State News : Texas

As discussed in last month’s newsletter, attorneys’ fees are a hot topic of discussion in the Texas workers’ compensation system. With the recent indictment of a claimant’s attorney alleging fraudulent billing, as well as the revelations of some incredibly high hourly billers in the system, the Division is now weighing in on the issue. Tim Riley, Deputy Commissioner for Compliance and Investigations, issued a July 11 memo to remind attorneys of the Division’s requirements for submitting fee applications as well as the Division’s right to enforce compliance. Deputy Commissioner Riley specifically warns attorneys that approval of an application for attorney’s fees does not foreclose the possibility of an enforcement action related to the application.

The full memo is available on the TDI Website.

-  Copyright 2018, Stone Loughlin & Swanson, LLP

According to an article in The Texas Tribune, Governor Greg Abbott’s office will be reviewing all Texas agency rules before they are posted in the Texas Register for public comment. Luis Saenz, the Governor’s Chief of Staff, wrote a letter to the agencies saying, “Prior to publication of a proposed rule in the Texas Register, the Office of the Governor will review the Notice of Proposed Rule as well as the agency’s internal analysis of the rule.”

Governor Abbott claims this approach will “eliminate redundancies and inefficiencies, and provide a dispassionate ‘second opinion” to the proposed agency’s rules.

While the move is intended to promote efficiency, it also significantly expands the power of his office. The process will ensure the involvement of the Governor’s Office in all agency rule-making decisions, including the Texas Department of Insurance and the Division of Workers’ Compensation.

Texas agencies have been directed to provide certain information to the Governor—including the draft rule and its expected impact on local employment and the economy—before posting the proposed rule in the Texas Register. The letter does not specify what power the Governor has over those proposed rules. 

For agencies that have statutory or programmatic deadlines for rule promulgation, this mandate will require them to reconsider their timelines, adding extra time to allow for gubernatorial review.

Click the link to read Governor Abbott's letter.

-  Copyright 2018, Stone Loughlin & Swanson, LLP

Computers, smartphones, and tablets are everywhere and seemingly make peoples’ lives easier.  A study conducted by UCLA found that young people spend upwards of 7 hours a day attached to their devices. Garry W. Small, et. al.,Healthy behavior and memory self-reports in young, middle-aged, and older adults, 26.6International Psycogeriatrics 981-989. 

The consistent use and dependence on these devices comes with some negative consequences.  Individuals who rely heavily on technology may suffer deterioration in cerebral performance such as short-term memory dysfunction. Research has shown that reliance on devices can lead to issues with memory and cognitive skills, dubbed “digital dementia.” “Digital Dementia” is a term coined by Manfred Spitzer and is used to describe how overuse of digital technology can result in the breakdown of cognitive abilities in ways that are commonly seen in people who have suffered head injuries or psychiatric illness. 

What impact does this have for employers and workers’ compensation carriers?  Digital dementia may become the new carpel tunnel syndrome, especially with older generations who were not exposed to technology before entering the workforce.  An employee could argue digital dementia is an “occupational disease” that naturally results from working with technology.

These “digital dementia” claims will likely be decided in a manner similar to “job stress” or mental trauma claims. The Texas Supreme Court has held that damage or harm caused by repetitious mentally traumatic activities does not constitute an occupational disease and is not considered a compensable injury under the Act.  However, if the event can be traced to a definite time, place, and cause, it could produce a compensable injury.  In most cases, it will be difficult for an injured employee to pinpoint a discernable time, place, and cause to the alleged “digital dementia,” because it is a “repetitive” type injury that occurs over time.

Click the link to learn more aboutDigital Dementia and the effects it has on the brain. 

-  Copyright 2018,Stone Loughlin & Swanson, LLP

Enrique Colon, a healthcare worker, was convicted of falsifying workers’ compensation claims.  Mr. Colon was indicted along with EME International, Inc. and two others on charges of engaging in organized criminal activity for over-billing for the exams. Mr. Colon was found guilty of submitting false medical claims to an insurer for more time than it actually took to perform functional capacity evaluations.

In response to the conviction, Cassie Brown, Commissioner of Workers’ Compensation, said: “Addressing fraud is vital to the health and success of the workers’ comp system here in Texas.  The [D]ivision is committed to protecting injured employees and policyholders from these schemes.”

Report suspected cases of insurance fraud by calling 1-800-252-3439 or visit www.tdi.texas.gov/fraud/.

-  Copyright 2018, Stone Loughlin & Swanson, LLP

In the past several years, there have been a litany of federal and state indictments (and convictions) for health care fraud involving healthcare providers and pharmacies. Most recently, a group of doctors, pharmacies, and federal worker advocates were indicted in connection with a compounded drug scheme that defrauded the federal workers’ compensation program and Tricare out of almost $40 million.

The court documents allege the fraud was coordinated by a Houston couple, John Cruise, CEO of the Injured Federal Workers Advocate Association, and his wife, Lashonia Johnson, the director of a group that helps federal workers who are injured on the job. The couple also ran a pharmacy in Texas that dispensed compounded medicine. The doctors involved in the scheme were allegedly taking kickbacks from Cruise and Johnson for prescribing expensive and unneeded compounds to federal workers referred by a therapy center.

-  Copyright 2018, Stone Loughlin & Swanson, LLP

In this most recent case, Dr. Vanderwerff, with whom some of you may already be familiar, argued that he was entitled to payment from Travelers because its network provider list was given to the claimant by a website link instead of on paper. Therefore, he argued, the claimant was not given the proper notice of network requirements so the claimant was free to treat out-of-network with Dr. Vanderwerff.

