State News : Texas

The Appeals Court in El Paso held that the student worker provision required upward adjustment of the student’s calculated average weekly wages, but the statute capping benefits for UT System part-time employees capped his benefits at 60% of the adjusted average weekly wage.  UT argued that the student worker wage adjustment provision in Texas Labor Code §408.044 did not apply because §503.021(b) provisions applicable to part-time employees of the UT System cap any benefits recovery at 60%.  The court found that the two provisions were not in conflict, noting that Chapter 503 explicitly incorporated by reference nearly all provisions of Chapter 408, including the student worker adjustment provision. Ferrell v. The University of Texas System, No. 08-17-000065-CV, 2019 WL 2148089 (Tex. App.—El Paso, May 17, 2019). 

The Appeals Court in Beaumont held that an employer, AmeriGas, was covered by a workers’ compensation policy, and therefore, entitled to assert the exclusive-remedies defense.  The injured workers sued AmeriGas for damages sustained in a work-site explosion.  AmeriGas asserted a general denial and the exclusive remedy defense under the Texas Workers’ Compensation Act.  The injured workers argued that AmeriGas did not provide workers’ compensation insurance, noting that the insurance policy did not specifically list AmeriGas Propane, L.P. in the policy.  AmeriGas argued that it was due to an administrative error that its name was not included in the policy.  It provided an endorsement naming AmeriGas as a named insured under the policy as well as evidence showing that it paid premiums and that its payroll and employment information was used in determining the policy price.  Further, AmeriGas provided evidence that the policy paid workers’ compensation benefits to an employee who was injured in the explosion.  The court found that AmeriGas provided sufficient evidence to reflect that the parties’ true agreement was to cover AmeriGas as an insured, but that due to a mutual mistake, the policy document did not reflect the parties’ true intent.  Therefore, AmeriGas was entitled to the exclusive-remedies defense provided under the Texas Workers’ Compensation Act. AmeriGas Propane, L.P. v. Aboytes-Muñiz, No. 09-18-00122-CV, 2019 WL 2127750 (Tex. App.—Beaumont, May 16, 2019) (memorandum opinion). 

-  Copyright 2019,Erin Shanley, Stone Loughlin & Swanson, LLP.

On May 27, the Texas House and Senate signed the bipartisan Senate Bill 2551.  The bill provides that a firefighter or emergency medical technician suffering from cancer resulting in death or disability is presumed to have developed the cancer while in the course and scope of employment if the worker regularly responds to scenes involving the documented release of radiation or “known or suspected carcinogens.” Cancers that are presumed to be “occupational” are cancers that originate in the stomach, colon, rectum, skin, prostate, testes or brain, non-Hodgkin’s lymphoma, multiple myeloma, malignant melanoma, and renal cell carcinoma.  The bill additionally allows self-insureds to establish a pool for the payment of death benefits to first responders with compensable injuries.

The legislation awaits Governor Abbott’s signature.  If the bill is signed, it will take effect immediately.
 

-  Copyright 2019, Erin Shanley, Stone Loughlin & Swanson, LLP.

Senate Bill 1897, which would have expanded chiropractors’ scope of practice to allow them to go beyond the musculoskeletal system and to diagnose and treat disorder of the nervous system, failed to make it through committee.  The Senate Health and Human Services Committee heard testimony on the bill on April 29^th.  The chiropractors argued that because nerves are associated with the musculoskeletal system, one cannot treat one without affecting the other, so they needed to be permitted to treat the nervous system. The Texas Medical Association disagreed, arguing that this was akin to saying that treatment of the musculoskeletal system also requires treatment of the heart and circulatory system because the heart provides blood to the bone and muscles.  The Association also argued that treating neurological disorders was far beyond a chiropractor’s education and training, even for chiropractors designated as chiropractic neurologists by the American Chiropractic Neurology Board.  Sara Austin, MD, an Austin-based neurologist testifying in opposition to the bill, argued that adding neuro to chiropractors’ practice was not merely the addition of the nerves that may connect muscle tissue or bones.  Rather, “[i]t is the addition of the entire neurological system that includes the brain, spinal cord, and the regulation of many bodily functions beyond chiropractors’ education and training.”

-  Copyright 2019,Erin Shanley, Stone Loughlin & Swanson, LLP.

Another bill, House Bill 4300 (authored by Rep. Jim Murphy, R-Houston), would propose allowing lump sum settlements, provided that appropriate provision were made for Medicare set-asides and for taking care of deceased workers’ beneficiaries. 

