State News

A recent workers’ compensation blog post warns, “As global warming increases, and changing
weather patterns become more pronounced, workers’ compensation insurance systems will be
stressed to limits never before imagined.” According to the post, extreme temperatures and
significant storms are already causing increased levels of occupational injuries and illnesses. So far,
there has been no word from the Division on how it intends to address global warming.

One by product of the crackdown on pain pill abuse is increased urine drug testing. Many treatment
guidelines, the ODG included, recommend urine drug testing. Some doctors and labs have
capitalized on this opportunity, turning urine drug testing into a new profit center. Many system
participants have witnessed a significant increase in the frequency of drug testing, the number of
drugs for which patients are tested, and the use of qualitative drug testing which tests for the amount
of a drug as opposed to qualitative testing which just determines the presence or absence of a drug.
Five thousand dollar urine drug testing bills are not uncommon with some bills exceeding $9,000.
Now one system participant is fighting back by having every urine drug test retrospectively
reviewed for medical necessity. This resulted in savings of $493,372.97 in one quarter alone. The
reason is because in many cases the prescribing doctor was not following the ODG either because
the doctor was testing too often, testing too many drug classes, or doing quantitative testing with no
evidence of necessity. The ODG states that quantitative urine drug testing is not recommended
without evidence of necessity.

In Denham v. Texas Mutual Ins. Co., the deceased employee tested positive for marijuana. 2015 WL
4389286 (Tex. App.–Amarillo, July 15, 2015). The carrier denied the claim based on intoxication.
The Appeals Panel upheld the denial and the employee’s beneficiary filed suit for judicial review.
In the trial court, the carrier filed a no-evidence motion for summary judgment contending that the
beneficiary had failed to present any evidence that the employee was not intoxicated. The
beneficiary responded with an affidavit from a doctor challenging the validity of the positive test
results. The court held that such evidence does not rebut the presumption of intoxication.
According to the court, the rebuttable presumption of intoxication was raised by the positive drug
test results regardless of whether the results were founded on medically and toxicologically sound
theory. Once the presumption of intoxication was raised, evidence was required that the deceased
employee was not intoxicated, such as an affidavit from his passenger that he had the normal use
of his mental and physical faculties. No such evidence was provided. Therefore, the court of
appeals upheld the trial court’s judgment in favor of the carrier.

Beginning October 1, 2015, the Texas workers’ compensation system will transition from the use
of ICD-9 codes to the ICD-10 codes. Physicians must begin using ICD-10 codes to record diagnoses
and inpatient procedures for services provided on or after that date.
The Division has created a new training video on the transition to ICD-10 codes. The video is
available on the TDI website at http://www.tdi.texas.gov/wc/hcprovider/icd10.html. The video
reminds system participants to prepare in advance for the transition.
One still unanswered question for carriers is how they should process bills submitted with ICD-9
codes for dates of service after October 1, 2015. On the one hand, if they return the bills, that could
be a potential violation. On the other hand, if they process the bill and electronically report the ICD-
9 codes, that could also be a potential violation. Another question is what carriers should do with
bills submitted with ICD-10 codes for dates of service before October 1, 2015. ICT has asked the
Division for clarification. Hopefully, the Division will provide guidance soon so that system
participants can prepare in advance for the transition.

The Division recently issued a memo “reminding” insurance carriers and treating doctors that
medical records must be provided to designated doctors no later than three business days prior to
the exam. The memo also includes a “reminder” that the failure to do so is an administrative
violation. The Division has established a new email address DD’s can use to ask for help from the
Division in obtaining records, presumably when the records are not timely received:
DDRecords@tdi.texas.gov. Therefore, carriers and treating doctors who do not get the records to
the DD timely should not be surprised if they receive a violation notice.

