State News : Texas

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. 

The Division is offering free webinars for health care providers and staff explaining the ins and outs of medical care for injured workers. The webinars will cover topics like utilization review, verification of coverage, medical bill processing, bill disputes, MMI and IR, and healthcare networks. The webinars begin at noon and are an hour long. Registration is available on the Division’s website. For more information on upcoming webinars and a list of topics, please visit:https://www.tdi.texas.gov/alert/event/dwchealthcare.html.   

-  Copyright 2019, Stone Loughlin & Swanson, LLP.

Early this month, Kevin Williams, M.D. voluntarily surrendered his medical license. The Division audited Dr. Williams in 2016, and found that he prescribed compound medications which were not reasonable and/or medically necessary for his patients, and that he failed to follow the Division's fee and treatment guidelines. Dr. Williams was ordered to pay an administrative penalty of $10,000.00, to cease and desist from prescribing compound medications as routine practice in the Texas Workers’ Compensation system, and to attend further record keeping courses. 

The Texas Medical Board also investigated Dr. Williams for his excessive compound drug prescribing practices. Rather than face continued investigation, Dr. Williams agreed to surrender his license. In the Board Order, Dr. Williams neither admits nor denies the accusations, but rather, he chooses to voluntarily surrender his Texas Medical License in lieu of further disciplinary proceedings. The voluntary surrender of his license becomes effective on March 29, 2019. 

Dr. Williams may petition the Texas Medical Board to reissue his Texas Medical License in one year.    
 

We are glad to report that Governor Abbott reappointed Jessica Barta as the Injured Employee Counsel. Not only does OIEC provide excellent assistance to injured workers, Jessica and her staff have been an invaluable resource for Kids’ Chance of Texas. Jessica serves on the board and has transformed Kids’ Chance’s outreach program out of the dark ages and into the light of the tech-savvy potential scholarship applicants . . . Kids’ Chance not only tweets now, it is also on FaceBook!  Check it out atwww.kidschanceoftexas.org. Please do not forget to refer to Kids’s Chance children of any age who have had a parent killed or catastrophically injured while working in Texas. Outreach and fundraising efforts are underway for 2019! 

It is no secret that opioid addiction is a major problem in this county. In 2017, President Trump declared the opioid crisis a national emergency, and states have started fighting back. The Oklahoma attorney general recently announced a $270 million settlement the state reached with Purdue Pharma, the largest manufacturer of prescription opioids. Nevada, Texas, Florida, North Carolina, North Dakota, and Tennessee also filed suit against Purdue Pharma alleging violations of state consumer protection laws by falsely denying or downplaying the addiction risk while overstating the benefits of opioids. Several municipal and county governments in New York are also pursuing litigation against leading opioid manufacturers, including Purdue Pharma, to recover the medical, public health, and law enforcement costs related to opioid abuse.      
   
It seems doctors have heeded the public outcry, as opioid prescriptions are down. A study done by the California Workers’ Compensation Institute found that previously, nearly 33% of medications prescribed in its system were opioids. Now, opioids account for about 18% of the medications. 

The fact that opioid prescriptions are down does not mean we are out of the woods.  Efforts to curb unnecessary opioids should not result in simply replacing those drugs with others that may carry their own risks. The drug group that now accounts for a growing share of workers’ compensation prescriptions has its own set of risks, side effects, and potentially dangerous drug interactions. Benzodiazepines, for example, are highly addictive and have been implicated in overdose deaths. Originally prescribed as tranquilizers, they are found in multiple therapeutic drug groups, such as anticonvulsants and NSAIDs.  Recent research published in the Journal of the American Medical Association shows that prescriptions for these drugs for conditions such as back pain, chronic pain, anxiety, and insomnia are increasingly common.