State News : Texas

In Diaz v. American Zurich Ins. Co., No. 05-16-01530-CV, 2018 WL 1081452 (Tex. App.—Dallas Feb. 28, 2018), the Dallas Court of Appeals held that the first certification of MMI and IR became final as to the claimant because she did not timely request a BRC and she could not rely upon the BRC request filed by the carrier to stop the 90-day clock from running. 
 
The designated doctor found that the claimant’s injury included stenosis and disc protrusions (the “Disputed Conditions”) and that the claimant was not at MMI for the Disputed Conditions. The carrier filed a BRC request to dispute the designated doctor’s determination of extent, MMI, and IR. The carrier also requested a post-DD RME. The RME doctor determined the compensable injury did not include the Disputed Conditions, and that the claimant was at MMI with a 0% IR for the carrier accepted injury.
 
The claimant never requested a BRC to dispute the first certification of MMI and IR by the RME doctor. The court found that the first certification became final under the 90 day rule. The court rejected the claimant’s argument that she was not required to file a separate BRC request on the same issues raised in the carrier’s request. The court held that Rule 141.1 requires a “disputing party” to file a request for a BRC “in the form and manner required,” and the rule does not provide that a “disputing party” may rely on a request for a BRC filed by another party.
 
The court also rejected the claimant’s argument that there was an exception to the ninety-day rule in the form of a clearly mistaken diagnosis because the RME doctor determined that her injury did not include the additional claimed conditions. The court held that the claimant was diagnosed with the disputed conditions prior to the RME exam and that the RME doctor had considered those conditions. Therefore, any error by the RME doctor in determining the compensable injury did not include the disputed conditions is not one of mistaken diagnosis. 
 

In Halferty v. Flextronics America, LLC, No. 13–16–00379–CV, 2018 WL 897979 (Tex. App.—Corpus Christi Feb. 15, 2018), the Corpus Christi Court of Appeals held that Flextronics, as the general contractor, did not “provide” workers’ compensation insurance coverage to its subcontractors for purposes of section 406.123(a) of the Act merely by requiring a subcontractor to obtain workers’ compensation insurance coverage; and therefore, it was not entitled to claim the exclusive remedy defense in response to a suit filed against it by a subcontractor’s employee.
 
Flextronics contracted with Titan Datacom, Inc. to install data cabling at a Flextronics Facility.  In the agreement, Titan agreed to provide workers’ compensation insurance coverage for the project.  Titan contracted with another company, Outsource, to assist in the data cabling.  Both Titan and Outsource had workers’ compensation coverage for their employees.
 
As bad luck will have it, an Outsource employee, Patrick Halferty, sustained a work injury when he was accidentally knocked off a ladder by a Flextronics employee.
 
Mr. Halferty obtained workers’ compensation benefits from Outsource’s insurance carrier. He also sued Flextronics for his injuries.  Flextronics filed a summary judgment motion arguing that Mr. Halferty’s suit was barred by the Act’s exclusive remedy defense because, as the general contractor, it was Mr. Halferty’s employer pursuant to section 406.123(a) of the Act.
 
The court held that to be entitled to the exclusive remedy defense, section 406.123(a) required Flextronics to do something more than “simply passing the onus of obtaining coverage to the subcontractor.”  The court suggested the “more than” might include providing for an alternate insurance plan in which Flextronics would provide coverage in the event that is subcontractors failed to obtain insurance. Or, the “more than” might include enforcement mechanisms built into its contract with subcontractors “—such as withholding payment, or deducting insurance premium costs—that would trigger in the event that the subcontractors failed to provide coverage to its employees.”

James Loughlin, Stone Loughlin & Swanson, LLP.