On June 26, 2015, the U.S. Supreme Court held that the Fourteenth Amendment requires a State to
license a marriage between two people of the same sex and to recognize a marriage between two
people of the same sex when their marriage was lawfully licensed and performed out-of-State.
Obergefell v. Hodges, __ U.S. __ (No. 14-556, June 26, 2015).
The surviving spouse is entitled to receive death benefits under the Workers’ Compensation Act.
The surviving spouse must provide a marriage license or satisfactory evidence of common-law
marriage. Section 2.401 of the Texas Family Code limits the definition of a common law marriage
to a relationship between a man and a woman.
However, Texas courts will likely hold that this statute was modified by the Due Process and Equal
Protection Clauses of the Fourteenth Amendment to the Constitution of the United States as
interpreted by the Supreme Court in Obergefell. Therefore, expect to see same-sex surviving
spouses seeking death benefits in the not too distant future.

For further inquiries, please contact F&P Principal, Bert Randall, at (410) 230-3622 or by email at arandall@fandpnet.com.

I.                    New Maryland Benefit Rates

 Effective January 1, 2015, the following are the maximum benefit rates for Maryland disability benefits:

 State Average Weekly Wage – $1,005.00 (which represents the cap on temporary total disability, permanent total disability, and vocational rehabilitation benefits)

 Permanent Disability Under 75 Weeks – $168/week

 Permanent Disability Between 75-249 Weeks – $335/week

 Permanent Disability for 250 or More Weeks – $754/week

II.                  Regulatory Changes Effective July 20, 2015

Beginning July 20, 2015, two COMAR amendments impacting Maryland Workers’ Compensation Commission procedures became effective, one regarding judicial review and the other regarding legal representation and fees in dependency cases.

1. Judicial Review Procedures

The first of the amendments will alter COMAR 14.09.11.01-.05, which address judicial review procedures. The stated purpose of the action is to comply with new Md. Rule 7-206 and 7-206.1,^[1] and to update the language to accord with Labor and Employment Article, § 9-742, Md. Code Ann. The most substantial changes to the regulation concern documents required upon appeal of Commission and court decisions. The amendment requires that parties appealing a circuit court or appellate court disposition shall notify the Commission using a Cover Sheet for Action on Claims on Appeal, accompanied by a copy of the notice of appeal or petition for writ of certiorari. For circuit court proceedings, parties submitting a Cover Sheet for Action on Claims on Appeal to notify the Commission of a circuit court disposition no longer need to provide a copy of docket entries.

Additionally, COMAR 14.09.11.05 states that if the Commission exercises its continuing jurisdiction under Labor and Employment Article, §9-742, Md. Code Ann., to pass a supplemental order deciding an issue, the first petitioner/appellant shall file within 5 days of entry of the supplemental order: (1) a copy of the supplemental order with the court in which appeal is pending, and (2) a written certification with the Commission that the first petitioner/appellant has filed the copy of the supplemental order with the circuit or appellate court. The regulation now mandates that the written certification contain a description of the supplemental order filed and the date and manner of the filing. Lastly, petitioner/appellant must file the written request for any transcript required for inclusion in the record when the written certification is filed with the Commission.

The text of the amended judicial review procedures regulation can be found at: http://www.dsd.state.md.us/MDR/4209/Assembled.htm#_Toc417898860

1. Legal Representation and Fees

The second of the amendments modifies COMAR 14.09.04.03. The purpose of this amendment is to address an ambiguity in the Schedule regarding fees for the representation of the dependents of deceased workers.

In cases involving claims of dependency where compensability is not contested, but theextent of dependency (partial or total, or the identity of a dependent, or both) is contested, the new rule clarifies that the Commission may approve a total attorney’s fee for attorneys representing all dependents:

(i)                  In an amount not exceeding five times the State average weekly wage in a case of partial dependency under Lab. & Empl. Art. §9-682, Md. Code Ann.; or

(ii)                In an amount not exceeding 12 times the State average weekly wage in a case of total dependency under Lab. & Empl. Art., §9-681 or 9-683.3, Md. Code Ann.

In cases involving a claim of dependency where neither compensability nor dependency is contested and a record is being made solely to determine to whom payments of compensation shall be made, the Commission may approve an attorney’s fee in an amount not exceeding two times the State average weekly wage.

