NWCDN Members regularly post articles and summary judgements in workers’ compensations law in your state.
Select a state from the dropdown menu below to scroll through the state specific archives for updates and opinions on various workers’ compensation laws in your state.
Contact information for NWCDN members is also located on the state specific links in the event you have additional questions or your company is seeking a workers’ compensation lawyer in your state.
The Texarkana Court of Appeals held this month that a claimant failed to exhaust her administrative remedies at the Division of Workers’ Compensation where the allegations in her lawsuit against the carrier were not first presented to and ruled upon by the Division.
The claimant filed suit against the carrier’s third-party administrator and her employer for fraud, fraudulent inducement, gross negligence, and violations of the Deceptive Trade Practices Act and Texas Insurance Code. The gist of her allegations is that she was denied full benefits as a result of misrepresentations and mishandling of the claims process by the carrier.
In a prior related proceeding, the Austin Court of Appeals had already determined that the Division has exclusive jurisdiction over the claims in her lawsuit. The claimant subsequently entered into a benefit dispute agreement agreeing: 1) that the carrier was relieved of liability because she did not file a claim within one year of her injury, and 2) her recovery was barred under the Texas Workers’ Compensation Act because she elected to pursue a remedy and recover under the laws of another jurisdiction.
Following the agreement, the claimant filed suit again, bringing the same claims but arguing that because of the agreement she had exhausted her administrative remedies and could now proceed with her lawsuit. The issue before the Texarkana Court was whether she had, in fact, exhausted her administrative remedies.
The Texarkana Court noted that the agreement addressed only issues of compensability. It did not address the extent of the injury, preauthorization, medical necessity, or administrative violations.
The Court held that the claimant’s complaints needed to be raised with the Division and a review of the agreement shows that they were not. According to the Court, nothing in the appellate record shows that the claimant either exhausted administrative remedies under Chapter 413 or provided the Division with notice of administrative violations.
The Court’s opinion includes a detailed discussion of the Division’s exclusive jurisdiction, including the Texas Supreme Court holding that the Texas Workers’ Compensation Act “provides the exclusive procedures and remedies for claims alleging that a workers’ compensation carrier has improperly investigated, handled, or settled a claim for workers’ claim for benefits.”
Steele v. Murphy & Beane, Inc., No. 06-19-00008-CV, 2019 WL 2998278 (Tex. App.—Texarkana, July 10, 2019).
Copyright 2019,James M. Loughlin, Stone Loughlin & Swanson, LLP
The Tyler Court of Appeals recently held that the Division has exclusive jurisdiction to determine whether administrative costs qualify as workers’ compensation benefits that the carrier is entitled to recover as part of its subrogation lien.
The Act provides that the net amount recovered by the claimant in a third-party action shall be used to reimburse the carrier for benefits that have been paid for the compensable injury. The Act defines benefits to include medical, income, death, or burial benefits based on a compensable injury.
According to the decision, the carrier allegedly paid a third-party administrator a flat-fee of $5,354,500.00 to assume liability for medical costs on a catastrophic claim. The TPA paid actual medical costs of $2,259,378.58. The carrier allegedly filed an affidavit in the claimant’s third-party action claiming a lien in the amount of $5,587,479.18. This amount allegedly included the $5,354,500.00 paid to the TPA as well as “hundreds of charges for bill and utilization review.”
The claimant’s survivors brought suit against the carrier alleging various fraud claims, all premised on the assertion that a carrier’s administrative costs are not recoverable as part of its subrogation lien. The carrier filed a plea to the jurisdiction which the trial court denied. The carrier then filed a petition for writ of mandamus which the Tyler Court of Appeals granted.
The Court held, “It is axiomatic that the DWC, tasked with regulating and administering the business of workers’ compensation and monitoring insurance carriers, attorneys, and other representatives for compliance with the Act, should be the decision maker with regard to whether benefits have been inflated and administrative costs have been wrongfully included in a subrogation claim.”
The Court explained that because the fraud claims arise out of the carrier’s allegedly improper investigation, handling, or settling of a claim for worker’s compensation benefits, the Division has exclusive jurisdiction over those claims and the claimant’s survivors were required to exhaust their administrative remedies with the Division.
Therefore, the Court held that the fraud claims, should be abated pending the Division’s resolution of whether the carrier is entitled to seek administrative costs as part of its subrogation claim, and if not, whether the carrier committed an administrative violation by allegedly doing so.
In re Old Republic Risk Mgmt., No. 12-19-00144-CV, 2019 WL 2462486 (Tex. App.—Tyler, June 12, 2019).
Copyright 2019,James M. Loughlin, Stone Loughlin & Swanson, LLP
We’ve heard reports that Brook Army Medical Center (BAMC) will not release medical records to a carrier unless the claimant signs a DD Form 2569, Third Party Collection Program/Medical Services Account/Other Health Insurance.
What is a DD Form 2569, you ask? It states in part, “ACKNOWLEDGMENT: I hereby agree to pay for any service not covered in whole or in part by my third-party insurer.” BAMC’s current policy is reportedly that it will not accept a standard HIPAA-compliant medical records release signed by the claimant.
