State News

DWC offers educational resources to help avoid penalties

Movin’ on up!

Movin’ on Up!

We’ve learned that Angel Hendricks, a Proceedings Resolution Officer (PRO) in the TDI-DWC Tyler field office, has been promoted to Benefit Review Officer (BRO) and will replace Olivia Turner, who is embarking on a well-deserved retirement. 

Ms. Hendricks is to start in her new position on June 1, and we are delighted to begin working with her in that capacity. Congratulations Ms. Hendricks!

Copyright 2024, Stone Loughlin & Swanson, LLP

Division reminds carriers of their obligation to pay for preventative treatment 

On April 23, 2024, TDI-DWC’s General Counsel, Kara Mace, issued a memorandum to system participants regarding preventative treatment claims handling. In it, Ms. Mace stated that the Division “would like to remind insurance carriers of the rules associated with preventative treatment related to a physical injury and workers’ compensation claims handling.”

The memo notes that preventative treatment “may include medications such as rabies vaccines, tetanus shots, and post-exposure prophylaxis that are prescribed by a health care provider.” It also states that “an insurance carrier must follow treatment guidelines and pay for specified pharmaceutical services sufficient for the first seven days following the date of injury, regardless of issues of liability for or compensability of the injury,” citing Texas Labor Code §413.011 and DWC rules 134.501 and 137.100.
 
Rule 134.501, titled Initial Pharmaceutical Coverage, provides in part that:

The insurance carrier . . . shall pay for specified pharmaceutical services sufficient for the first seven days following the date of injury, regardless of issues of liability for or compensability of the injury that the carrier may have, if, prior to providing the pharmaceutical services, the health care provider  . . . obtains both a verification of insurance coverage, and an oral or written confirmation that an injury has been reported.

. . . Specified pharmaceutical services are prescription drugs and over-the-counter medications prescribed by a doctor that cure or relieve the effects naturally resulting from the compensable injury, promote recovery, or enhance the ability of the employee to return to or retain employment.

Ms. Mace ends the memo by noting that “failure to properly handle preventative treatment claims under these rules and other applicable laws may result in the assessment of administrative penalties not to exceed $25,000 per day per occurrence.”
 

Copyright 2024, Stone Loughlin & Swanson, LLP

You Can't Do That Either! 

ALJ abused discretion by relieving unrepresented claimant from effect of Benefit Dispute Agreement

In Appeal No. 240113, the TDI-DWC Appeals Panel has taken the unusual step of reversing an ALJ’s decision and rendering a new one on the grounds that ALJ abused his/her discretion by relieving a claimant from the effects of a DWC-24. 

In the DWC-24, the claimant and carrier agreed that the compensable injury extends to include right wrist volar carpal ganglion cyst and they agreed to adopt the date of MMI and the 2% impairment rating assigned by a designated doctor. Later, however, the claimant argued at a contested case hearing that she should be relieved from the effects of the agreement because she cannot read English and the ombudsman assisting her did not fully explain the agreement to her.

The ALJ found that no fraud or misrepresentation was involved in procuring the agreement and the claimant was provided with sufficient time to review the agreement before she signed it. However, the ALJ found that good cause existed to relive the claimant from the effects of the agreement because the 2% IR assigned by the designated doctor was a result of misapplication of the Guides to the Evaluation of Permanent Impairment. 

But the Appeals Panel concluded that the calculation of the claimant’s IR required rounding, which requires medical judgement, so the evidence did not support the ALJ’s determination that the 2% IR assigned by the designated doctor was a result of misapplication of the Guides. Accordingly, the Appeals Panel reversed the ALJ’s decision and rendered a new decision that there is no good cause for relieving the claimant from the effects of the agreement and it is final and binding. 

Copyright 2024, Stone Loughlin & Swanson, LLP 

You Can't Do That! 

Trial judge abused discretion by refusing to abate personal injury suite and consolidating it with judicial review of TDI-DWC decision

This month the 14th Court of Appeals in Houston agreed with arguments by Stone Loughlin & Swanson, LLP and other firms that Harris County District Court Judge Fredericka Phillips abused her discretion by (1) refusing to abate a personal injury action pending judicial review of a TDI-DWC decision on the worker’s employment status and (2) consolidating the two actions. 

