of factors were at play in this case, with our analysis being that the Supreme Court correctly decided that the Claimant’s injuries were not sustained within the course and scope of her employment, and that the nature of her employment relationship did not require the Claimant’s presence “on premises” controlled or occupied by the employer, her son.

Given the highly unusual facts involved with this case, course and scope of employment issues need to be carefully scrutinized for factual inconsistencies defying statutory logic.

ConnorsO’Dell LLP

Trust us, we just get it!  It is trust well spent!

We defend Employers, Self-Insureds, Insurance Carriers, and Third Party Administrators in Workers’ Compensation matters throughout  Pennsylvania.  We have over 100 years of cumulative experience defending our clients against compensation-related liabilities, with no attorney in our firm having less than ten (10) years of specialized experience, empowering our Workers’ Compensation practice group attorneys to be more than mere claim denials, enabling us to create the factual and legal leverage to expeditiously resolve claims, in the course of limiting/reducing/extinguishing our clients’ liabilities under the Pennsylvania Workers’ Compensation Act.

Every member of our Workers’ Compensation practice group is AV rated.  Our partnership with the NWCDN magnifies the lens for which our professional expertise imperiously demands that we always be dynamic and exacting advocates for our clients, navigating the frustrating and form-intensive minefield pervasive throughout Pennsylvania Workers’ Compensation practice and procedure.

Sometimes alarming statements made at work justify a fitness examination.  In the case ofBarnum v. The Ohio State University Medical Center, 2016 App. LEXIS 2957 (6^th Cir. 2016), the plaintiff worked as a Certified Registered Nurse Anesthetist.  In 2011, she was having issues at home due to a divorce and other family matters.  A co-employee advised her supervisor that Barnum said, “…maybe I’d be better off (if) I wasn’t here, maybe I should just put a gun to my head, maybe I should just not be here.”

An anesthesiologist at the hospital also became concerned about Barnum’s ability to concentrate on taking care of patients.  A surgeon had to ask her twice to raise a patient’s operating table because Barnum was not paying attention.  When the surgeon got her attention, Barnum said words to the effect that “I’m not worth anything or I’m worthless, what good does it do or what difference does it make, why should I even be here, maybe I should do everybody a favor and not be around.”  For her part, Barnum denied ever having this specific conversation with this doctor, but she did admit to being unable to adjust the height of the operating table and becoming frustrating and tearful.

Several doctors at the hospital became concerned about possible suicidal risk, leading the hospital to place Barnum on sick time leave for one to two weeks in October 2011. The hospital requested a fitness-for-duty examination with a psychiatrist.  Barnum was concerned about doing this in part because her husband worked as a case manager for the OSU mental health department and he might see the medical records. Eventually Barnum saw a psychiatrist, Dr. Masterson, on November 16, 2011.  The hospital wanted to make sure that this psychiatrist spoke with one of the physicians from the hospital who was aware of some of the comments that had been made at work. 

 Dr. Masterson prepared her report, which Barnum delivered on February 22, 2012.  In that report the doctor stated that Barnum was fit for duty and always had been.  However, the doctor had not spoken with the key physicians at the hospital, so the hospital would not allow Barnum to return to work. Barnum filed a Charge of Discrimination with the Ohio Civil Rights Commission in April 2012 because she was not being permitted to return to work.   Eventually, Barnum signed an authorization allowing Dr. Masterson to speak with two doctors at the hospital about her behavior and comments at work.  On July 31, 2012 Barnum presented a second medical report from Dr. Masterson stating that the conversations with the doctors did not change her opinion:  Barnum remained fit for duty.

On November 9, 2012, Barnum was reinstated to her position.  She then sued for discrimination on the basis of disability.  She argued that OSU violated the Americans with Disabilities Act by requiring her to undergo a medical examination that was not job related.   The Sixth Circuit Court of Appeals disagreed:

An employer may request a medical examination when ‘there is significant evidence that could cause a reasonable person to inquire as to whether the employee is still capable of performing her job… The burden is on the defendants in this case to show that the required mental-health evaluations were ‘job-related and consistent with business necessity.’

