State News

We in Texas are at ground zero in the Ebola scare. The first person to test positive for the disease

in the United States treated at Texas Health Presbyterian Hospital, and two of his nurses contracted

the virus and were quarantined. These events have raised questions regarding the interplay between

Ebola and workers’ compensation insurance coverage. Specifically, under what circumstances is a

worker covered under a workers’ compensation insurance policy if the worker tests positive for the

Ebola virus or is quarantined for monitoring?

This question has no bright-line answer. On the one hand, a compensable injury includes an

occupational disease. On the other hand, the term occupational disease does not include an ordinary

disease of life to which the general public is exposed outside of employment.

Generally speaking, to prove a compensable occupational disease, a worker must show that the

disease is indigenous to the work or present in an increased degree in that work as compared with

employment generally. Using that standard, the two quarantined hospital nurses probably can meet

their burden of proof to show that their conditions are compensable. The same is true for others on

the front line, such as laboratory workers and emergency responders.

But what about those who are not on the front lines but still face possible exposure, such as airline

flight attendants? Or workers who travel on airlines for business? Would they be covered?

The blogosphere is red hot with discussions of questions like these as insurance carriers, employers,

and state regulators scramble to find answers.

So, remember this: To get a DD to address MMI or IR after a BRC or CCH the BRO or HO will

send a PODODDE, not a DWC-32. Capisce?

It’s called the Presiding Officer’s Directive to Order a Designated Doctor Exam, and it’s the

newest thing at Division field offices. You’ll start seeing it come across your desk, because the

Division now uses it when Benefit Review Officers and Hearing Officers (now collectively

called “Presiding Officers”) order designated doctor exams.

In the past, a Presiding Officer ordered a designated doctor exam like the rest of us – by filling

out a Form DWC-32 (Request for Designated Doctor Exam). Not any more. Effective 10/01/14,

Presiding Officers are to use the new form.

Accordingly to a memo from Kerry Sullivan, the Division’s Deputy Commissioner of Hearings,

“the purpose of this change is to clarify when an examination is ordered by a Presiding Officer

and to identify clearly what the Presiding Officer is ordering the DD to address.” (Why that

requires a new, special form we’re not sure.)

Unless you have been cryogenically frozen in carbonite for the past 3 months, you have probably heard about the recent opinion released by Miami-Dade Circuit Judge Jorge Cueto which declared the Florida Exclusivity Doctrine unconstitutional.  His 22 page opinion (Padgett v. State of Florida No. 11-13661 CA 25) attacked the erosion of the Florida workers’ compensation system as a whole and asserted that the value of the benefits available to claimants did not justify thequid pro quo tort liability protections afforded employers.  The purpose of this article is to provide a general outline of what lead to Judge Cueto’s opinion and to consider its effect on a national scale.

Accident and Injury

The employee, Elsa Padgett, was an account clerk who tripped over some boxes that were left on the floor by a co-worker.  She reportedly fell on her hip and sustained significant injury to her shoulder.  After undergoing replacement surgery for her shoulder, she claimed that the resulting pain forced her to retire. 

Procedural Background

Padgett opted to file a negligence lawsuit against her employer.  In its Answer, the employer asserted the Exclusivity Doctrine (§440.11, Fla. Stat. 2003) as an affirmative defense.  Padgett then amended her Complaint to add a Count for Declaratory Relief asking the Court to declare the Florida Exclusivity Doctrine in violation of the U.S. and the Florida Constitutions.  Once Florida Worker’ Advocates (FWA) and Workers Injury Law & Advocacy Group (WILG) joined the party as interveners, the employer strategically withdrew its Exclusivity Doctrine defense and the negligence action was severed from the Declaratory Relief portion of the lawsuit.  The Florida Attorney General opted not to intervene in order to defend the constitutionality or validity of the Exclusivity Doctrine.  However, she did file a responsive pleading pointing out various procedural and substantive defects in the case.  FWA and WILG next sought a summary judgment but Judge Cueto denied the motion on the grounds that there was no longer a present justiciable controversy.  Padgett then intervened in the Declaratory Relief action which presented a controversy upon which Judge Cueto could rule (Florida empowers a judge to decide an issue if that issue is capable of repetition in the future and might evade review).

