State News : Texas

The CCH landscape is changing at a fairly rapid rate these days. The retirement of David Wagner
(Abilene), Carolyn Moore (Lubbock) and Cheryl Dean (Ft. Worth) ushers in a whole new crop of
judges. In Houston there are three new faces, Robin Burgess, Early Moye, and Francisca Okonkwo.
In Dallas/Fort Worth, DWC hired Amanda Barlow. Out West, Travis Dupree (Midland) and Teresa
Boone (Lubbock)joined the Hearings team. Finally, two traveling Hearing Officers, Mayson
Pearson and Dee Marlo Chico, will be filling in where needed. These changes should keep us on
our toes for several months to come.

Three Appeals Panel cases of interest in the past couple of months include:
APD 160228 (decided 3/24/16) - the hearing officer erred in appointing a new designated doctor
after a CCH. The Appeals Panel noted the Rule 127.5(d) provision that a previously assigned
designated doctor is on the claim unless and until the DWC authorizes or requires the doctor to stop
providing services on a claim. The rules set out the reasons the DWC can authorize or require a
doctor to get off a claim, none of which applied in this case. The Appeals Panel looked at the DRIS
notes that the self-insured introduced during the CCH, and determined that those notes did not reveal
any exception to the requirement that the initially appointed designated doctor should remain on the
claim. The hearing officer appointed the second designated doctor because he exercised his
discretion in appointing a new designated doctor because he was concerned that the initial doctor
might “take umbrage in being instructed that his opinion of extent was rejected.” The Appeals panel
held that the hearing officer’s reason for appointing a new doctor was not one of those set out in the
rules and reversed the decision that the second designated doctor was properly appointed and held
that the doctor was not properly appointed.
APD 160074 (decided 3/21/16) - the hearing officer erred in admitting testimony of a doctor whose
identity was not timely exchanged and the decision on extent of injury, disability, MMI and IR was
reversed and remanded for the hearing officer to make a decision without consideration of that
doctor’s evidence. The Appeals Panel determined that the doctor’s name was received by the
claimant after the normal business hours (10:00 p.m.) on the 15th day following the BRC, it was not
timely exchanged (because it must be exchanged within 15 days of the BRC) and the hearing officer
did not discuss the reasons for the late exchange or make a determination of good cause to allow
the testimony despite the lack of timely exchange. The Appeals Panel excluded that doctor’s
testimony completely. The decision is silent on whether there was a report from that doctor in
evidence.
APD 160057 (decided 3/10/16) - Sure hope this is a trend ! The hearing officer erred in holding that
the claimant had not reached MMI per the treating doctor referral’s alternate certification, where that
doctor’s opinion was based on the fact that the claimant needed further treatment (injections) but
the compensable injury was limited to a lumbar sprain/strain (the other lumbar spine conditions
having been determined not to be compensable and not having been appealed). As the designated
doctor had rendered multiple certifications, one of which was for the lumbar sprain/strain only, the
Appeals Panel reversed and rendered an decision using the designated doctor’s certification that
claimant had reached MMI and assigned an impairment rating based on the DWC-determined
compensable injury. Of special significance to the Appeals Panel was the fact that there was no
evidence establishing that the recommended injections were treatment for the lumbar sprain/strain,
which was the only compensable condition.

On April 14, 2016, the DWC held its Quarterly Insurance Carrier Meeting. The Division reported
that the 484 pending air ambulance disputes have been abated pending resolution of litigation in
state and federal court regarding reimbursement for those services. The Division reported
approximately 30 new air ambulance cases are being filed each month, which will also be abated.
Martha Luevano, Director of Medical Fee Dispute Resolution (MFDR) at DWC, also reminded
Carriers of the requirement to respond timely to medical fee disputes. It was noted that 12% of the
time MFDR does not receive a response. Since a response is required by rule, failure to respond
may result in an administrative violation.

With the recent torrential rains, we expect a larger crop of mosquitos this spring and summer. The
US Centers for Disease Control (CDC) issued an alert about the spread of the Zika virus, and Texas
is included in the CDC’s estimate of the areas in the United States where the mosquitos more likely
to spread viruses like Zika, dengue, chikungunya and other viruses can be found. The National
Institute for Occupational Safety & Health (NIOSH) recommends employers protect workers and
workers protect themselves by using preventative measures including: protecting equipment in the
field, removing debris from ditches, filling in areas that collect standing water, removing tires,
buckets and items that collect standing water, and placing holes in containers that could collect
standing water where mosquitos may breed. The CDC and NIOSH have also provided a link for
insect repellant safety at
http://www.cdc.gov/niosh/topics/outdoor/mosquito-borne/default.html.
In Texas, insect bites and stings have been held not to be acts of God and are compensable when
causation is established. It is not enough to show that the injury occurred while in the course and
scope of employment. A claimant must also prove that the injury was of such kind and character as
had to do with and originated in the employer's work, trade, business or profession. Standard Fire
Ins. Co. v. Cuellar, 468 S.W.2d 880 (Tex. Civ. App.-San Antonio 1971, writ ref'd n.r.e.). To show
causation, the claimant must prove that the conditions and obligations of the employment placed him or her in harm's way. Texas Workers' Comp. Ins. Fund v. Simon, 980 S.W.2d 730 (Tex. App.-San
Antonio 1998, no writ.) Employers whose workplace presents an increased risk for exposure to
mosquitos should be especially cautious (agricultural, outdoor maintenance, road construction) and
look into extra preventive measures.

