State News

By:  Edward Hummer (Associate Attorney - Santa Rosa)

On March 21, 2022, the California State Senate's Committee on Labor, Public Employment and Retirement voted  4 - 1 to advance SB 1127, authored by Sen. Toni Atkins (D - San Diego). If passed, this bill would amend Labor Code Section 5402 to shorten the time within which to investigate a claim from 90 days to 60 days. If a claim is not denied within 60 days, it would be presumed compensable. The amendment would further reduce the investigation time for claims involving safety officer presumptions (Labor Code Sections 3212 through 3213.2) to 30 days. 

The bill would also amend Labor Code Section 4656 to provide first responders covered by the Labor Code Section 3212.1 cancer presumption with additional temporary disability benefits. The proposal would provide covered employees with up to 240 weeks of aggregate disability benefits for injuries occurring on or after 1/1/2023. 

Particularly concerning to employers and claim administrators is a provision in the bill that would add Section 5414.3 to the Labor Code. This proposed section would impose a penalty for "unreasonably" denying first responder claims subject to the Labor Code Section 3212 through 3213.2 presumptions. The penalty would be five times the amount of the benefits "unreasonably delayed", with a $100,000.00 cap. The determination of whether a claim denial was "unreasonable" would be left to the WCAB. 

A similar proposal introduced in the California Assembly in 2021 died in committee. The 2021 proposal was evaluated by the CWCI and the RAND Corporation. Both evaluations determined that shortened investigation times and faster claim decisions did not meaningfully assist workers and may actually lead to more provisional claim denials. 

The legislation is opposed by a coalition of business interests including the Family Business Association. The opponents argue that the legislation does not provide sufficient time to investigate claims, creates new penalties that make taxpayer funded presumption claims dangerous to investigate, and increases costs because it more than doubles temporary disability benefits. 

The next hearing on the proposed legislation went forward on April 4, 2022 in the Senate Appropriation Committee. 

Learn more here:  https://highlights.hannabrophy.com/post/102hlsf/committee-approves-proposal-to-shorten-investigation-time-for-workers-compensatio

Written by: Lindsay Underwood

The North Carolina Court of Appeals issued a new decision concerning medical treatment, and what evidence is necessary to prove causation and establish compensability.

In Mahone v. Home Fix Custom Remodeling, the claimant worked for a home remodeling company. On July 24, 2018, the claimant climbed into the attic of a potential customer to take measurements for an estimate and the floor beneath him collapsed. The claimant fell twenty feet and landed in the staircase area of the lower level of the home. He suffered severe injuries to his cervical and thoracic spine, and fractured ribs on his left side. When EMS responded to the injury, the claimant was unconscious. The claimant underwent an immediate surgery for his spinal injuries. Following surgery, a cognitive screening and mental assessment was completed to evaluate for a possible traumatic brain injury (TBI). It was determined inpatient neuropsychological services were not warranted, though the claimant was provided with verbal and written information regarding treatment for a mild TBI. On November 2, 2018, Dr. Lance Goetz wrote a letter stating the claimant was hospitalized and under his care. In that letter, Dr. Goetz stated the claimant had incurred a traumatic brain injury with loss of consciousness. Dr. Goetz was not deposed as part of the case, and the physician who was deposed did not provide an opinion on the TBI or causation either in his records or during his testimony.

Defendants denied the claim on the basis that there was no employer/employee relationship. At the Deputy Commissioner level, the main issues presented were whether the claimant was permanently and totally disabled, and what attendant care the claimant was entitled to. Following the hearing, Defendants accepted compensability of the spine, rib fractures, and hematoma of the parietal bone. The TBI was not accepted. The Deputy Commissioner found that claimant had failed to present evidence regarding how many hours per day he required attendant care, or the appropriate rate of care. Further, it was not yet possible to determine whether the claimant met the requirements for permanent total disability. The claimant appealed to the Full Commission. The Commission entered an Opinion and Award finding the claimant had not presented sufficient medical evidence of causation linking his TBI to the July 24, 2018 incident, and, thus, the claimant was not entitled to medical compensation for the treatment of his TBI. The Commission found the claimant required attendant care but there was insufficient evidence in the record on which to base such an award. Both parties appealed to the Court of Appeals.