Erosion of Benefits

In his written opinion, Judge Cueto noted that the system of workers’ compensation is supposed to be the result of a compromise wherein employees receive immediate access to indemnity and medical benefits through a no-fault insurance system and employers are insulated, with limited exceptions, from tort liability.  He then pointed out that the benefits afforded employees had been greatly reduced as the result of the 2003 amendments that eliminated permanent partial disability benefits, put a 5 year cap on permanent and total disability benefits, capped said benefits at age 75, and apportioned medical care by requiring contribution in the form of co-pays by the employee after reaching maximum medical improvement.   Judge Cueto concluded that the Florida workers’ compensation system no longer provided adequate indemnity and medical benefits for injured workers and that preventing them from pursuing a tort remedy was a violation of due process.

Ruling

Judge Cueto ruled that the Florida Exclusivity Doctrine was unconstitutional on August 13, 2014.  One week later, he denied a motion for rehearing filed by the Attorney General’s office.

Appeal

The Attorney General appealed Judge Cueto’s ruling to the Third District Court of Appeal on August 26, 2014.  The case is now calledFlorida v. Florida Workers’ Advocates.  Should the District Court of Appeal decide to rule, its decision could become the law for the Third District, and possibly followed by the other Florida districts.  The Third District Court declined to certify the case directly to the Supreme Court and the District Court of Appeal also denied that request.  The Attorney General’s initial Brief is due on or before December 4, 2014.

According to Casey Gilson attorney Rayford Taylor, who practices in Georgia and Florida, there is a legitimate chance that Judge Cueto’s ruling will be treated merely as an advisory opinion rather than a declaratory judgment.    None of the Interveners established that they had been injured or prejudiced by the Exclusivity Doctrine, or by the provisions they cited as a basis for a challenge to the statute.  The issue may need to be addressed again the next time an employee sues an employer in tort and the employer asserts the Exclusivity Doctrine as a defense.

Other Constitutional Attacks in Florida

The Padgett case is not the first time this particular claimant’s attorney has taken the offensive against the Florida Workers’ Compensation Act on constitutional grounds.  According to attorney Rob Grace, who practices with the Bleakley Bavol firm in Florida, this same attorney has filed a number of these suits around the state during the last five years. Padgett just happened to be one where a judge accepted his argument.  The attorney filed a similar suit in Broward County which was dismissed approximately five years ago.  At the same time, the attorney had another comparable suit (Stahl v. Tenet Health Systems, Inc.) in Dade County which he lost at the Third District Court of Appeals level. 

The Florida Supreme Court is currently considering a couple of other cases involving constitutional attacks on the state’s workers’ compensation system.  In the case ofWestphal v. City of St. Petersburg, The Court has before it an appeal from a firefighter who was injured and left with no income after his temporary indemnity benefits expired.  His authorized doctors took him out of work and he was not eligible for additional benefits until the doctors placed him at maximum medical improvement.  The firefighter is challenging the constitutionality of the statutory limit on the payment of temporary total disability benefits.

In the case of Castellanos v. Next Door Company, the Florida Supreme Court is considering an appeal challenging the constitutionality of the statute that provides for the calculation of attorneys’ fees in workers’ compensation matters, based solely on a statutory percentage of benefits achieved by the attorney.

Other States

Although it has not yet risen to the level of a national trend, several other states have seen constitutional attacks on certain aspects of their respective workers’ compensation systems. 

In California, the constitutionality of the workers’ compensation lien system was recently raised in the case ofAngelotti Chiropractic v. Baker. 

Approximately 20 years ago, the entire Texas Workers’ Compensation Act withstood a constitutional challenge and, more recently, the Texas Office of Injured Employees Counsel released a few reports last year that pointed out the inequities of the alternative dispute resolution program. 

In Tennessee, there have been some unsuccessful constitutional attacks on other parts of the workers’ compensation statute (i.e. multipliers and the Medical Impairment Registry program) but not the Exclusivity Doctrine. 

Approximately 6 years ago In Alabama, an employee filed a motion seeking to have the $220 cap for permanent partial benefits deemed unconstitutional.  The judge denied the motion but stated in his Order that the cap set 23 years prior basically guarantees poverty for claimants and their families.  The judge further stated that "the trial courts see these workers leave our courtrooms week after week, without the ability to support themselves or their families."  The judge deemed the cap unfair but not unconstitutional and called upon the Alabama Legislature to make the change.  Several legislative attempts at increasing the cap have been made since that time but all have been unsuccessful. 