Claimants are understandably reluctant to sign the DD Form 2569 agreeing to be personally liable for any unpaid charges. And without the form, BAMC will not provide its medical records to the carrier. As a result, carriers have been unable to obtain necessary medical records from BAMC.
Matt Zurek, DWC’s Deputy Commissioner for Health and Safety, was asked about this practice by BAMC at the July 8, 2019 stakeholder meeting. He said the DWC has not seen the issue before but that there’s no provision in section 413.0112 or the informal draft rules that allows the carrier to withhold payment if BAMC won’t provide its records.
Please let us know if you’ve encountered a similar issue trying to get records from BAMC.
Copyright 2019,James M. Loughlin, Stone Loughlin & Swanson, LLP
The Texas Division of Workers' Compensation has published an informal working draft of the rules necessary to implement newly-enacted section 413.0112 of the Act, referred to informally as the Brooke Army Medical Center (BAMC) Bill.
This new statute requires carriers to reimburse a federal military treatment facility (FMTF) the amount charged by the facility as determined under 32 C.F.R. Part 220.
The purpose of the statute is to prevent injured workers from being balance-billed by a FMTF for medical treatment when the carrier does not pay the FMTF’s billed charges.
Section 413.0112 also requires the commissioner to adopt rules necessary to implement this section, including rules establishing:
The informal draft rules do the following:
Rule 134.150
Rule 134.155
A stakeholder meeting was held on July 8, 2019 to discuss the informal draft rules. The Division is required to adopt the rules necessary to implement section 413.0112 no later than December 1, 2019.
- Copyright 2019,James M. Loughlin, Stone Loughlin & Swanson, LLP.
Most doctors who take the Designated Doctor test fail. At least, that is what data recently obtained from the Division via an open records request revealed. For instance, in 2018 the failure rate was 56% on the first attempt, 64% on the second, and 61% on the third.
The 2011 Legislature mandated more stringent testing requirements on designated doctors, with the goal of addressing the increasing discrepancy in the number of physicians versus chiropractors on the designated doctor list. However, that doesn’t appear to have happened. When broken out by provider type, data reveal that medical doctors (MDs) and doctors of osteopathy (DOs) have lower failure rates than chiropractors. The percentage of chiropractor DDs rose from 20% to 49% between 2010 and 2015. By contrast, the number of MDs and DOs dropped from 70% to 55% during the same timeframe. And overall, the number of DDs continues to drop—in April 2017 there were 586, compared to 475 in March 2019. Of those, just 133 are MDs. Chiropractors take a different test containing more questions on musculoskeletal injuries. (The Division maintains two lists of designated doctors—one for musculoskeletal conditions, and one for all other injuries; chiropractors fall into the first category, as they are only allowed to address musculoskeletal conditions.)
The data and discouraging pass rates leave some doctors to conclude that the test is impassable. Complaints run the gamut, including allegations that the test asks irrelevant questions, questions that have not been validated, and questions that have more than one correct answer. An article from WorkCompCentral earlier this month provided an example of one such question said to have been on the DD test: “Who determines compensability?” The choices, reportedly, were: (1) the Division, (2) the designated doctor, and (3) the insurance carrier. The “correct” answer was both (1) and (2). However, this isn’t entirely true, as the carrier could ultimately make the decision if it denies a claim and there has been no challenge to the denial. The question is also confusing, as DDs are told when assessing MMI/IR to rate the carrier-accepted injury, which is noted in Box 37 of the DWC-32 Request for Designated Doctor form provided to the DD in advance of the exam. If there is no dispute as to the compensability of any specific diagnoses, and the DD is not being asked to address extent of injury, then effectively the insurance carrier has determined which diagnoses are compensable.
Another case of good intentions gone bad? We’ll plead the Fifth.
Speaking of the Appeals Panel, if you ever happen upon a written AP decision, it might behoove you to march right down to the local convenience store and buy yourself a lottery ticket. An open records request regarding Appeals Panel decision outcomes in 2018 reveals that the overwhelming majority of CCH decisions become final by operation of law. This will not come as a surprise to most, but some might find the actual percentage astounding. In 2018, a total of 2,766 Requests for Review were submitted to the Appeals Panel. Of those, the Appeals Panel reviewed and affirmed 18, reversed and rendered 6, remanded 31, and partially remanded 36. (Thirty decisions were a mixture-- some issues being affirmed, some reversed and rendered.) Of the 2,766 total Requests for Review of CCH decisions submitted, a staggering 2,744, or 99.2%, became final by operation of law.
What does this mean? The odds the Appeals Panel will write a decision in a case are 4.2%. The odds the Appeals Panel will reverse and render or remand in a case are 3.5%.
These odds not quite as bad as the lottery, but even if one happens upon an actual written decision from the Appeals Panel, the outcome might not be as favorable. A lottery ticket at least provides one the momentary dream of owning his/her own private island.
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 29th. 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.