Lastly, in a case involving a claim of dependency where compensability and dependency are contested, the Commission may approve an attorney’s fee (1) in an amount calculated under 14.09.04.03 §B(3)(a) in a case involving a claim of partial dependency under Lab. & Empl. Art. §9-682 or 9-683.3,^[2] or (2) in an amount calculated under 14.09.04.03 §B(4)(a), in a case of total dependency under Lab. & Empl. Art. §9-681.^[3]

No substantive provisions of COMAR 14.09.04.03 were deleted upon amendment; the new regulation simply serves as clarification as to proper attorney’s fees in cases involving claims of dependency.

The text of the legal representation and fees amendment can be found at:

http://www.dsd.state.md.us/MDR/4207/Assembled.htm

III.                Recent Cases in Workers’ Compensation

a.       The requirement of cross-appeal for Circuit Court to revisit issues decided by Commission against non-appealing party depends on whether re-visiting the issue would require the Court to reverse or affirm the Commission’s decision.

                                                              i.      Uninsured Employers’ Fund, et. al. v. Ronald White, 219 Md. App. 410, 100 A.3d 1275 (2014)

1.       In the case of Uninsured Employers’ Fund, et al. v. White, the Court of Special Appeals discussed the necessity of a cross-petition in certain instances involving appeals of administrative decisions to a circuit court.

2.       The case emphasizes the caution claimant’s attorneys must exhibit in deciding whether or not to file cross-petitions. Where claimants fail to file a timely cross-petition where a circuit court is revisiting an issue previously decided by the Commission against the non-appealing party, and if the reconsideration of the issue might lead to a reversed or vacated decision, a party will lose their opportunity to challenge the Commission’s decisions.

b.      Claimant attorneys are only entitled to a fee on a “final award” by the Commission after all appeals have been exhausted.

                                                              i.      Brunson v. Univ. of Md. Med. Sys. Corp., 221 Md. App. 583, 110 A.3d 713 (2015)

1.       The Court of Special Appeals discussed the right to attorney’s fees when (1) an initial award of temporary total disability (“TTD”) benefits is rescinded; and (2) a subsequent permanency award results in no compensation payable given the credit created by payment of TTD benefits, later rescinded.

2.       This case shows that a claimant’s attorney who loses his case on appeal may be unable to recover attorney’s fees because attorney’s fees, generally provided within the claimant’s award of compensation and/or benefits, will be unavailable where no award is given. The Code of Maryland Regulations 14.09.04.03(C)(1) provides: “Absent exceptional circumstances, the Commission may not approve an attorney’s fee in a case in which it is determined that the claimant is not entitled to any compensation or benefits.”

c.       Workers’ Compensation Commission does not have the authority to order the UEF to reimburse IWIF for benefits paid when there is another source of compensation.

                                                              i.      Injured Workers' Ins. Fund v. Uninsured Employers' Fund, 221 Md. App. 322, 108 A.3d 609 (2015)

1.       The Court of Special Appeals of Maryland considered whether the Workers’ Compensation Commission has the authority to order the Uninsured Employers’ Fund (“Fund”) to reimburse the Injured Workers’ Insurance Fund for benefits paid to a Claimant. In the instant case, because Chen was found to be an insured employer, the Fund was not required to pay benefits. The statute does not require the Fund to reimburse an insurer where its insured is a jointly and severally liable employer. Therefore, the Court held the Commission exceeded its authority when it ordered the Fund to reimburse IWIF for benefits paid.

2.       This case shows the importance of defining who is and is not an “employer” and its impact on the Fund’s need to reimburse insurers. The Fund is available for the sole purpose of funding compensation where there is no other source of compensation for claimants. Thus, where multiple employers and the Fund are jointly and severally liable, the Fund is not responsible for paying a claimant’s award.

d.      The SIF assessment on permanency awards is based on the total amount of a permanent disability awardbefore offsets are applied.