Moral of the Story

According to Rob Grace, “my prediction is that, in the end, nothing will come ofPadgett.  Maybe I will be proven wrong but I find it difficult to believe that our supreme court is going to basically throw out the entire workers’ compensation statute.”  Rayford Taylor agrees with Grace.  According to Taylor, “I do not see how mere allegations that certain provisions are different from what they once were invalidates the tort immunity of an employer whose only offense was complying with the statute.”  Even if Grace and Taylor are correct, there remain lessons that can be learned from the Padgett opinion and other such cases.  The more you reduce benefits to employees, the more susceptible to constitutional attacks your workers’ compensation system becomes.  In his now already infamous opinion, Judge Cueto referred to a First District Court of Appeal comment on the “minimum” requirements necessary for a workers’ compensation system to pass constitutional muster.  InBradley v. Hurricane Restaurant (an 18 year old case that interestingly involved both attorneys Taylor and Grace), the Court stated that workers’ compensation law continues to be a “reasonable alternative to tort litigation” when it “provides injured workers with full medical care and benefits for disability (loss of wage earning capacity) and permanent impairment regardless of fault, without the delay and uncertainty of tort litigation.”  In Judge Cueto’s opinion, the Florida system does not meet this minimum.  Does yours?

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About the Author

This article was written by Michael I. Fish, 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 & Holden 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 atmfish@fishnelson.com or any firm member at 205-332-1448.

The Division is accepting public comment on planned revisions to the PLN‐11 (Notice of

Disputed Issue(s) and Refusal to Pay Benefits). The proposed new form provides an area for

the insurance carrier to check the appropriate box to indicate which issue (extent of injury,

disability, or entitlement to death benefits) that is being disputed. The form also provides a

definition for “disability” for the injured worker. There are also minor revisions to update and

clarify the instructions, including a “caution” for insurance carriers to “explain the reason(s)

for disputing the issue in plain language without unnecessary use of technical terms,

acronyms, and/or abbreviations.” The instructions also include the following cautionary

statement: “Disputes must be based on the information the carrier has obtained or verified.”

While relatively minor, the above changes exhibit an apparent effort by the Division to

encourage carriers to provide more clear and concise language in its disputes so that the

injured worker understands exactly what is being disputed. We have always discouraged the

use of acronyms in a PLN‐11; best practice is to always use full terms so that a claimant is on

notice of what, exactly, the carrier is disputing. For example, instead of disputing extent of

injury to “CTS” or “lumbar DDD,” the carrier should spell out that it is disputing carpal tunnel

syndrome and lumbar degenerative disc disease. Likewise, instead of disputing disability

based on a “valid BFOE,” the carrier should state it is disputing disability pursuant to a bona

fide offer of employment tendered by the employer. As for the Division’s instructions

requiring that “disputes must be based on the information the carrier has obtained or

verified,” we should take this as a reminder that it is best practice for the carrier to document

its claim file as early as possible with written and verified evidence supporting the basis for

its dispute. In other words, don’t wait until a BRC is set to take and transcribe a recorded

statement, obtain medical records for a pre‐existing injury, or obtain a hard copy of a

toxicology report.

The revised form is currently available on the Texas Department of Insurance website, and the

public comment period closes Wednesday, October 1, 2014 at 5 p.m. Public comments may

be submitted by e‐mail, snail mail, or personal delivery to: Texas Department of Insurance,

Division of Workers’ Compensation, Maria Jimenez, Workers’ Compensation Counsel MS‐4D,

7551 Metro Center Drive, Suite 100, Austin, Texas 78744‐1645; Email:

InformalRuleComments@tdi.texas.gov.

The Division made minor changes to its DWC‐26 (Request for Reimbursement of Payment

Made by Health Care Insurer) and DWC‐69 (Report of Medical Evaluation). The revisions to

2

the DWC‐26 replace the term “ICD‐9” with the term “diagnosis code,” in order to facilitate

transition from ICD‐9 coding to ICD‐10 coding for workers’ compensation medical billing,

processing, and reporting. (ICD‐9 and ICD‐10 refer to the 9th edition and the 10th edition,

respectively, of the International Classification of Diseases, Clinical Modification and

Procedure Coding System.) Regarding the DWC‐69, the Division has added instructions for

injured employees.

The finalized forms are available on the Texas Department of Insurance website and are

effective January 1, 2015.

The US Drug Enforcement Administration (DEA) has reclassified hydrocodone combination

drugs from Schedule III to Schedule II in the Schedule of Controlled Substances, effective

October 6, 2014. This reclassification change impacts all physicians and pharmacies, including

drugs prescribed and dispensed in the Texas workers’ compensation system. Hydrocodone

combinations are the most frequently prescribed drugs in the Texas workers’ compensation

system.

This change has no direct impact on the application of DWC’s pharmacy closed formulary.