The Court ultimately found the Commission applied the incorrect legal standard in denying that the claimant’s TBI was not compensable. The Court opined the Commission erred in stating that the claimant was required to present expert testimony, either at a hearing or deposition, to a reasonable degree of medical certainty, that the TBI was causally related to the accident. The Court held the appropriate standard is that the claimant is required to present expert opinion evidence, not necessarily in the form of testimony, that it is likely that the accident caused the claimant’s injury. Thus, the letter written by Dr. Goetz in which he opined that the claimant’s TBI was likely the result of his July 24, 2018 incident was sufficient to establish causation. The Court reversed the Commission’s Opinion and Award with respect to the compensability of the claimant’s TBI and remanded to the Commission to make findings and conclusions applying the correct standards of proof.

Implications for Defendants

Though we do not have the final decision on remand, this case is a good reminder that if you want to contest compensability or causation of a specific aspect of the claim, you must have evidence to combat the claimant’s evidence, even if said evidence is in the form of a letter or a medical record. In this case, it was likely assumed that since Dr. Goetz did not testify, and did not provide an opinion specifically to a reasonable degree of medical certainty, that his causation opinion would not be sufficient. The Court of Appeals clearly disagreed, and specifically noted that testimony is not required by the Court to establish causation. All that is necessary is opinion evidence. In the event you are presented with a medical report or correspondence from a physician, in which it appears causation is established, even if not to a reasonable degree of medical certainty, it is a necessary next step for defendants to obtain counter evidence, and take deposition testimony of both the claimant’s physician, and any IME or 2nd opinion physician, to support the defense.

There are few cases in the Division that discuss penalties for late payments of permanency awards, so the recently published Appellate Division decision in Ripp v. County of Hudson, No. A-2972-20 (App. Div. June 3, 2022) should be studied by workers’ compensation practitioners.

The Ripp case was not about delayed temporary disability benefits, which are subject to a potential 25% penalty for delays over 30 days.  This case was about a delay in paying a permanency award on a total disability claim. On January 26, 2021 the Judge of Compensation entered an Order for Total and Permanent Disability.   The County was required to pay Ripp the sum of $173,480 for accrued permanency benefits within 60 days of the entry of the Order followed by weekly benefits for life. The County failed to pay the Order within 60 days. The County made the payment on the 76^th day after the award, a delay of 16 days.   

Ripp filed a motion to enforce the Order.  He sought simple interest on the settlement and an additional assessment of 25% of the moneys due.  The County explained that delays were due to the failure of the third party administrator to submit the payment request in a timely manner, changes in adjuster assignment on the case, and delays due to the pandemic.

There were also substantial delays before the Order was entered in terms of the County’s formal approval of the total disability award.  Ripp and his wife wrote to the judge to complain about how long it was taking the County to get authority to settle the case.  The Judge of Compensation noted that the delays had a severe effect on the family, which had no wages for four years. This also had an impact on the couple’s disabled child.  Although the County had agreed in early 2019 that Ripp was totally disabled, authority did not come through for many months.  The Judge of Compensation noted that the failure of the County to obtain authority further delayed the computation of Ripp’s “average current earnings” calculations from the Social Security Administration. That information was necessary to complete the final court paperwork.

In deciding the appropriate penalty, The Judge of Compensation considered the delays in getting approval for the settlement as well as the 16-day delay in paying the final Order.  The judge relied on N.J.A.C. 12:235-3.16 in assessing against the County an additional 25% of the accrued payment amount due or $43,370.  The County appealed.