In our law firm’s 20-year history we’ve seen some bizarre workers’ compensation claims, but this one might just take the cake. It's through-the-looking-glass procedural history began when, in September 2021, 16-year-old Romny Sanchez joined his uncle, Leonel Yanez, on a job providing remediation services to victims of Hurricane Ida in Louisiana. Both men were injured while riding as passengers in a van driven by Joe Saavedra, who fell asleep and crashed into a light pole. Saavedra was an employee of All Repair and Restoration, LLC, and Sanchez and Yanez filed a personal injury suit against All Repair in Harris County district court alleging everything but the kitchen sink -- asserting claims for negligence, vicarious liability, fraud, civil conspiracy, gross negligence, intentional infliction of emotional distress, and violations of the Fair Labor Standards Act and the Texas Payday Act. All Repair asserted the affirmative defense that Sanchez and Yanez were its employees and their exclusive remedy is workers’ compensation benefits under All Repair’s policy with National Casualty Company. 

Sanchez and Yanez disputed that they were All Repair’s employees, so National, represented by this firm, initiated dispute resolution proceedings at the TDI-DWC to determine their employment status. Even though the facts were largely the same for both men, the Division refused National’s request to hear the cases together. Instead, it insisted on conducting two separate contested case hearings by two different ALJs. And, as could be predicted, the ALJs reached different conclusions. The ALJ presiding over Yanez’ case concluded that he was All Repair’s employee, but the ALJ presiding over Sanchez’ case concluded that he was not All Repair’s employee. All Repair then filed a petition for judicial review of the decision regarding Sanchez. 

At Sanchez’ request, and over the objections of National and All Repair, Judge Phillips consolidated the two actions and denied a motion to abate the personal injury action pending resolution of the judicial review action. National and All Repair then took the extraordinary step of filing a petition for writ of mandamus with the court of appeals. 

The court of appeals found that Judge Phillips abused her discretion on both counts. It directed her to vacate her order of consolidation because, among other things, “a vast portion of the evidence to be expected in the personal injury suit is likely to be inadmissible in the judicial review suit due to the limited nature of the proceeding.” It also directed her to abate the personal injury suit pending the outcome of the petition for judicial review, citing its prior decisions in In re Tyler Asphalt & Gravel Co. and In re Luby’s Cafeterias, Inc. which hold that abatement is required under such circumstances. 

Copyright 2024, Stone Loughlin & Swanson, LLP 

Good riddance: Mastermind of workers’ compensation fraud scheme headed to prison for decades

At SLS, we focus on news of workers’ compensation law in the great state of Texas, but this news from California (of all places) is too good to pass up. A big fish has gotten his just desserts. 

Peyman Heidary, a chiropractor who reportedly referred to himself as “the Godfather” and “Number One,” was sentenced this month to 54 years, 8 months in state prison, and ordered to pay more than $23 million in fines, for his role in overseeing a massive workers’ compensation fraud scheme in California. 

Heidary reportedly owned and oversaw a network of sham medical clinics to generate fraudulent billings to workers’ compensation insurance carriers. A non-attorney, he also reportedly controlled the day-to-day operations of sham law firms. His sham law firms would interview injured workers and direct them to one of his sham clinics where they would be subjected to a barrage of treatments, regardless of need, including massage, chiropractic manipulation, acupuncture, and psychiatric evaluation. After the clinics wrung out the maximum number of visits, they would discharge the patients regardless of their medical status. 

A jury convicted Heidary of 68 counts of insurance fraud, conspiracy, and money laundering. During the sentencing hearing on April 12, 2024, Judge Charles Koosed noted that Heidary possessed deep knowledge of the workers’ compensation system, stating “[Heidary] took advantage of that knowledge based on greed.” 

Copyright 2024, Stone Loughlin & Swanson, LLP

 
Should you have any questions or wish to discuss any related matters, please contact us at your convenience.

H. Douglas Jones, Esq. – djones@jsbattorneys.com, 859.594.4200
Margo Menefee, Esq. – mmenefee@jsbattorneys.com, 859.594.4200