Effective April 1, 2018, insurance carriers must begin using the following revised plain language notices:
 
• PLN-3a (Notice of Maximum Medical Improvement and No Permanent Impairment)
• PLN-3b Notice of Maximum Medical Improvement and Permanent Impairment)
• PLN-3c (Notice of Maximum Medical Improvement and Estimated Permanent Impairment)  
 
The Division also amended the PLN-3b to allow the carrier to indicate that it disagrees with the doctor’s impairment rating, the carrier’s reasonable IR assessment, and that the payment is based on the carrier’s reasonable assessment.

A new study released March 6, 2018, compared the effectiveness of opioids to over-the-counter medications and found that opioids were “not better at improving pain that interfered with activities such as walking, work and sleep over 12 months for patients chronic back pain or hip or knee osteoarthritis pain compared to non-opioid medications.” The study can be found here:https://jamanetwork.com/journals/jama/article-abstract/2673971?redirect=true. This latest study is sure to add more fuel to the debate about the use of opioids to treat injured workers and raise more questions about the continued prescribing patterns of some doctors. 

There is a big party planned in Dallas on April 25th benefitting Kids’ Chance of Texas.  The Firm is a founding sponsor of Kids’ Chance and of the event and invites you to join the party.  Commissioner Brannon will be there, as will our first scholarship recipient, Christi Campbell.  Music, drinks, appetizers and a silent auction are planned. Tickets are only $30 per person!  If you want to attend, send an email tojstone@slsaustin.com or visit the Kids’ Chance website atwww.kidschanceoftexas.org. This is your opportunity to support this wonderful charity.  Together, we are working to ensure that as many kids as possible who have had a parent catastrophically injured or killed on the job in Texas can continue their educations after high school.
 
For more information about the BigGive fundraiser, please check out the website at:http://www.kidschanceoftexas.org/bigive/

The Texas Third Court of Appeals issued its opinion in the lead Texas air ambulance case on January 31, 2018.PHI Air Medical, LLC v. Texas Mutual Insurance Company, Hartford Underwriters Insurance Company, TASB Risk Management Fund, Transportation Insurance Company, Truck Insurance Exchange, Twin City Fire Insurance Company, Valley Forge Insurance Company, et al., No. 03-17-00081-CV, (Tex. App.—Austin Jan. 31, 2018, no pet. h.).

The court of appeals’ opinion reverses the trial court’s judgment in favor of the carriers and remands the case to the trial court for further proceedings.  The court of appeals held that the federal Airline Deregulation Act (ADA) preempts Texas’ workers’ compensation laws that regulate reimbursement to air ambulance carriers.  The court also held that the McCarran-Ferguson Act (MFA) does not prevent ADA preemption in this case.  Whether the MFA applies to prevent inadvertent federal preemption depends on whether the state laws regulate the “business of insurance.”  The court held that the Texas statutes that direct workers’ compensation carriers how much to reimburse health care providers do not regulate the “business of insurance,” although the basis for that decision is not entirely clear.           

The U.S. Supreme Court has held that state laws that prescribe the terms of the insurance policy directly regulate the “business of insurance.”  The carriers argued that Texas’ workers’ compensation laws do precisely that in this case.  The terms of the workers’ compensation policy are literally the Workers’ Compensation Act and Division rules.  Workers’ compensation carriers are required to use a standard policy written by the Texas Department of Insurance which provides that carriers must pay the benefits required by the workers’ compensation law.  The policy itself is only two pages long because it incorporates Texas’ workers’ compensation laws.  Thus, the state actually writes the terms of the workers’ compensation policy which the U.S. Supreme Court has recognized falls squarely within the business of insurance.     

The court of appeals’ opinion leaves numerous unanswered questions including the Division’s authority to decide air ambulance fee disputes if it can’t apply its fee guidelines to determine reimbursement; the standards to be applied to determine reimbursement in the absence of the Division’s fee guidelines; and whether the carriers have any obligation to pay more than the amount provided by the Division’s fee guidelines since that is all they are contractually obligated to pay under their policies.

