State News : Texas

The Texas legislature is busy at work in the capital. There are several pieces of proposed legislation affecting workers’ compensation. The following are some of the more notable bills:

• Senate Bill 4418 would allow a licensed advanced practice registered nurse to complete and sign required reports such as DWC-73s.
• House Bill 3537 effectively destroys the intoxication presumption provided in §401.013(c) by limiting it to a specimen taken within four hours of the injury.   
• House Bill 4300 would allow Texas workers’ compensation insurance carriers and injured workers to reach a settlement of medical benefits if: (1) the injured worker enters into a workers’ compensation Medicare set-aside arrangement; (2) the arrangement is approved by the federal Centers for Medicare and Medicaid Services, if the proposed amount of the settlement is eligible for review by that agency; and (3) the settlement provides for oversight of the arrangement by a corporate trustee or other professional administrator, and a reversionary interest on the employee's death allowing the expended funds to be shared by the injured employee's beneficiary and the payor. The proposed legislation also would require that the Texas workers’ compensation insurance carrier and injured worker resolve, to the extent possible, all extent of injury issues before reaching an agreement on any issue. 
• House Bill 1305 would require death benefits to be adjusted at the end of each calendar year as necessary to reflect inflation.
• Senate Bill 2181 would expand lifetime income benefits to include third-degree burns covering the majority of both feet, one hand and one foot, or one hand or foot and the face. An injured worker who is determined permanently and totally disabled by the Bureau of Justice Assistance of the United States Department of Justice would also be eligible for lifetime income benefits if the injured worker is a first responder or “employed by a political subdivision that self-insures.” The bill also provides expanded provisions for coverage of traumatic brain injuries resulting in “permanent cognitive deficits” that render the injured worker permanently unemployable without significant accommodations or affect the injured workers’ non-vocational quality of life “so as to eliminate the employee's ability to engage in a range of usual cognitive processes.”
• House Bill 536 would require that all opioid prescriptions be dispensed only in bottles with red caps. The hope is that the distinctive red caps will serve as a clear notice to “that opioids are unlike milder forms of prescription pain relievers” and “will help to eliminate accidental use and abuse leading to addiction and fatalities,” said Rep. Shawn Thierry who proposed the bill.

 -  Copyright 2019, Stone Loughlin & Swanson, LLP.

PHI Air Medical, the global helicopter transport company at the heart of the dispute over whether air ambulance firms can be bound by workers’ compensation fee schedules, filed for Chapter 11 bankruptcy protection this month.  The move came as no surprise following the company’s widely reported financial struggles in recent months. PHI’s bankruptcy filing has put the air ambulance litigation at the Texas Supreme Court on hold.   On March 22, 2019, the Texas Supreme Court abated the case until further order of the Court.  The Court has asked the parties to file a status report no later than May 21, 2019. 

PHI’s bankruptcy is the third among major helicopter service companies in recent years, including CHC Helicopters and Erickson in 2016.  Jeff Frazier, a partner with Sentinel Air Medical Alliance, indicated that PHI’s bankruptcy could signal the beginning of a shakeout that could lead to lower fees.  He indicated that PHI's, and other air ambulance companies, bankruptcy may lead to a restructuring of the industry, including a move to more hospital-based air services, which could lead to more reasonable rates. 

Whatever the effect of PHI’s bankruptcy, it is clear that the current business model is not working.  Air ambulance services borrow heavy to buy more helicopters, and then charge exorbitant prices to help pay the debt.  Some air ambulance services have loads of debt and reported profits have dropped sharply in recent years.  Air Evan EMS wrote in a court brief that it “faces market pressure in Texas” and, from 2012 through 2017, “suffered net losses in three years and posted minimum profits in the others.”  Evidently, billing patients for the balance did not really help air ambulance companies’ bottom line . . . .

The FDA recently approved the "EyeBox," an eye-tracking test device to help diagnose concussions.  The company that makes the device, Oculogica, Inc., touts that this technology brings in a new era for diagnosing concussion and managing patients. It is marketed to be the first objective diagnostic test for concussion.  In referenced studies the company  claims that the EyeBox had high sensitivity to the presence of concussion and that a negative EyeBox result was consistent with lack of concussion.  We expect to hear more about this given that allegations of traumatic brain injury are common in the workers’ compensation arena.  The Oculogica websitehttp://www.oculogica.com/ emphasizes that the results of the test “cannot be influenced or ‘gamed’ by the patient.