As those in the Texas workers’ comp system are well aware, Texas does not allow claimants to receive lump sum settlements for medical benefits.  The prohibition has existed since the 1980s, when laws were passed to prevent what many saw as an excess in litigation as well as misuse of settlement funds by workers’ compensation claimants. 

Some employers asked law makers to remove the prohibition on lump sum settlements, so long as the arrangement provided for a Medicare set-aside, the plan was overseen by a corporate trustee or professional administrator, and that any remaining interest on the settlement reverted back to the claimant’s beneficiaries when the claimant died.  Others have criticized the bill, arguing that settlements could result in litigation, particularly if the lump sum turned out not to be large enough to cover a claimant’s long-term care.  Still others were concerned that the money would be used for unnecessary medical treatment, leaving inadequate resources for legitimate treatment.  Ultimately, other businesses, insurance, and some labor interests put up enough opposition against House Bill 4300 to convince legislators not to support it.  Like House Bill 750, the bill has been left pending before the House Business and Industry Committee.

-  Copyright 2019, Erin Hacker Shanley, Stone Loughlin & Swanson, LLP.

Texas is the only state in which employers may “opt out” of the workers’ compensation system.  Most construction contractors have opted out, and testimony taken at the House Business and Industry Committee hearing on April 9 referenced studies showing that only 40% of Texas construction workers are covered.  The number of employers in mining, utilities, and construction that subscribe to workers’ compensation has fallen by half since 2004, to only 17%, according to a 2018 report by the Division of Workers’ Compensation.  And while contractors who opt out expose themselves to tort claims by injured employees, most plaintiffs’ attorneys will not take those cases given most construction companies are not big enough and do not have deep pockets to pay damages. 

House Bill 750 (sponsored by Rep. Armando Walle, D-Houston) proposes to require all construction contractors and subcontractors to subscribe to workers’ compensation insurance.  He says that studies show that construction workers in Texas are four times more likely to be killed at work than in any other industry.  Per the U.S. Department of Labor, Texas had 129 fatal construction injuries in 2017, by comparison to California, which had 69. 

The bill was left pending in committee with no action after the April 9^th hearing, but there is always the possibility that the committee might vote on it at a later hearing.  The Texas Legislature’s House committees have until May 6 to report bills or pass them to the floor for a vote.

 -  Copyright 2019, Erin Hacker Shanley, Stone Loughlin & Swanson, LLP.

The Houston Appeals Court recently found that an insurance carrier was not able to recover subrogation funds from a wife who collected death benefits as the administrator of the deceased’s estate from a third party.  After receiving workers’ compensation death benefits, the children of the deceased filed a wrongful death claim against a third party.  As part of the settlement, the third party agreed to allocate a portion of the funds to the deceased’s estate.  The wife was the administrator of that estate.  The court reasoned the carrier was not entitled to subrogation funds because the wife did not individually recover funds from the third party settlement.  Therefore, the collective-recovery standard did not apply.  Fort Bend County v. Norsworthy, No. 14-17-00520-CV, 2019 WL 1291526 (Tex. App.—Houston [14th Dist.], March 21, 2019).

-  Copyright 2019, Erin Hacker Shanley, Stone Loughlin & Swanson, LLP.

The Appeals Court in El Paso held that, in the absence of a formal judicial or administrative decree, “recovery” from a third party occurs once the funds are actually disbursed, at which point a carrier may suspend benefits payments. Texas Mutual Ins. Co. v. Garcia, No. 08-15-00075-CV, 2019 WL 1467973 (Tex. App.—El Paso, April 3, 2019).  In that case, Texas Mutual stopped paying death benefits when the claimant beneficiaries signed an interim agreement with a third party.  The court found that Texas Mutual improperly suspended benefits before the agreement was funded or executed.  The court noted that Texas Mutual had a duty to continue paying death benefits unless and until the claimant beneficiaries recovered money from the third party.

On April 5, 2019, the Texas Supreme Court held that, while the 45-day deadline to file for judicial review of an Appeals Panel decision is mandatory, it is not jurisdictional-- meaning that judicial appeals from decisions by the Division of Workers’ Compensation Appeals Panel that are filed with the trial court past the 45-day statutory filing deadline do not automatically divest the trial courts of jurisdiction.  The Supreme Court’s decision overrules conflicting decisions from seven different Texas courts of appeals.