However, prescriptions for Schedule II drugs have specific requirements, and the

reclassification will result in changes to the physician prescription process for hydrocodone

combinations. For example, physicians may not delegate to advance practice nurses and

physician assistant’s authority to prescribe these drugs outside of a hospital or hospice setting,

nor may they “call in” prescriptions for these medications to pharmacies (except in

emergencies, in which case oral transmission must be followed up with written prescription

within seven days). In addition, physicians must use official prescription pads from the Texas

Department of Public Safety (DPS) for written prescriptions; or if e‐prescribing, must use a

certified Electronic Prescribing of Controlled Substances (EPCS) vendor. Most significantly in

our context, physicians may not refill prescriptions of these drugs without a patient visit or

consultation, and prescriptions may be issued for a maximum 90‐day period (three 30‐day

prescriptions to be written at one time). Refills are to be filled on a “not before date” written

on the prescription note by the prescriber. Claimants and pharmacies are encouraged to work

with the physician to resolve any issues regarding these changes when prescribing or

attempting to fill prescriptions for hydrocodone combinations.

Takeaway: Hydrocodone medications will become triple‐script medications, and an injured

worker will have to have a doctor’s office visit to get the script.

The Division has increased the maximum weekly benefit rate for income benefits from $850

to $861, and has increased the minimum weekly benefit rate from $127 to $129. The new

weekly benefit rate maximums and minimums are applicable for dates of injury from

October 1, 2014 through September 30, 2015.

The new maximum and minimum weekly benefit rates will not affect dates of injury prior to

October 1, 2014, as the maximum weekly income benefit in effect on the date of injury is

applicable for the entire time that the benefit is payable. Tex. Lab. Code Section 408.061(g).

A table showing maximum and minimum weekly benefit amounts for dates of injury occurring

from January 1, 1991 through the present is available on the Texas Department of Insurance

website at http://www.tdi.texas.gov/wc/employee/maxminbens.html.

It is a generally recognized fact that the statute and Division rules provide insurance carriers

an absolute right to an RME to address an opinion of a designated doctor. Tex. Lab. Code

Section 408.0041(f); 28 Tex. Admin. Code Section 126.5. However, in some cases, Hearing

Officers are declining to keep the record open to allow opportunity for the insurance carrier

to obtain a post‐DD RME to address a newly amended DD report (received in response to a

Hearing Officer’s request for clarification made in the course of an ongoing proceeding), on the

basis that the carrier “failed to use due diligence.”

For example, a recent Appeals Panel decision addressed a situation in which the self‐insured

had tried to obtain an RME addressing a DD’s amended report. The Hearing Officer has sent

the DD a letter of clarification, which led to the DD re‐examining the Claimant and amending

his prior report with respect to MMI/IR. The Hearing Officer gave the parties the opportunity

to respond to the DD’s report, and the self‐insured responded and requested additional time

so that an RME doctor could be obtained. The Hearing Officer denied the self‐insured’s request

to hold the record open for an RME report, citing that the self‐insured “failed to exercise due

diligence in seeking and obtaining an alternate IR although the self‐insured was fully aware

that the designated doctor had not rated the entire compensable injury prior to the CCH.” The

self‐insured appealed, contending it was denied procedural due process because it was not

granted additional time to obtain an RME doctor to opine on the DD’s amended report. The

Appeals Panel found the Hearing Officer did not abuse his/her discretion in denying the selfinsured’s

request to leave the record open to obtain the RME. Appeals Panel Decision (APD)

140722, decided June 5, 2014.

We could not find any “due diligence standard” in the rules or statute allowing for post‐DD

RMEs. We know, because we looked. Nevertheless, we must live with the cards we are dealt,

and are including this case in this month’s newsletter as a cautionary tale: in any case in which

you believe a post‐DD RME will be necessary or helpful to the carrier’s case, it’s best to

proceed with the request as soon as possible to ensure the carrier’s statutory right to an RME

is preserved. This is always good practice, regardless.

Decedent, Gerald Hallquist, worked as a laboratory technician for E.I. Dupont de Nemours (hereinafter Dupont) from 1968 until his retirement in 1998.  Between 1977 and 1982, he worked in the quality control lab with liquid chemicals including benzene.  He wore safety gloves and a uniform supplied by Dupont.  When working with certain chemicals, the decedent was required to wear additional protective clothing. 

            Prior to his death on June 7, 2010 at the age of 76, decedent filed a claim petition alleging that his exposure to chemicals led to multiple myeloma.  Decedent gave a deposition de bene esse in which he stated that he tested benzene, but he did not state how often that occurred during the five year period he worked in the quality control lab.  He said that he knew what benzene smelled like, but he never quantified the number of times he smelled this chemical while working in the lab.  There were chemical spills when he worked in the lab, but he was not sure of any specific chemical involved. The decedent testified that he smoked a pack of cigarettes between the ages of 19-21. 