                                                              i.      Employer/Insurers should be aware that the 6.5% assessment payable to the SIF is based on the total amount of the permanent disability award prior to offsets.

                                                             ii.      NOTE: The Employer/Insurers in this case may petition the Court of Appeals for Certiorari and thus the issue should be closely monitored.

e.      Court of Appeals affirms the Commission’s right to combine awards for scheduled and unscheduled members for compensation tier purposes.

                                                               i.      Montgomery County v. Robinson No. 67, September Term 2010; and Board of Ed. ofMontgomery County v. Anderson No. 68, September Term 2010

1.       The court ultimately decided that the Workers’ Compensation Act’s remedial nature must be construed liberally in favor of an injured worker, and that combining awards for scheduled and unscheduled members serves such purpose. The court stated that nothing in LE § 9-628 and LE § 9-629 prohibits combining awards for scheduled members with awards for “other cases,” and a failure to allow such combination would lead to “strange, unfair and… illogical results.” Further, the court reasoned that the language within the second-tier benefits provision is broad and does not use the terms, “scheduled” and “unscheduled.” Thus, the court held the Commission may combine compensation awards to determine which of the three compensation tiers is appropriate.

f.        Entitlement to Temporary Total Disability benefits is still a medical question.

                                                               i.      Phuonglan Ngo v. CVS, Inc., et al., Court of Special Appeals, September 25, 2013

1.       In Phuonglan Ngo, the issue was whether a Claimant who has reached maximum medical improvement can receive temporary total disability benefits under the Maryland Workers’ Compensation Act.

2.       The Court found that temporary disability refers to a physical state and that employment potential does not fall into this category. The Court further opined that a Claimant does not need to be placed into suitable employment, but rather must be so limited in quality, dependability, or quantity, that a reasonably stable market for a Claimant does not exist.

g.       Clarifying reimbursement of the workers’ compensation lien/offset in a third party case.

                                                              i.      David Ross v. John Agurs and Progressive Casualty Insurance Company, No. 978, September Term 2012 (decided September 9, 2013)

1.       This case clarifies what amounts are included in a workers’ compensation offset by an uninsured/underinsured (“UM/UIM”) motorist carrier. It reaffirms that court costs and attorney’s fees should not be included in the amount the claimant “received” under a workers’ compensation case.

For further inquiries regarding Maryland law contact Mr. Randall at (410) 230-3622 or at arandall@fandpnet.com.

Imperial Aluminum-Scottsboro, LLC v. Taylor

Released July 24, 2015

The employee filed suit against the employer asserting a workers’ compensation claim, retaliatory discharge and the tort of outrage. Upon the case being filed the employer filed a Rule 21 Motion to Sever the workers’ compensation claim from the retaliatory discharge claim and outrage claim. This included a request that a new case number be assigned to the discharge and outrage claims. However, the trial court entered an order under Rule 42(b) bifurcating the issues and calling for separate trials only. A new case number was ever issued. The discharge and outrage claims were tried before a jury prior to the workers’ compensation case being heard. The outrage case was dismissed but the jury awarded compensatory and punitive damages to the employee based on the discharge claim.

The employer appealed the jury verdict awarding the employee compensatory and punitive damages as a result of his retaliatory discharge claim. The Alabama Court of Civil Appeals ruled that the retaliatory discharge verdict was not a final order and could not be appealed because the Court had not ruled on the workers’ compensation claim that was still pending under the same case number.

My Two Cents

Based on this ruling, we must assume that the opposite would apply and a ruling in a workers’ compensation case would not be final and appealable while related tort claims are still pending. This creates an issue for employers and employees in cases where the employer or employee wants to appeal an adverse verdict in a workers’ compensation case that also had a related tort claim still pending under the same case number. In cases were the employer is ordered to pay benefits, would the employer have to go ahead and pay the worker’s compensation benefits ordered despite it’s desire to appeal the decision or would the pending tort claim stay the workers’ compensation order and prevent the employee from recovering until the tort claim was decided and the deadline to appeal had run. In cases where the employee wanted to appeal and adverse verdict they would not be able to have their appeal on the workers’ compensation case heard until the tort claims were decided. In cases where this may present an issue, it may be advisable for the parties to request a Rule 21 Severance with a new case number instead of Rule 42(b) Separate Trial order where the tort and workers’ compensation claims remain under the same case number.