The Court said that in this case there were numerous and legitimate concerns about whether Barnum could perform job tasks and concentrate at work.  The hospital had been informed that Barnum had made a comment suggesting suicidal thoughts. “These circumstances constitute significant evidence that would cause a reasonable person to inquire whether the employee is still capable of performing her job.”  The Court therefore dismissed plaintiff’s 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. 

TO BE EMPLOYED OR INDEPENDENT IN PENNSYLVANIA

By

Jeffrey D. Snyder, Esquire

In the Commonwealth Court’s Opinion in Agatha Edwards v. WCAB (Epicure Home Care),1106 C.D. 2015, filed March 10, 2016, the Court re-visited the issue of employee versus independent contractor. 

The Claimant was a personal caretaker who received her assignments through Epicure.  The case was bifurcated before the WCJ below to address the employee versus independent contractor issue. 

The Workers’ Compensation Judge (WCJ) concluded that the Claimant was an Employee.  On the Employer’s appeal to the Workers’ Compensation Appeal Board (WCAB), that Decision was reversed.  That reversal was affirmed by the Commonwealth Court (Court).

The WCJ considered that Epicure, referred to as the “Company” in this Court Opinion, registered and screened caretakers and then matched caretakers to clients in need of in-home care.  The Claimant worked for the Company for some six years before the date of injury.  The Company controlled work assignments and set wages. 

The Company advised the Claimant of the client’s condition, set work hours, and required the Claimant to check in and out when working on assignments.  The Company set guidelines for care and provided a related manual to the caretaker.  A caretaker could be removed from an assignment by the Company.

The Claimant was injured when she fell down a flight of steps in a client’s home.

A classic OOPS!

The WCJ noted that the Claimant worked as a caretaker for over 19 years, never working independently but always associated with an agency.  The Company billed the clients at a suggested rate for services and the clients then sent separate checks to the Company and to the Claimant. 

The Claimant deducted her own taxes - and her tax returns identified her as self-employed.  The Company did not inform the Claimant that it would not provide workers’ compensation insurance coverage.  Eventually, and before her accident, the Claimant signed an Employment/Independent Contractor Agreement with the Company.

The WCAB, in reversing the WCJ, relied on an unpublished Opinion in Fletcher v. WCAB (Saia d/b/a Visiting Angels), Pa. Cmwlth. Ct. 1664 C.D. 2009,filed March 26, 2010;  unpublished Opinions may be cited as persuasive, but not as controlling precedent, per the Operating Rules of the Court. 

Fletcher was said to involve similar facts as here, and in that case, the Court had concluded that the home health caregiver was an independent contractor.

The Claimant argued on appeal to the Court that the WCAB was re-weighing the evidence and substituting its own fact-finding for that of the WCJ.  The Court determined that it was not dealing with issues of credibility as much as issues of law relative to the employee versus independent contractor status of the Claimant. 

The Court noted that the Claimant had the burden of proof on this Claim Petition, and that: “The existence of an Employer-Employee relationship is a question of law based on the facts presented in each case”.  The Court cited to the case ofHammermill Paper Company v. Rust Engineering Company, 243 A.2d 389 (Pa., 1968), for factors indicative of employee versus independent contractor status.  These factors include ten items for consideration:

            (1) Control of manner in which the work is done;

            (2) Responsibility for result only;

            (3) Terms of agreement between the parties;

            (4) Nature of the work/occupation;

            (5) Skill required for performance;

            (6) Whether one is engaged in a distinct occupation or business;

            (7) Which party supplies the tools/equipment;

            (8) Whether payment is by time or by the job;

            (9) Whether work is part of the regular business of the ‘Employer’; and,

            (10) The right of the ‘Employer’ to terminate employment. 