The Appellate Division began by stating, “The Workers’ Compensation Act does not require that payment of settlement benefits must be made within a specific period of time.”  Yet N.J.S.A. 34:15-28 (cited by the Court) states: 

Whenever lawful compensation shall have been withheld from an injured employee or dependents for a term of sixty or more days following entry of a judgment or order, simple interest on each weekly payment for the period of delay of each payment may, at the discretion of the Division, be added to the amount due at the time of settlement.

Practitioners generally advise clients that all permanency awards must be paid within 60 days.   The Court also observed that N.J.S.A. 34:15-28.2 provides:

If any employer …. Fails to comply with any order of a judge of compensation ….. a judge of compensation may, in addition to any other remedies provided by law:

a) Impose costs, simple interest on any moneys due, an additional assessment not to exceed 25% of moneys due for unreasonable payment delay, and reasonable legal fees, to enforce the order, statute or regulation;

b) Impose additional fines and other penalties on parties or counsel in an amount not exceeding $5,000 for unreasonable delay, with the proceeds of the penalties paid into the Second Injury Fund;

The New Jersey Division of Workers’ Compensation added N.J.A.C. 12:235-3.16 (h) (1) (i) which allows a judge to “impose an additional assessment not to exceed 25 percent on any moneys due if the judge finds the payment delay to be unreasonable.”

There are two key parts to the Appellate Division decision in the Ripp case.  First, the Appellate Division fully endorsed the Judge of Compensation’s right to assess a 25% penalty in this case.  Second, the Court clarified that only the 16-day delay could be considered for the penalty.  The Court did not endorse any penalty for failure to obtain authority in a timely manner. The Court requested that the Judge of Compensation reconsider an appropriate penalty “for the minimal, yet ‘unreasonable payment delay’ in this case.”

For practitioners, this decision is a strong reminder that awards must be paid within 60 days, notwithstanding the statement in this decision that the New Jersey Act does not prescribe a specific time period to pay an award.  The practice in place in all insurance companies, third party administrators and self-insured entities is to make sure awards get paid within 60 days. 

This case sends a message that if a motion to enforce is filed, the employer will pay not only simple interest but also potentially 25% on the total amount due – depending on how long the delay is.  While the Appellate Division made clear that it thought a penalty of $43,370 was too high for a 16-day delay, the Court did not provide guidance on what amount was too low.  The case has been remanded to the Judge of Compensation to reconsider a new penalty amount on the County. 

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

John H. Geaney, Esq., is a Shareholder and Co-Chair 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.

What happens if an employee dies during the pendency of the open and ongoing workers’ compensation claim? The answer to this depends on a few factors. The first consideration is when the petitioner died (during treatment/ before permanency exams, after permanency exams, or after an Order Approving Settlement for permanency has been entered). The second consideration is whether the cause of death is, or is not, work related.

Below are various potential situations regarding dependency/ death cases, and how we would recommend handling each scenario.

Scenario 1: Petitioner dies from a cause not related to his workers’ compensation injury while he is under authorized treatment. Permanency exams have not yet occurred on either side. Who gets paid benefits, and what type of benefits are they owed?

It is our general position in this scenario that all that is owed is a contribution to funeral expenses as set forth in N.J.S.A. 34:15-12(e) (up to $5,000). In almost all cases like this, it is difficult for a petitioner to prove permanency without permanency examinations.

There are exceptions of course. In certain circumstances (such as a case involving a truly catastrophic accident), permanency could possibly be assessed without permanency exams, but these circumstances are quite rare. In most cases, permanency cannot be assessed without permanency exams where the employee is examined and provides their current complaints.

Since permanency benefits are based on current complaints as provided to permanency experts and testimony or a settlement affidavit, it is difficult to assess permanency without permanency exams on both sides having occurred, and without current complaints given to permanency experts. Generally, permanency cannot be attributed in a case where petitioner was under ongoing authorized treatment when he passed away.

We generally maintain that an employee is not entitled to permanency if the employee was still in treatment and had not medically plateaued, since he cannot sustain his burden of proof that he sustained permanency from the work accident.