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ABOUT THE AUTHOR

The article was written by Joshua G. Holden, Esq. a Member of Fish, Nelson & Holden, LLC, a law firm dedicated to representing employers, self-insured employers and insurance carriers in workers’ compensation and related liability matters. Mr. Holden is AV rated by Martindale-Hubbell, which is the highest rating an attorney can receive. Holden and his firm are members of The National Workers’ Compensation Defense Network (NWCDN). The NWCDN is a national and Canadian network of reputable law firms organized to provide employers and insurers access to the highest quality representation in workers’ compensation and related employer liability fields.

The Alabama Court of Civil Appeals recently reversed an order based on a trial court’s decision which only found the employee suffered a physical impairment to her shoulder and did not explicitly address loss of earning ability. InBillingsley v. City of Gadsden, the employee made a claim for workers’ compensation benefits for an injury to her shoulder, and other parts of her body, following an on-the-job automobile accident. Notably, the employee stopped working for the employer a few months after her accident, but prior to reaching maximum medical improvement. As a result, upon reaching MMI, she was not earning the same or greater wages than that which she was earning prior to the accident.

The court determined that the employee’s shoulder injury was compensable, but found that the other conditions had either resolved or were preexisting. In its order, the trial court determined the employee had sustained a 25% physical impairment to her shoulder, and awarded permanent partial disability benefits based on this finding of physical impairment. The decision was appealed.

The Appeals Court agreed that the body parts other than the shoulder were not compensable, but it disagreed with the trial court’s award of benefits based on a finding of physical disability, alone. The Appeals Court noted that an injury to an employee’s shoulder is not included in the Act’s schedule, and therefore, an award for a shoulder injury can only be upheld when the court makes an express finding regarding an employee’s loss of ability to earn. Although physical disability may be a preliminary foundation for finding loss of earning ability, the court must also explicitly address loss of earning ability when the employee has not returned to work earning the same or greater wages. By failing to address the employee’s loss of earning ability, the trial court’s decision provided no basis for an award. The case was therefore remanded with instructions for the trial court to determine the extent, if any, to which the employee’s injury affected her ability to earn income, and to award the employee benefits accordingly.

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About the Author

This post was written by Trey Cotney, Esq., of Fish Nelson & Holden LLC, a law firm dedicated to representing employers, self-insured employers and insurance carriers in workers’ compensation matters. Fish Nelson is a member of the National Workers’ Compensation Network (NWCDN). If you have any questions about this article or Alabama workers’ compensation issues in general, please feel free to contact the author at tcotney@fishnelson.com or any firm member at 205-332-3430.

Patrick Vasnaik worked for Providence Health & Services - Oregon as a security officer from 2006 to 2012.  His performance evaluations over the years fluctuated between requiring improvement to exceeding expectations.  However, he required several coachings over the years for not arriving on time to work.  In May 2010 he received a “documented coaching” after getting two tardies and three absences in a rolling 12-month period. 

He also was coached for violating lost and found procedures:  once in 2010 he mistakenly took home a lost wallet which he put in his own pocket and forgot to log, and again in 2011 when he erroneously informed a woman that her lost necklace had been found. 

One part of Vasnaik’s job was to park patients’ vehicles if the patient had to be taken into the hospital immediately.  In February 2011 he parked a patient’s vehicle in a designated disabled space without a permit, causing the patient to receive a $300 ticket. He was also coached about radio communications and emergency room standby procedures.

A recurring criticism of Vasnaik by his superiors was that he did not prioritize security calls or respond to them with urgency.  Once he did not answer an officer’s call because Vasnaik was eating lunch. His 2010 review noted that he only had one speed in which he performed every task and needed to augment his pace.  This criticism was noted again in 2011. 