The Court observed that one factor is not dispositive, with control over the work to be completed and the manner in which it is to be performed being the primary factors in determining employee status.  Payment is not determinative, citing toAmam. Rd. Lines v. WCAB (Royal), 39 A.3rd 603 (Pa. Cmwlth., 2012), nor is a declaration of self-employment on a tax filing dispositive, citing toGuthrie v. WCAB (The Travelers Club, Inc.), 854 A.2d 653 (Pa. Cmwlth., 2004).

The Court agreed with the WCAB that the facts in Fletcher were nearly identical to those presented in this case.  The Court nonetheless observed that the WCJ made findings supporting status as an independent contractor.  Although the Company billed clients and set a suggested rate of pay, the clients paid Claimant directly and determined the rate of pay.  The Claimant deducted her own taxes.  The Claimant identified herself as self-employed on her tax returns.  The Company did not provide its caretakers with any sick time, vacation or holiday pay.  The Claimant signed an Employment Agreement, which provided that caretakers are not employees of the Company.  The Claimant was free to work for other agencies.

In the view of the Court, the WCAB did not re-weigh the evidence or substitute its findings for that of the WCJ.  The Court considered this case similar to that inFletcher, but nevertheless held that ultimately the findings of the WCJ did not support the legal conclusion that Claimant was a Company Employee.  The Court did not specifically distinguish the facts inFletcher, but noted that as an unreported Opinion, it could be cited as persuasive authority, although not as a controlling precedent. 

The Court made no mention whatsoever of Pennsylvania’s adoption of the Construction Workplace Misclassification Act, a statute specifically designed to provide parameters for independent contractor versus employee status in the construction industry, in this Opinion.

The take away from this case is that the determination of Employee versus independent contractor status resides in the details, and that the structuring of the relationship is the key to determining the issue and surviving appellate review.

ConnorsO’Dell LLP

Trust us, we just get it!  It is trust well spent!

We defend Employers, Self-Insureds, Insurance Carriers, and Third Party Administrators in Workers’ Compensation matters throughout  Pennsylvania.  We have over 100 years of cumulative experience defending our clients against compensation-related liabilities, with no attorney in our firm having less than ten (10) years of specialized experience, empowering our Workers’ Compensation practice group attorneys to be more than mere claim denials, enabling us to create the factual and legal leverage to expeditiously resolve claims, in the course of limiting/reducing/extinguishing our clients’ liabilities under the Pennsylvania Workers’ Compensation Act.

Every member of our Workers’ Compensation practice group is AV rated.  Our partnership with the NWCDN magnifies the lens for which our professional expertise imperiously demands that we always be dynamic and exacting advocates for our clients, navigating the frustrating and form-intensive minefield pervasive throughout Pennsylvania Workers’ Compensation practice and procedure.

PENNSYLVANIA MEDICAL ONLY WORKERS’ COMPENSATION CLAIMS

By

Kevin L. Connors, Esquire

Recently, the Pennsylvania Commonwealth Court issued two decisions in October of 2015, addressing the procedural issues that arise in the context of what is the appropriate petition to file, when a Claimant whose workers’ compensation claim has been accepted as a “medical only” claim, with the issuance of a Medical Only Notice of  Compensation Payable, thereafter alleges that the workers’ compensation claim has resulted in allegedly compensable wage loss, with the procedural debate being whether the Claimant must file a Claim Petition, or, alternatively, should file a Reinstatement Petition.

The two Commonwealth Court decisions are Sandra Sloane v. WCAB (Children’s Hospital of Philadelphia), decided on October 1, 2015, andAlex Ingrassia v. WCAB (Universal Health Services), decided on October 26, 2015.

In Sloane, the Commonwealth Court determined that the Claimant’s medical treatment was compensable, but that the Claimant was not entitled to an award of temporary total disability benefits, for reasons that we will explain.

In Ingrassia, the Commonwealth Court vacated the decisions of the Workers’ Compensation Appeal Board and WCJ, denying the Claimant’s claim for disability benefits, with the case remanded back to the Appeal Board and WCJ, to render additional findings of fact and conclusions of law on the issue of the alleged Sloane wage loss disability.