Case Study/ Example: Logan is treating for a work-related tendinopathy condition. Treatment is progressing with physical therapy. Logan dies from a non-work related motor vehicle accident halfway through physical therapy. Does the employer owe permanency? No, because there is no way to prove permanency. Who could say that Logan would have had permanency when treatment was not even finished?

Scenario 2: Petitioner died from a cause not related to his workers’ compensation injury after permanency exams have occurred. Who gets paid benefits, and what type of benefits?

The difference between Scenario 1 and Scenario 2 is that in this scenario, permanency can be reasonably assessed and negotiated, based on the permanency exams that have occurred on both sides and the expert reports. Therefore, in this case, permanency can be assessed and negotiated between the parties.

Pursuant to N.J.S.A. 34:15(12)(e), when an employee dies from a non-work related cause after permanency exams, permanency payments are paid to the decedent’s dependents.

This is supported by the case law of Cureton v. Joma Plumbing & Heating Co., 38 N.J. 326 (1962), where the parties both obtained permanency reports with both experts assessing disability.

Scenario 3: Employee dies during the course of authorized treatment due to the work-related incident, and the work accident is the cause of death.

First, we note that a dependency claim can be filed when death is caused directly or indirectly from a work injury and it does not have to be the sole or primary cause of death.  As long as the work accident is a contributing cause, there can be a valid dependency claim. Also of note is the statutory time period in which a dependency claim must be filed under N.J.S.A. 34:15-51, which states that a claim must be filed within two years of the date of the accident. In a dependency claim, the dependency claim petition must be filed within two years from the date of death.

The compensation to a dependent (once the individual is determined to be a dependent, subject to N.J.S.A. 34:15-13(f)) is based on 70% of the employee’s wages at the time of death.

Dependency interrogatories should be served on any individual filing a dependency claim petition, to investigate the nature or the relationship between decedent and potential dependent and to confirm that the individual qualifies as a dependent as defined by Section 13. Employers should obtain a copy of the autopsy report and death certificate. Information should also be obtained regarding decedent’s treating physicians.

Scenario 4: Employee dies after an Order Approving Settlement is entered.

After an employee passes away, the remaining permanency payments are paid to the dependents. Cureton v. Joma Plumbing & Heating Co., 38 N.J. 326 (1962), referenced above, holds that any permanency benefits that were accrued but not yet paid at the time of death become part of the estate.

But ongoing un-accrued permanency benefits owed to an employee after the date of death are paid to dependents. An individual has no “dependents” until after he has passed away.

Case Study/ Example: Joan gets an Award of 15% permanent partial disability on January 1, 2022. The date of last temporary disability benefits was January 1, 2021, so one year of accrued permanency benefits exists. Joan’s accrued permanency benefits are paid over 90 weeks. Joan dies on January 2, 2022 from a non-work related cause. Who gets the permanency Award? The estate gets the portion of the accrued amount for the dates of January 1, 2021 through January 2, 2022. The statutory dependents get the future payments due after January 2, 2022.

Employers must always keep in mind when and how an employee passes away, to determine potential exposure, and the type of benefits that may be owed, and to whom the benefits might be owed.

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

Maura Burk, Esq., is a Shareholder in Capehart Scatchard's Workers’ Compensation Group.  Ms. Burk concentrates her practice in the representation of employers, self-insured companies, third-party administrators, and insurance carriers in workers’ compensation matters.  If you have any questions or would like more information, please contact Ms. Burk at 856.840.4941 or by e‑mail at mburk@capehart.com.

Well, we don’t know yet. The position has remained unfilled since September, 2021 when Commissioner Cassie Brown left to accept Governor Abbott’s appointment as Commissioner of Insurance, a position that itself had been vacant since September 2020, following Commissioner Kent Sullivan’s resignation to return to the private sector. 

So after nine months, we wonder when a new Commissioner will be appointed to guide the Division into the future…although we must say that the Division seems to be humming along just fine without one.
 