In May 2011 Vasnaik received a written warning when he lost track of a stand by patient he was guarding because he was using a computer and got distracted.  Some time thereafter he was written up for walking away from a marked patrol vehicle with the keys in the ignition and the engine running.

The final violation of Providence’s policy occurred on September 3, 2012 when he parked his personal vehicle in the West Parking Structure, which was reserved for patients and visitors only.  Wasnaik noted that he was running late that day, and that the lot was almost empty because it was Labor Day weekend. He later claimed that he parked there because of his work-related knee condition.  His employment was terminated on September 17, 2012.

During the last three years of his employment, Vasnaik had four workers’ compensation injuries.  The first was on July 16, 2009 when he injured his knee while working with a patient.  The second was June 2010 when he severely injured his right knee restraining a psychiatric patient. That injury led to knee surgery and a seven-month absence from work.  The third was on August 30, 2011 again involving the left knee, and the final injury occurred on September 2, 2012 when a psychiatric patient bit him on the left forearm.  This occurred two weeks before he was fired.Providence argued that it did not know about the last incident until after the company fired Wasnaik. 

Vasnaik sued under the ADA and also theOregon state law prohibiting retaliation for filing workers’ compensation injuries.  The Court noted that Vasnaik claimed that his knee injuries substantially limited his major life activities, specifically his mobility and quickness on his feet.  However, his only proof of this was an independent medical examination dated June 20, 2010 which occurred before his corrective surgery.  “Taking that evidence as true, it still does not establish the knee injuries substantially limited any of Vasnaik’s major life activity after his surgery and recovery,” the Court stated. His doctor’s note post-surgery gave him a full release with no restrictions. The Court also noted that “quickness on one’s feet” is nowhere listed as a major life activity under theADA. 

The Court took a different view, however, of his workers’ compensation retaliation claim.  Vasnaik’s argument was thatProvidence demonstrated increased scrutiny of him following his 2010 workers’ compensation claim.  He also argued that his firing followed closely on the heels of his fourth workers’ compensation claim when he was bitten by a patient. 

The Court was not impressed with the increased scrutiny logic because there was ample evidence in the record thatProvidence was unsatisfied with Vasnaik’s work pace well before his workers’ compensation injuries.  However, the Court was concerned about the temporal proximity between the injury on September 2, 2012 and the termination on September 17, 2012.  Vasnaik said that he notified his employer around September 13, 2012 that he needed treatment for the biting incident.  That was one day beforeProvidence made the decision to terminate his employment.  The Court consideredProvidence’s stated non-discriminatory reasons for firing Vasnaik and also considered Vasnaik’s assertion that the timing of his termination was extremely suspicious:

Although there is no dispute that Vasnaik had received a written warning, and that he admits the underlying incidents were true, the Court finds a reasonable juror could interpret the evidence Vasnaik has produced as indicative of a discriminatory intent.  Vasnaik testified that he felt ‘singled-out on this particular incident. . . and the supervisors are very . . . aware that a lot of people do park there.’” 

The Court also commented that most of Vasnaik’s annual reviews were fairly positive. The review from 2012, two months before his termination suggested Vasnaik was performing satisfactorily and was meeting expectations.  The Court concluded, “The close temporal proximity between Mullen’s positive review, Vasnaik’s injury, and his termination could lead a reasonable juror to conclude that Providence’s proffered reason for terminating him -- that he parked in an essentially empty patient parking lot during the Labor Day weekend -- was pretextual.”

For this reason the Court denied summary judgment toProvidence on the workers’ compensation retaliation claim but granted summary judgment on theADA claim to the employer.  The case shows the perils of terminating an employee within days of a reported workers’ compensation claim, particularly when written job evaluations are at best equivocal, if not essentially positive. The case can be found at Vasnaik v. Providence Health & Services - Oregon, 2015U.S. Dist. LEXIS 61068 (D. Oregon, May 9, 2015).

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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.