-  Copyright 2019,Jane Lipscomb Stone, Stone Loughlin & Swanson, LLP.

There are several pieces of legislation under consideration that affect workers’ compensation. Senate Bill 163 would require every construction contractor that does business with state government to carry workers’ compensation insurance. As usual, business interests oppose the legislation.

House Bill 2143, while only affecting Police or Fire Persons, would expand coverage to PTSD claims where the condition is not alleged to be caused by a single event, but also by exposure to multiple events—a cumulative exposure concept.

House Bill 1005 would require insurance carriers who have issued a PLN denial related to causation based on a medical opinion to also pay for a medical opinion on causation from the claimant’s treating provider or from a doctor to whom the treating provider “previously” referred the claimant.

Senate Bill 934, championed by OIEC, would change the deadline for filing a suit for judicial review of a DWC decision from 45 days to 60 days in order to give the claimant more time to locate an attorney willing to take the case to district court.

Senate Bill 229 would require the notices OIEC now sends to claimants describing their rights and obligations to also include a statement informing the claimant that he has the right to choose a doctor who is a doctor of medicine, osteopathic doctor, optometrist, dentist, podiatrist or chiropractor who is licensed and authorized to practice.

-  Copyright 2019, Jane Lipscomb Stone, Stone Loughlin & Swanson, LLP.

The case of New Hampshire Insurance Company v. Rodriguez, No. 08-15-00173-CV, recently decided by the El Paso Court of Appeals, may have a huge impact on workers’ compensation insurance carriers’ subrogation lien rights to plaintiffs’ recoveries in 3^rd party lawsuits. The case involved two potential employers, only one of which had workers’ compensation insurance which paid almost $2 million dollars in workers’ compensation benefits to the catastrophically injured worker. The worker sued both companies, and a jury apportioned the liability among the two companies and the worker. So far, so good. But then the trial judge found that the workers’ compensation insurance carrier’s right of subrogation against the total judgment had to be reduced by the dollar amount the jury attributed to the insured employer’s negligence. The court of appeals affirmed this methodology which, if the Texas Supreme Court allows this to stand as precedent, would mean that a carrier’s statutory lien interest would be reduced or extinguished altogether whenever a jury apportions negligence on an employer, even if the worker were to  be awarded 100% of his damages. The greatest impact will be in the employee leasing context where there are often two potential entities who could be the employer of the injured worker for purposes of a personal injury claim.

-  Copyright 2019,Jane Lipscomb Stone, Stone Loughlin & Swanson, LLP.

With the demise of “bad faith” in workers’ compensation we are seeing a lot of attempts by plaintiff attorneys in 3^rd party lawsuits to try to work-around the exclusive remedy defense in order to hold an employer vicariously liable for damages. The core issue is always whether an individual was an employee or an independent contractor of a company at the time of the accident. Many times there will be a contract between an individual and a company where both agree that the individual is not an employee. It seems like this would be enough, but the Houston Court of Appeals recently decided that even where there is a clear agreement between the parties, there must still be an analysis of evidence regarding who has the right to control the details of the individual's work. Because this is a fact question, even a clear agreement cannot be the basis of a summary judgment. Stevenson v. Waste Management of Texas, No. 14-17-00433-CV, 02/21/19. 

-  Copyright 2019,Jane Lipscomb Stone, Stone Loughlin & Swanson, LLP.

Karissa Coleman thought she was clever enough as an insurance agent to teach herself how to code medical bills for cancer treatment. Ms. Coleman created fake medical bills and fake medical records and then submitted fake claims for payment for out of pocket medical expenses not covered by medical insurance.  As “treatment” for her fakery, Ms Coleman got a real sentence: 10 years of probation and a requirement to perform 100 hours of community service.  Plus, she must pay back over $300,000.  We wonder whether she still has her ill-gotten gains so that she can actually make restitution.  The lesson here is that the more complex a system, the easier it is for bad actors to fly under the radar.  It costs us all.

-  Copyright 2019,Jane Lipscomb Stone, Stone Loughlin & Swanson, LLP.