The insurance carriers will likely file a motion for rehearing with the court and if necessary, a petition for review in the Texas Supreme Court.  The federal preemption issue is also pending in federal district court in Austin in the case of Air Evac EMS, Inc. v. State of Texas, Ex Rel. Department of Insurance, Division of Workers' Compensation et al.  Briefing in that case is currently scheduled to end May 7, 2018.

-James Loughlin, Stone Loughlin & Swanson, LLP.

Arlington physician Arnold J. Morris, M.D. has failed – again – in his effort to enjoin the Texas Medical Board from attempting to discipline him for allegedly over-prescribing medications. The United States Court of Appeals for the Fifth Circuit has affirmed the district court’s dismissal of Dr. Morris’ lawsuit against the Board. The decision would appear to clear the way for the Board to resume its disciplinary action against him.

In his request for an injunction to stop the Board proceeding, Dr. Morris had enlisted the help of State Representative William Zedler, District 96 (R-Arlington). According to the report of the U. S. magistrate judge, at a hearing on his motion for a preliminary injunction Dr. Morris called Representative Zedler as a witness to support his claim that the complaint against him was “ginned up.”  That testimony reportedly revealed that Representative Zedler had called and emailed the Board president about the Board’s investigation of Dr. Morris. 

Apparently this is not the first time that Representative Zedler has intervened on behalf of doctors who were investigated by the Board. According to the “Ethics Explorer” section of theTexas Tribune, Representative Zedler previously has requested confidential records from the Board in order to assist doctors who were being investigated and at least two of the doctors, who were not his constituents, had contributed to his campaign.

- David Swanson, Stone Loughlin & Swanson, LLP.

March 1, 2018  is the deadline by which insurance carriers must begin using the new and improved versions of Plain Language Notices (PLNs). The Division of Workers’ Compensation revised the notices in September 2017. Use of the revised forms was optional prior to March 1 but now is mandatory and use of the old forms is a potential administrative violation.

Ever seen an administrative violation from the Division of Workers’ Compensation and wondered how in the world it came up with the amount of the penalty? So have we. But that may be about to change. The Division is in the early stages of drafting amendments to rules that will require a change to its procedure for assessing such penalties. The amendments to Rule 180.8 and 180.26 will, among other things, require the Division to explain the factors it considered in determining the amount of the penalty. 

The amendments are in response to changes to Labor Code §415.021 that became effective September 1, 2017. Those legislative changes apparently were prompted by concerns from system participants that the Division’s determination of penalty amounts was arbitrary.  

The Division has posted informal working drafts of the amendments on its website. It is seeking comment on the drafts through March 7, 2018. You may send an email to InformalRuleComments@tdi.texas.gov to comment on the drafts.

- David Swanson, Stone Loughlin & Swanson, LLP.

Telemedicine is catching on. The Division of Workers’ Compensation is accepting public comment on a proposed rule that would expand its use in the workers’ compensation system. 

Broadly defined, telemedicine is a doctor’s use of a video system to examine a patient in a different location. It is already permitted in the Texas workers’ compensation system to some degree. Currently, however, it is limited to “underserved” areas – typically rural regions with insufficient access to health care providers. Proposed Rule 133.30 would eliminate this restriction and allow the use of telemedicine anywhere in Texas. 

The potential effects of this change are significant. For example, suppose – just suppose – that there was a chiropractor in Dallas to whom Claimant attorneys routinely referred their clients because the chiropractor was perceived to be Claimant-friendly, liberally prescribing treatment and doling out off-work slips. Would this proposed rule tempt Claimant attorneys in other cities to refer their clients to this chiropractor as well? Would the chiropractor in Dallas become the treating doctor for workers living in Waco, Tyler, and Abilene as a result? Only time will tell.

Proposed Rule 133.30 is scheduled to be published on the Division website by March 2, 2018. The Division will be accepting comments on the proposed rule through April 2, 2018. You may comment on the rule by sending an email toRulecomments@tdi.texas.gov.

-David Swanson, Stone Loughlin & Swanson, LLP.