Sloane

Turning first to Sloane, Sloane was injured while working for the Children’s Hospital of Philadelphia on April 20, 2004.  Her injury was an injury to her right elbow, in the course of moving cervical traction weights for a patient.

Her claim was then accepted under a Notice of Compensation Payable, with the claim being accepted both for the description of injury as well as for associated wage loss disability.

The described injury was lateral epicondylitis of the right elbow.

Subsequent to the acceptance of the claim, the Claimant began receiving partial disability benefits, under a series of Supplemental Agreements, reflecting that the Claimant was working in a light-duty position with reduced wages.

She then suffered a second work injury, on December 3, 2006, while she was attempting to restrain a patient.  That injury involved the Claimant injuring her right elbow and right knee.

The 2006 claim was accepted as compensable under a Medical Only Notice of Compensation Payable, with the NCP not recognizing any compensation for alleged wage loss.

The 2006 injury was described as an “exacerbation of right elbow epicondylitis and flare up of pre-existing (degenerative joint disease) in her right knee”.

Following that injury, the Claimant did return to light duty work, and continued receiving temporary partial disability benefits for her 2004 injury, until November 16, 2007, when she stopped working in anticipation of a right knee replacement surgery for the 2006 injuries.

Following the right knee replacement surgery, the Claimant did not return to work.

She then filed a Reinstatement Petition on May 31, 2011, seeking temporary total disability benefits as of November 1, 2007 for her right knee injury.

In a Decision issued by the WCJ on May 15, 2012, the WCJ granted the Claimant’s Reinstatement Petition, finding that the Claimant was totally disabled as of November 17, 2007, predicating the disability on her two injuries from 2004 and 2006.

The WCJ further required the employer to pay medical bills for treatment of the Claimant’s 2004 and 2006 work injuries, as well as to pay for the 2007 right knee replacement and subsequent post-surgical treatment.

The Judge’s Decision was then appealed to the Appeal Board by the employer, with the Appeal Board reversing the Judge’s Decision granting total disability benefits based upon the 2006 work injury, concluding that the Claimant had been required to comply with the three year statute of limitations period under Section 413(a) of the Act, as opposed to the 500 week period for reinstatement of suspended partial disability benefits under Section 302(b).

Since the Claimant did not file her petition within three years of the issuance of the 2006 NCP, the Appeal Board held that the Claimant was time-barred from receiving temporary total disability benefits for the 2006 injury.

However, the Appeal Board did conclude that the Claimant’s petition was timely filed with respect for her 2004 injury, as she was continuing to receive partial disability benefits for that injury through the date that she filed her Reinstatement Petition.

In concluding that the Claimant was still entitled to receive temporary partial disability benefits for the 2004 injury, the Board nevertheless determined that the Claimant had failed to prove, through credible and substantial medical evidence, that she was totally disabled as a result of the 2004 injury, such that the Appeal Board denied her claim for temporary total disability benefits for that injury.

Not surprisingly, both parties then appealed to the Commonwealth Court.

Before the Commonwealth Court, the Claimant argued that the Board had erred in barring her wage loss and medical benefits for her 2006 injury, in reliance upon a three year statute of limitations, as she claimed the issuance of the Medical Only NCP for her 2006 injury resulted in her “disability” being placed in a suspended status, which should have allowed her to seek reinstatement of compensation within 500 weeks of the issuance of the 2006 NCP. 

She also claimed that she was totally disabled from her 2004 work injury as of 2007.

Opposing Claimant’s appeal, the employer argued that it was not liable for the Claimant’s 2007 right knee replacement surgery, nor for medical expenses related to the 2006 injury, based on the Claimant having presented insufficient medical evidence to sustain her burden of proving either fact.