On March 17, 2012, Santiago Chicas (Santiago) fell from a ladder, sustaining fatal injuries.  His wife, Berlita Chicas (Chicas), sought workers’ compensation benefits from Texas Mutual, the workers’ compensation insurer for her husband’s employer.  Texas Mutual disputed the claim, and Chicas sought dispute resolution with the Division of Workers’ Compensation.    At CCH, the Hearing Officer found that Santiago was not an employee of the insured at the time of the injury, and therefore, his injury was not compensable.  Chicas appealed to the Appeals Panel.  On January 5, 2015, she was notified that after review by the AP, the Decision and Order was final. 

Meanwhile, and while the administrative proceedings were pending, Chicas filed a wrongful-death suit and then amended her probate-court pleadings, seeking judicial review of the administrative decision. Texas Mutual successfully filed a plea to the jurisdiction.  Twelve days after the probate court dismissed her claims, Chicas sought judicial review of the Appeals Panel decision in District Court. The District Court granted Texas Mutual’s plea to the jurisdiction and dismissed Chicas’ claims.  Chicas appealed.  The Court of Appeals reversed, holding that Tex. Lab. Code Section 410.252(a)’s 45-day deadline for filing for judicial review of the agency’s decision is not a jurisdictional statutory prerequisite, and therefore, the trial court had erred in granting Texas Mutual’s plea to the jurisdiction.  (The Court did not address whether Chicas’ claims were timely, noting that the limitations issue was properly left for resolution by way of a motion for summary judgment.) In an opinion by Justice Brown, the Supreme Court affirmed, holding that Chicas’ failure to file suit before the 45-day deadline did not deprive the District Court of jurisdiction.  In reaching its decision, the Court examined: (1) the plain meaning of the statute, (2) whether the statute contains specific consequences for noncompliance, (3) the purpose of the statute, and (4) the consequences that would result from each possible interpretation of the statute. As part of its analysis, the Court noted that the plain text of the statute did not indicate any legislative intent that the statute be jurisdictional, that the statute did not require dismissal for failure to comply, and that the purpose of the statute was not to deprive courts of jurisdiction in certain cases.  The Court further stated that interpreting the statute as jurisdictional would “leave final judgments vulnerable to attack on the ground that the deadline was not met.”

Bottom line: a party arguing that the 45-day deadline was not met needs to raise and preserve that argument, since such an argument can be waived if not raised properly because it does not go to a court’s jurisdiction to hear the case.

Since Texas Mutual’s plea to the jurisdiction relied solely on argument that the 45-day deadline is jurisdictional, the Supreme Court declined to address argument as to whether the filing deadline is a statute of limitations that would trigger application of the tolling provision in a workers’ compensation appeal.  The case has been remanded to the trial court for further proceedings. Texas Mutual Ins. Co. v. Chicas, No. 17-0501, 2019 WL 1495202, (Tex., April 5, 2019).

After seven weeks of trial, on April 9 a Dallas jury found seven defendants in the Forest Park Medical Center kickback case guilty.  Those convicted are: Dr. Douglas Won, Dr. Michael Rimlawi, Wilton McPherson Burt (co-founder of the specialty surgery hospital), Dr. Shawn Henry (a Fort Worth spine surgeon), Dr. Mrugeshkumar Kumar Shah (a pain doctor), Jackson Jacob (recruiter for Forest Park), and Iris Kathleen Forrest (a nurse).  North Texas prosecutors used a federal law, the Travel Act, to win the bribery and kickback convictions, arguing that the health care workers had attempted to evade federal insurance programs like Medicare to avoid prosecution.

The case involves $40 million in bribery schemes.  Twenty-one individuals were originally charged in the case.  Of those, 10 pleaded guilty prior to trial. Bariatric surgeon Nick Nicholson, MD was acquitted. Also charged is a Texas workers’ compensation claimant attorney Royce Bicklein, who is accused of accepting payment for referring his injured worker clients for medical treatment.  Mr. Bicklein’s case has yet to go to trial. 

A recent study by the Division shows that nearly one-third of Texas small businesses opt out of subscribing to workers’ compensation insurance. According to the Division's investigation, 28% of small business owners (those with fewer than 50 employees) opted not to subscribe. That number increased to 36% for small businesses with one to four employees. However, of those who opt out, 30% report offering some alternative form of workers’ compensation coverage.

Small business owners cited having “too few employees” and “too few on-the-job injuries” as reasons for opting out of coverage. Nineteen percent said they opted out because premiums were too high. The largest industries with non-subscribers were healthcare (38% opt out), wholesale (33% opt out), and arts and entertainment (32% opt out). 

Texas is the only state where businesses have the option to subscribe to the state workers’ compensation system. The majority of employers choose to participate. The number of employees covered by the state’s workers’ compensation system has been around 80% since 2004.