No less inventive than the pleadings in the prior entry is the basis for a lawsuit filed by a group of injured workers against the Division, claiming that a designated doctor’s ability to assign maximum medical improvement prior to the date of the certifying examination amounts to an unconstitutional “taking” of property under the Fifth Amendment.  The grounds for suitseems to be that an insurance carrier’s ability to recoup or convert overpaid Temporary Income Benefits (TIBs) deprives them of a vested property right to said benefits. 

“Seems” is the operative word here, as per the Court of Appeals’ memorandum opinion: “Appellants’ pleadings are so vague as to be difficult to assess and their briefing is at times insufficient under the rules.” The Court elaborates: “Appellants . . . have not identified which statutory provision they seek to challenge, presented clear argument about how the statute was unconstitutional, or provided citations to the record or to relevant authority.” 

The Court of Appeals explained that for a takings claim to have validity, the injured workers must establish a vested, constitutionally protected property interest. That requires more than mere expectancy of a benefit, it demands a “legitimate claim of entitlement.” An injured worker has “a mere expectancy” in receiving TIBs, per the Court, and not a vested right to such benefits. The injured workers in this case provided no authority to support their assertion to the contrary other than to argue, in essence, that because the insurance company paid their benefits, they must be entitled to them.

Holt v. Texas Department of Insurance—Division of Workers’ Compensation, No. 03-17-00758-CV, 2018 WL 6695725 (Tex. App.—Austin Dec. 20, 2018, affirmed) (mem. op.).

-  Copyright 2018, Stone Loughlin & Swanson, LLP.

Of the twenty-one original defendants indicted in the Forest Park bribery and kickback scheme in 2016, ten remain scheduled to appear in federal court in Dallas. Among them is Royce Bicklein, noted claimants’ attorney and the chairman of the State Bar of Texas' Workers’ Compensation Section. Bicklein is accused of receiving kickbacks in the amount of $100,000 for referring clients to Forest Park Medical Center, and if court filings are any indication, Mr. Bicklein appears poised to offer a novel defense strategy: his clients authorized him to break the law.

Bicklein maintains that his clients were asked to sign a consent form, which apprised them of the possibility that their attorney might stand to gain financially from referrals made to certain medical professionals on their behalf. Mr. Bicklein’s defense seems to suggest that he committed no crimes because his clients knew of his financial relationship with Forest Park and consented to it.

Aside from the fact that subpoenas have thus far produced no such signed consent forms, prosecutors argue that client consent does not obviate penalties for commission of a crime, and the existence of such a form may actually demonstrate that Bicklein and his law firm knew that they were in violation of Texas and federal anti-kickback statutes; the consent form was apparently generated on the advice of Mr. Bicklein’s own law partner.

Mr. Bicklein’s trial is set to start February 19, 2019, in federal district court in Dallas.

-  Copyright 2018,Stone Loughlin & Swanson, LLP.

The Texas Department of Insurance, Division of Workers’ Compensation, adopted a new rule, 28 TAC §140.9, which took effect on January 7, 2019, requiring that parties seeking to reset, reschedule, or continue any proceeding include with their requests a signed statement that reasonable efforts were made to confer with the opposing party about the subject of the request.  Parties must indicate whether the motion is opposed and provide dates and times they areboth available for a rescheduled proceeding. Those dates and times must also be coordinated with the DWC docketing staff, thus ensuring that none of this will ever happen. The Division has modified the DWC Form-045 pursuant to the rule change. 

In addition, 28 TAC §141.2 has been amended to clarify that a “first request” to reschedule a benefit review conference, which does not require a demonstration of good cause, pertains to the first such request made in adispute, not the first request made by a particular party.  In other words, any subsequent request to reschedule a BRC by either party will require a showing of good cause. 

Finally, 28 TAC §142.11 has been amended to legitimize the Division’s long-standing practice of issuing a “10-day letter” to a party who fails to attend a scheduled contested case hearing.  The absent party is afforded ten days to respond and request that the hearing be reset. With the addition of this new rule, Administrative Law Judges are empowered to determine whether good cause has been established for the failure to attend and, if not, issue a decision based on the evidence previously admitted.

-  Copyright 2018,Stone Loughlin & Swanson, LLP.