Addressing the timeliness of the Claimant’s petition, the Commonwealth Court, in an Opinion authored by Sr. Judge Colins, held that while Section 413(a) of the Act empowers a WCJ with broad discretion to amend an award of benefits, to include amending an NCP or an agreement of the parties, this Section of the Act also requires that the petition seeking to review, modify, or reinstatement benefits must be filed “within 3 years after the date of the most recent payment of compensation made prior to the filing of such a petition.”, in reliance upon Fitzgibbons v. WCAB (City of Philadelphia), 999 A.2d 659 (Pa. Cmwlth. 2010). 

Citing to the Pennsylvania Supreme Court’s ruling in Cozzone v. WCAB, 73 A.3d 526 (Pa. 2013), theSloane Court held that Section 413(a) of the Act is intended to act as a statute of repose, cutting off any entitlement to the reinstatement of disability benefits that have been partially or totally suspended at the expiration of the 500 weeks under which partial disability benefits are payable pursuant to Section 306(b)(1) of the Act.

Holding that the 500 week and 3 year statute of limitations periods under Section 413(a) of the Act must be construed together, with both being given affect to allow a Claimant whose benefits were suspended or reduced prior to the expiration of the 500 week period, to seek a reinstatement of total disability benefits within 3 years of the last payment of benefits, or the maximum 500 weeks allowed for partial disability, whichever occurs later.

As the Commonwealth Court explained, citing to City of Philadelphia v. WCAB, 24 A.3d 1120 (Pa. Cmwlth. 2011); Forbes Road CTC v. WCAB, 999 A.2d 627 (Pa. Cmwlth. 2010), the medical-only option for an NCP was created to allow an employer to accept liability for an injury, allowing for the payment of medical expenses, without being construed as an admission of liability with respect to the claim of loss of earning power.

Since the employer had never recognized or accepted the Claimant’s claim of alleged wage loss disability inSloane, disability wage loss benefits were never suspended when the 2006 NCP was issued, and the Claimant could not, therefore seek to have her disability benefits reinstated, as the 500 week period for reinstatement of benefits did not apply in Sloane absent an acceptance of liability as to wage loss.

Concluding that the 500 week period was inapplicable to the filing of the Claimant’s petition, the Commonwealth Court then sought to determine whether the Appeal Board had correctly determined that the Claimant’s petition was untimely, in terms of a 3 year statute of limitations, to the extent that it sought disability benefits for her 2006 injuries, noting that the issue was apparently one offirst impression.

Holding that the fact that no disability compensation had ever been paid for the Claimant’s 2006 injuries, theSloane Court held that the Claimant was required to establish entitlement to the disability benefits that she was seeking by filing a petition within 3 years of the date of her alleged injuries; although, inSloane, the Claimant’s petition was filed on December 31, 2011, and sought wage loss benefits for alleged injuries that had occurred on December 3, 2006, more than 5 years prior.

As for the Claimant’s attempt to reinstate total disability benefits for her 2004 injury, the Sloane Court held that the Claimant’s petition only sought benefits for her 2006 injury, not for the 2004 injury, with the parties having agreed, during the petition litigation, that the parties expressly stipulated that the 2004 injury would not be part of the current proceeding, such that neither party presented medical evidence on the issue of whether the 2004 injury totally disabled the Claimant from being able to work.

The take away from Sloane, in the context of what is the proper petition to file in the course of seeking temporary total disability benefits for injuries that the employer/insurer has accepted as “medical only”, is that a Claim Petition must be filed within 3 years of the injury, pursuant to Section 315 of the Act, to preserve any claim for wage loss benefits related to a “medical only” injury claim.

Ingrassia

In Ingrassia, the WCJ’s denial of disability benefits, affirmed by the Appeal Board, was vacated by the Commonwealth Court, with the case being remanded back to the Board and WCJ, to render findings of fact and conclusions of law on the issue of whether the Claimant was entitled to wage loss disability compensation benefits.

Ingrassia worked for Universal Health Services as a full-time transportation van driver, shuttling children to and from appointments.

While sitting at a red light, the Claimant’s van was rear-ended on June 16, 2011.