Mary Hallquist, decedent’s widow, filed a dependency claim petition against Dupont.  Petitioner produced Dr. Leon Waller, a primary care physician with no subspecialty, as an expert in internal medicine.  Dr. Waller gave an opinion that the decedent’s multiple myeloma was caused by his “long-term exposure” to benzene during the period of time in the quality control lab.  At first, he said that the exposure would have to occur on a daily basis during this time period for it to have caused the decedent’s illness.  He later testified that the exposure needed to have occurred once or twice a week, three times a week, or at least a few times a week.  Dr. Waller conceded that he did not know how many times the decedent worked with benzene or how many times he smelled it.  However, he said the exposure had to have occurred 100 to 150 times a year for him to draw causal relationship between benzene exposure and multiple myeloma.

            Respondent produced a toxicologist, Dr. Shanna Collie Clark, Ph.D, as its expert.  She said that benzene is a carcinogen, but there is no conclusive research showing that benzene exposure causes multiple myeloma.  It is related to leukemia, however.  Dr. Clark testified that benzene as a causal factor for leukemia would be a ten, but only a one or a two for multiple myeloma.  She further said that there was insufficient epidemiological evidence to draw causation, and there was a notable lack of exposure as well.  Dr. Clark said that the decedent wore gloves and protective clothing.  Samples were placed by another individual under a hood and decedent took “one drop, one c.c. in a syringe into a closed system while he’s testing it.” Dr. Clark also testified that benzene exposure cannot be linked to a multiple myeloma condition that occurs 25 years down the road. 

            The Judge of Compensation ruled for respondent and dismissed the case.  The Judge noted that the decedent used a closed instrument, a syringe, injecting the test material into a closed machine in a room that had ceiling fans throughout the room, sucking vapors out of the room.  Petitioner appealed to the Appellate Division, which affirmed the dismissal of this case. 

            The Appellate Division observed that petitioner did not offer proof that the decedent was exposed to benzene 100 to 150 times per year, which even her own expert Dr. Waller said was necessary to draw causation.  Blood tests taken after the alleged exposure from 1977 to 1982 showed no evidence of benzene exposure in the decedent.  The Court noted that the decedent never quantified the amount of his exposure and never testified that benzene was spilled near him.  For these reasons, the Appellate Division affirmed the dismissal of this case.

            This case can be found at Hallquist v. E.I. Dupont de Nemours, A-6223-12T2 (App. Div. October 10, 2014).  The case was successfully defended by Stephen Fannon, Esq., a shareholder with Capehart Scatchard, along with Ashley Mollenthiel, Esq. on the brief with Mr. Fannon.

On October 10, 2014, the Alabama Court of Civil Appeals released its opinion in the case ofArthur Barney v. Elizabeth Bell, as personal representative of the estate of Maurice Bell, deceased, and William Clay Teague. This case was before the Court for a second time, because Barney filed an Application for Rehearing after the Court ruled against Barney on July 18, 2014. A summary of the facts of the case and the Court of Appeals’ first opinion can be foundhere. On rehearing, the Court reversed itself and the trial court, holding that Barney’s attorneys were not entitled to summary judgment on Barney’s claim that they committed malpractice by retaining an excessive attorney’s fee on the workers’ compensation claim. The Court also held that Barney was entitled to partial summary judgment on that claim. The Court entered judgment in favor of Barney in the amount of $6,375.00, and remanded the case to the trial court for a determination of whether Barney is entitled to additional compensatory of punitive damages.

In reaching its decision, the Court noted that the attorneys failed to present any expert testimony regarding the reasonableness of their fees, and that they were therefore not entitled to summary judgment on Barney’s malpractice claim. The Court further noted that there was no factual dispute as to whether the attorneys breached the standard of care, thus committing malpractice, by keeping too much of Barney’s workers’ compensation settlement for their fee.

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ABOUT THE AUTHOR

This article was written by Charley M. Drummond, Esq. of Fish Nelson & Holden, LLC. Fish Nelson & Holden is a law firm located in Birmingham, Alabama dedicated to representing employers, self-insured employers, and insurance carriers in workers’ compensation cases and related liability matters. Drummond 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. If you have questions about this article or Alabama workers’ compensation issues in general, please feel free to contact the author at cdrummond@fishnelson.com or (205) 332-3414.