Copyright 2022, Stone Loughlin & Swanson, LLP 

In response to our firm’s Public Information request, the Division has produced its records of activity by the Appeals Panel during 2021. In this past year, the panel has resolved 2,108 appeals, up 132 cases over the 1,976 appeals resolved in 2020.

Lest you wonder how six judges could possibly handle and resolve so many appeals, let us look a bit closer at the numbers.  

Of those 2,108 appeals resolved, 2,005 became final by operation of law as a result of the Appeals Panel taking no action and allowing the ALJ’s Decision and Order to become the final decision of the Division.

Using a calculator so as not to rely solely on our imperfect math skills, we note that the Appeals Panel wrote decisions in only 103 cases, up significantly from the 60 decisions written in 2020, but still an average of only two decisions per week.  

Of those 103 Appeals Panel Decisions, eight affirmed all issues and 95 reversed and/or remanded issues back to the ALJ. So, in 2021, the odds that the panel would reverse or remand any given Decision and Order were about 4.5%, up from 1.97% the previous year.

Copyright 2022, Stone Loughlin & Swanson, LLP 

We have recently learned that Benefit Review Officers Nora Astorga and Elizabeth Benavides, both assigned to the Houston East Field Office, retired this month. We are sorry to see these knowledgeable and effective BROs leave the Division, however, we extend them our best wishes in whatever new adventures they choose to pursue in the future. 

We have no information concerning replacements for Ms. Astorga and Ms. Benavides. There are currently no job postings on the Division’s website for BRO positions. For now, disputes in the Houston East Field Office which would otherwise be assigned to these BROs are being handled by BROs in other Division field offices. 

Copyright 2022, Stone Loughlin & Swanson, LLP

You may recall from past issues of the Compendium that we have expressed our concern that the number of designated doctors in the workers’ compensation system continues to decline. In the September 2021 issue we reported that the number of designated doctors in the system had dropped to a total of 272, only 75 of which were physicians.

DWC has announced another presentation concerning proposed changes to the designated doctor program which will allow system participants to discuss the second informal proposal on amendments to 28 Texas Administrative Code Chapter 127 and 28 Texas Administrative Code §180.23. 

The presentation will be held via Zoom on June 7, 2022 from 1:30 to 2:30 p.m. Slides will be posted on the TDI website on the day of the presentation. The informal proposal together with associated documents will be posted on June 1, 2022 on the TDI website.

You may join the Zoom Meeting as follows:
https://TDI-Texas.zoom.us/j/96612443624
Meeting ID: 966 1244 3624
One tap mobile
+19294362866, 96612443624# US (New York)
Dial by your location
+1 929 436 2866 US (New York)
Meeting ID: 966 1244 3624
Find your local number: https://TDI-Texas.zoom.us/u/abfriIPP3u

Copyright 2022, Stone Loughlin & Swanson, LLP

The Division intends to amend Texas Administrative Code §132.17 (Rule 132.17) concerning Denial, Dispute, and Payment of Death Benefits. The proposed amendments incorporate updates for plain language and “agency style” and clarify a Carrier’s deadlines to file disputes over eligibility for death benefits. The proposed rule is available here. 

Comments concerning the proposed rule may be emailed to the Division at RuleComments@tdi.texas.gov. 

Copyright 2022, Stone Loughlin & Swanson, LLP

In a disciplinary order dated May 23, 2022 the Division ordered William R. Francis, Jr., M.D. to pay an administrative penalty of $12,000.00 and attend an Ethics and Boundaries Assessment Services course and workshop. The Division found that Dr. Francis authorized and submitted CMS-1500 billing forms for 6,487 manual  muscle tests (MMT) and functional capacity evaluations (FCE) in which he listed himself as the rendering provider. The Division found, however, that Dr. Francis was neither in the room where the examinations were performed nor did he supervise the technicians performing such examinations.
 

Copyright 2022, Stone Loughlin & Swanson, LLP