The Claimant immediately sought medical treatment with the employer’s panel doctor, with the Claimant being released to return to work.

A medical only NCP was then issued, describing the injury as a strain/sprain of the Claimant’s cervical and lumbar spine, with the Claimant’s medical treatment and expenses being accepted as compensable.

The day after the Claimant’s accident, the Claimant came into work, but left early, claiming that he had a headache and was dizzy.

The Claimant never returned to work for Universal Health.

Two months later, the Claimant filed a Claim Petition, alleging that he had suffered injuries to his neck and back, as well as to his head and left arm, with the Claimant alleging that he became totally disabled by his work injuries the day after the June 16, 2011 accident.

In the course of litigating the Claim Petition, both parties presented evidence, with the Claimant also amending his Claim Petition to a Reinstatement Petition, based upon the employer having already recognized that a work injury had occurred.

In 2012, the Claimant testified before the WCJ that he had started a new job, driving a customer shuttle van for a different employer, in June of 2012. 

Questioned whether the Claimant would have been able to return to his pre-injury job with the employer, the Claimant testified that he had resumed driving in December of 2011, and that “I would say I could, sure,”, but that the Claimant found his new job simply easier to perform.

Accepting the Claimant’s testimony as being credible, except for any testimony that the Claimant had offered that his pre-injury job was too difficult to perform as of July of 2012, when the Claimant had begun working for the other employer, the WCJ concluded that the Claimant had failed to offer credible medical evidence that his work injury disabled him from being able to perform his pre-injury job.

Appealing the WCJ’s Decision, the Claimant was unsuccessful in convincing the Appeal Board to vacate, with the Appeal Board concluding that the Claimant’s expert medical witness, Dr. Yang, had offered testimony that was speculative as to the Claimant’s alleged disability, because the doctor lacked a factual basis for that opinion.

Appealing to the Commonwealth Court, the Claimant argued that the WCJ and Board had applied the wrong burden of proof, claiming that the issuance of the medical only NCP should have characterized his compensation benefits as being in a suspended status, such that the Claimant would have then carried the burden of proof that would be applicable to a Reinstatement Petition, a burden very different than that carried by a Claimant litigating a Claim Petition.

Under a Reinstatement Petition, the Claimant need not present medical evidence, as the Claimant’s testimony alone can support a reinstatement of compensation, that the originally-accepted disability, being the incapacity to perform the pre-injury job, has recurred, such that the Claimant again has a loss of compensable earnings.

Under a Reinstatement Petition, the burden of proof would then shift to the employer, requiring the employer to prove that the alleged disability is unrelated to the accepted work injury.

Holding that a Claimant, whose injuries have been accepted under a medical only NCP, who is seeking wage loss benefits for the accepted work injuries,Ingrassia held that the Claimant must file a Claim Petition, under which the Claimant would then carry the burden of proving that the work injury is causing a loss of earning power underOrenich v. WCAB, 863 A.2 165 (Pa. Cmwlth. 2004).

Under a medical only NCP, the Ingrassia Court held that there are no disability benefits to suspend or reinstate, since there had never been an acceptance or establishment of a loss of earning power resulting from the work injury.  Since the Claimant in Ingrassia had properly filed a Claim Petition, the Claimant continued to carry the burden of proving, through competent medical evidence, that the work injury resulted in wage loss disability.

In this context, the Ingrassia Court held that the WCJ and Board had correctly applied the burden of proof applicable to a Claim Petition, as opposed to the lesser burden of proof that would otherwise arise in the context of a Reinstatement Petition.

The take away from Ingrassia, no different than Sloane, is that the employer’s issuance of a medical only NCP does not result in a suspension of the entitlement to wage loss compensation benefits, as the medical only NCP only constitutes an acceptance of liability with respect to medical compensation benefits, such that it does not toll any timeline for seeking wage loss compensation benefits under either Section 413(a) or Section 315 of the Act, requiring a Claimant seeking wage loss compensation benefits for injuries that have been accepted under a medical only NCP to file a Claim Petition within 3 years of the date of injury, in order to preserve the alleged entitlement to wage loss compensation benefits under Section 306 of the Act.

