State News : Texas

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.

A Houston couple has been indicted by  the Department of Justice, which  alleges  that the pair fraudulently billed the  federal government millions of dollars  for compound cream medications for injured workers.   
 
George and Marene Tompkins ran Piney Point Pharmacy on Fondren Road in Houston. They have been charged with conspiring to obtain illegitimate prescriptions for compound creams for which they billed the Department of Labor under the Federal Employee Compensation Act  (FECA), which is the federal workers’ compensation program. The couple allegedly billed the federal government over $23 million for those compound creams from 2009 to 2016. 

On February 21, George and Marene  appeared before a U.S. magistrate judge and entered pleas of not guilty. If convicted of the charges against them they reportedly face up to 20 years in federal prison. 

Piney Point Pharmacy specialized in compounding. George referred to himself as the “Compound King” on the pharmacy’s website and the pharmacy’s tagline was “Special Meds for Your Special Needs.”

- David Swanson, Stone Loughlin & Swanson, LLP.

The Division’s 14-month project to scan 19,634 boxes of records containing over two million claim files is nearing completion.  The paper files are from cases with injury dates between 1992 and 2005. 

In 2005, the Division began using an electronic management system and has been keeping digital versions of all paper files since that time. 

By law, the Division must maintain records for 50 years.  Files older than 1992 had previously been scanned onto microfilm, and the Division had been leasing a 24K square foot storage warehouse to house the records, at a cost of $300K/year.

~ This blog submission was prepared by Erin Shanley, an attorney with Stone Loughlin & Swanson, LLC, a law firm dedicated to representing self-insured employers, insurance carriers, and third party administrators in all matters related to workers’ compensation. Stone Loughlin & Swanson is a member of the National Workers’ Compensation Defense Network (NWCDN). If you have any questions about this submission or Texas workers’ compensation in general, please contact Erin by e-mailing her at eshanley@slsaustin.com or by calling her directly at (512) 343-1300.

According to a recent report from Columbia University, business travel may lead to serious medical conditions that require treatment and may even result in permanent disability.  The study found that people who travel for business two weeks or more a month report more symptoms of depression and anxiety than those who travel one to six nights a month.  They are also more likely to smoke, be sedentary, and report trouble sleeping.  Additionally, for those who consumed alcohol, extensive business travel was associated with symptoms of alcohol dependence. 

In Texas, employees engaged in business travel (i.e., a special mission) remain in the course and scope of employment for the duration of the special mission unless there has been a “deviation” from or abandonment of the course and scope of employment.   Aetna Cas. & Sur. Co. v. Orgon, 721 S.W.2d 572 (Tex. App.-Austin 1986, writ ref’d n.r.e.).   This is sometimes referred to as the principle of “continuous coverage.”  The "continuous coverage doctrine" extends workers’ compensation liability for injuries even when an employee is technically off duty. 

Bottom line: Employers and carriers should exercise safe protocols to prevent their employees from developing mental health issues, including alcoholism and depression, as there is now scientifically-backed evidence that business travel is a potential occupational hazard.

The results of the study are published online in the Journal of Occupational and Environmental Medicine.  (Andrew G. Rundle, Tracey A. Revenson, Michael Friedman. Business travel and behavioral and mental health. Journal of Occupational and Environmental Medicine, 2017; 1 DOI: 10.1097/JOM.0000000000001262.)

~ This blog submission was prepared by Erin Shanley, an attorney with Stone Loughlin & Swanson, LLC, a law firm dedicated to representing self-insured employers, insurance carriers, and third party administrators in all matters related to workers’ compensation. Stone Loughlin & Swanson is a member of the National Workers’ Compensation Defense Network (NWCDN). If you have any questions about this submission or Texas workers’ compensation in general, please contact Erin by e-mailing her at eshanley@slsaustin.com or by calling her directly at (512) 343-1300.

In the wake of Hurricane Harvey making landfall in numerous counties this past August, the Division had issued a bulletin directing insurance carriers and system participants to extend deadlines for medical examinations, authorize payment for pharmacies to dispense 90-day supplies of medications, reimburse for emergency and non-emergency health care services out of network, and expedite change-of-address processing.  Additionally, the bulletin had suspended deadlines for claims notifications and filing, electronic data reporting, medical and income payments, medical billing, and medical and income benefit disputes. 

The Division has issued a subsequent bulletin directing system participants to resume normal claims processing and dispute resolution operations effective January 10, 2018, stating that it is now practical and in the best interests of the workers’ compensation system to do so.  All standard workers’ compensation deadlines and procedures are now back in effect.

~ This blog submission was prepared by Erin Shanley, an attorney with Stone Loughlin & Swanson, LLC, a law firm dedicated to representing self-insured employers, insurance carriers, and third party administrators in all matters related to workers’ compensation. Stone Loughlin & Swanson is a member of the National Workers’ Compensation Defense Network (NWCDN). If you have any questions about this submission or Texas workers’ compensation in general, please contact Erin by e-mailing her at eshanley@slsaustin.com or by calling her directly at (512) 343-1300.