In an opinion issued June 28, 2018, the Dallas Court of Appeals rejected Dr. Vanderwerff's argument. The court held that the term "written description" as used in section 1305.451 of the Insurance Code includes an electronic format rather than paper only. The Court noted that when asked in oral argument, “Are words any less written if they are written electronically rather than on paper?,” Dr. Vanderwerff’s counsel conceded, “No.” Dr. Vanderwerff was represented by claimant attorney Brad McClellan. 
 
The Court also declined Dr. Vanderwerff’s request to reconsider its 2015 opinion in this same case. In that opinion, the Court, citing the redundant remedies doctrine, held that Dr. Vanderwerff cannot seek declaratory relief on the same issue in his suit for judicial review in order to try and recover attorney's fees. It also held that he can’t bring claims for declaratory relief on issues which the Division has exclusive jurisdiction and where he has failed to exhaust his administrative remedies.
 
Among other things, the Court's opinion means that carriers and employers will not have to start handing out 400 page paper provider directories to employees. The Court’s opinion can be readhere.

James Loughlin, with the Firm, represented Travelers in the case. 

-  Copyright 2018,Stone Loughlin & Swanson, LLP

Never, never, never miss a deadline to appeal! Second thoughts will get you nowhere.  

In a recent SIBs case appealed by a Plaintiff workers’ compensation claimant to the Beaumont Court of Appeals, the trial court awarded the Plaintiff SIBs by way of a summary judgment. The Order was signed on April 20, 2016, and neither the workers’ compensation insurance carrier nor the claimant filed a notice of appeal within the deadline to do so. However, within 30 days of the April 20, 2016 order, the Plaintiff filed a motion asking the trial court to “clarify” the order to expressly state the money amount that he was owed in prejudgment interest. Then, in late June, the claimant asked the trial court to increase the amount of the SIBs award, and to increase the amount of the attorney’s fees that were awarded in the April 20th Order. After a hearing held the following October, the court signed an second order on October 12, 2016 granting the claimant’s new requests. While the carrier failed to appeal the April Order, it did appeal the October Order.  

The Beaumont Court of Appeals issued an opinion that the April 20, 2016 Order had become final, explaining that the trial court’s jurisdiction ended 105 days after the April order was signed. Because the October Order was signed more than 105 days after the earlier April Order was signed, the trial court’s jurisdiction had expired. The result? The October Order in favor of the claimant for more money and fees was void. The Plaintiff lost out on the higher award because it was too late to fix the wording of the initial order.Texas Alliance of Energy Producers v. John Bennett, Case No. 09–16–00437–CV, 2018 WL 2246540, (Tex. App.- Beaumont May 17, 2018).

Why is it that in 2012 84% of Designated Doctors were medical or osteopathic doctors, and only 16% chiropractors, but by 2017 the number of medical and osteopathic doctors serving dropped to 34%? The statistics can’t be denied, and the Division is working on solutions that would result in more medical and osteopathic doctors being willing to participate in the designated doctor process.  

Proposed fixes include distinguishing between musculoskeletal and non-musculoskeletal structures of the torso, changes to the rescheduling process, adjusting the computerized selection process to increase the number of exams in a city in a day to accommodate doctors willing to travel to do exams, and creating two lists of doctors – one containing names of medical and osteopathic doctors and chiropractors and the other a list only of medical doctors and osteopathic doctors qualified to do more specialized exams. The proposed rule changes do not, however, address the extensive regulatory and compliance burdens complained about by many doctors who have elected to forego certification to perform designated doctor exams.

-  Copyright 2018,Jane Lipscomb Stone, Stone Loughlin & Swanson, LLP

The law has been settled for years that a waiver of subrogation endorsement contained in many insurance policies effects a waiver of a workers’ compensation carrier’s right to get reimbursement from 3rd party settlement funds for workers’ compensation benefits paid to an injured worker. But in a recent decision, the Texas Supreme Court shot down a workers’ compensation insurance carrier’s argument that a waiver of subrogation applies only to direct recovery against the liable 3rd party, and not to an indirect recovery from the settlement proceeds paid by that party to the injured worker. The Court explained that when the carrier, by way of the endorsement, signed away its right to recover benefits it paid to the employee in exchange for receiving a higher premium to cover the  assumption of the risk, it cannot also try to recover indirectly the same proceeds it agreed not to pursue directly. Put in other words, the Court admonished that “[the Carrier] sought the same money through the back door that it could not get through the front.”  Wausau Underwriters Ins. Co. v. James Wedel and Michelle Wedel, Texas Supreme Court No. 17-0462, Opinion Delivered June 8, 2018.

-  Copyright 2018, Jane Lipscomb Stone, Stone Loughlin & Swanson, LLP

As a reminder to us that disability and entitlement to TIBs can be different questions when a bona fide offer of employment (BFOE) is at issue, the Appeals Panel recently gave guidance and a caution to those of us who care about such things. In a May 29, 2018 decision the AP upheld the ALJ’s determination to throw out a BFOE simply because the DWC-73 attached to the offer was not signed by the doctor. But, the AP then also upheld the ALJ’s determination that the claimant did not have disability. This holding is a reminder that when both BFOE and disability are raised as issues, even if it is determined that there has not been a valid BFOE, the ALJ is still free to find that the claimant did not have disability.Appeals Panel Decision No. 180817, decided May 29, 2018.

-  Copyright 2018,Jane Lipscomb Stone, Stone Loughlin & Swanson, LLP