Clear as a bell!

Well, the issue was one of first impression, in both cases, such that procedural clarification was necessary, in order that all parties understand not simply which petition is relevant, be it claim or reinstatement to the attempt to secure wage loss compensation benefits for injuries accepted under a medical only NCP, but that the characterization of the petitionalso determines the appropriate burden of proof, which, as we all know, is completely different under Claim and Reinstatement Petitions, as the Claimant carries almost no burden of proof under a Reinstatement Petition, a petition that seemingly can be granted by a WCJ with breathless testimony from a Claimant that the originally-accepted disability has recurred, and that the Claimant cannot, therefore, work, as opposed to the burden under a Claim Petition, requiring proof of several elements, to include employment, notice, causation, and disability, burdens which are continuing for a Claimant underInglis House v. WCAB, 634 A.2d 592 (Pa. 1993).

Conclusion

To close, the correct petition to litigate following issuance of a medical only NCP is a Claim Petition, and not a Reinstatement Petition, as wage loss disability has never been accepted by the employer/insurer, under a medical only NCP, and any claim for wage loss compensation benefits related to injuries accepted under a medical only NCP now clearly carries a 3 year burden of proof for the filing of a Claim Petition for wage loss compensation.

ConnorsO’Dell LLP

Trust us, we just get it!  It is trust well spent!

We defend Employers, Self-Insureds, Insurance Carriers, and Third Party Administrators in Workers’ Compensation matters throughout  Pennsylvania.  We have over 100 years of cumulative experience defending our clients against compensation-related liabilities, with no attorney in our firm having less than ten (10) years of specialized experience, empowering our Workers’ Compensation practice group attorneys to be more than mere claim denials, enabling us to create the factual and legal leverage to expeditiously resolve claims, in the course of limiting/reducing/extinguishing our clients’ liabilities under the Pennsylvania Workers’ Compensation Act.

Every member of our Workers’ Compensation practice group is AV rated.  Our partnership with the NWCDN magnifies the lens for which our professional expertise imperiously demands that we always be dynamic and exacting advocates for our clients, navigating the frustrating and form-intensive minefield pervasive throughout Pennsylvania Workers’ Compensation practice and procedure.

The Medicaid Secondary Payer Act will take effect on October 1, 2016. The new law substantially expands state Medicaid recovery rights, and these changes will affect settlements of workers’ compensation and liability claims involving Medicaid beneficiaries.

The Medicaid Secondary Payer Act represents the federal government’s response to the problems facing state Medicaid programs in their recovery efforts. The Affordable Care Act expanded the scope of persons eligible for Medicaid coverage, and at the same time, a state’s recovery efforts remained inhibited by court decisions and anti-lien provisions. In other words, the number of persons covered became disproportionate to the amount of money being recovered. The Medicaid Secondary Payer Act would seemingly strike a balance.

Under current law, a state’s Medicaid reimbursement rights are limited to portions of a settlement designated as medical expenses. In contrast, the Medicaid Secondary Payer provision allows states to recover from the entire settlement amount. More specifically, this provision eliminates the statutory language the Supreme Court relied on in Arkansas Department of Human Services v. Ahlborn, which limited Medicaid reimbursement rights to portions of the settlement or judgment related to “health care items or services.” The new language allows recovery against “any payments.” As a result, Medicaid will be able to claim 100 percent of its lien from settlements with its beneficiaries.

Whether you are attempting to settle a workers compensation claim or simply protecting your subrogation lien in a third party settlement, it will soon be more important than ever to determine the existence and extent of any Medicaid liens.

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About the Authors

This blog submission was prepared by Mike Fish and Ashleigh Hunnicutt.  Both are attorneys 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 or Hunnicutt by e-mailing then at mfish@fishnelson.com  or ahunnicutt@fishnelson.com or by calling them at 205-332-1448.