Casey Sutterfield was a derrick hand who claimed a workers’ compensation injury while working
in North Dakota for a Texas Company, Teravita. He says that after his injury, his employer made
misrepresentations about the availability of workers’ compensation benefits and created a hostile
work environment. He was either fired or resigned, depending on whom you believe. He returned
home to Texas and filed a workers’ compensation claim.
The carrier denied the claim, which was the subject of a contested case hearing in which the DWC
ruled in favor of Mr. Sutterfield. Mr. Sutterfield then sued the employer, the carrier and two
adjusters individually for discriminatory conduct, negligent misrepresentation, and conspiracy. The
employer filed a motion to dismiss the suit asserting that it was based on the employer’s constitutional right to associate with the carrier and to petition the DWC, protected by the Texas
Citizens Participation Act (TCPA). The Dallas Court of Appeals agreed and, on April 1, 2016, the
Texas Supreme Court refused to review the Dallas Court’s ruling.
The TCPA was enacted to “encourage and safeguard the constitutional rights of persons to petition,
speak freely, associate freely, and otherwise participate in government to the maximum extent
permitted by law and, at the same time, protect the rights of a person to file meritorious lawsuits for
demonstrable injury.” The Dallas Court said that participation in a workers’ compensation hearing
at the DWC was an exercise of the employer’s right to petition and that testimony at that hearing
was “an absolutely privileged communication.” Mr. Sutterfield argued that his claims against the
employer were exempt under the TCPA because that act expressly exempts actions brought “under
the Insurance Code or arising out of an insurance contract” from its protection. The Dallas Court
disagreed, holding that his lawsuit was not brought under the Insurance Code, rather it was brought
under the Texas Labor Code and common law and he sought damages, not under the insurance
contract between the employer and carrier, but under the provisions of the Labor Code.
The Dallas Court dismissed Mr. Sutterfield’s conspiracy claim and his claim for employment
discrimination by presenting false testimony during the claim process because the TCPA protected
the employer during the hearing process at the administrative level. The court refused to dismiss
the employment discrimination claims regarding the hostile work environment, representations that
he was not entitled to pursue benefits under the Workers’ Compensation Act and wrongful discharge
as well as the negligent misrepresentation claims, as those were based on statements made outside
the DWC proceedings, and were not protected by the TCPA. The entire opinion can be found at
Tervita, LLC v. Sutterfield, 482 S.W.3d 280 (Dallas App. - 2015, pet. ref’d).

In February, we told you about the Oklahoma Opt-Out statute being ruled unconstitutional by the
Oklahoma Workers’ Compensation Commission. The next move? An appeal to the Oklahoma
Supreme Court filed by Dillard’s, the employer in that case, alleging that the Commission did not
have jurisdiction to strike down the beleaguered statute.
The Oklahoma Supreme Court seems to have tipped its hand, however, on how it will decide the
issue. In another case, decided on April 19, 2016, the Oklahoma high court held that the state’s
Workers’ Compensation Commission had the power to determine whether a provision of the state’s
workers’ compensation law was being unconstitutionally applied to a party in a proceeding before
the Commission.
Many speculate that the Oklahoma Attorney General sees the writing on the wall and anticipates an
unfavorable ruling by the Supreme Court, as evidenced by a Motion for a Stay of the Proceedings
in the Oklahoma Supreme Court. The AG has asked for an additional two months to allow the
Oklahoma Legislature to consider amendments that would address some of the key issues. In other
words, they want time to see if the Legislature can fix the offending portions of the statute that
resulted in the Commission’s decision that the statute was unconstitutional. Of course, pending that
stay, all Opt Out case decisions are on hold at the Commission level pending the outcome of the
Dillard’s appeal.

The widow and son of a deceased employee receiving workers’ compensation death benefits from
Texas Mutual recovered a settlement from a third-party. Texas Mutual asserted its statutory
subrogation rights and suspended benefits based on its future credit. The widow and son brought
bad faith claims against Texas Mutual. Texas Mutual filed a motion to dismiss on the grounds that
the plaintiffs’ claims fall within the exclusive jurisdiction of the Division of Workers’
Compensation. The trial court denied Texas Mutual’s motion to dismiss. Texas Mutual filed a
petition for writ of mandamus against the trial court judge which the El Paso Court of Appeals
conditionally granted. Citing the Texas Supreme Court cases of Ruttiger, Morris, and most recently,
In re Crawford, the court of appeals stated that the Division has exclusive jurisdiction over any
cause of action or claim which arises from the investigation, handling, or settlement of a workers’
compensation claim. The court noted that in deciding whether a cause of action falls within the
exclusive jurisdiction of the Division, it must look at the substance of the claim rather than the label
assigned to it by the plaintiffs. Here, plaintiffs’ claims, no matter how artfully pled, arose from
Texas Mutual’s assertion of its subrogation interest and suspension of benefits, issues over which
the Division has exclusive jurisdiction.
In re Texas Mutual Insurance Co., No. 08–15–00343–CV, 2016 WL 921317 (Tex. App.--El Paso
Mar. 9, 2016, no pet. h.).

Ronald Santorsola signed an employment agreement which required arbitration of claims alleging
workers' compensation retaliation. He reported an injury two months after he was hired and filed
a workers' compensation claim. A month later, he was terminated. He sued his former employer
under section 451.001 of the Texas Labor Code, alleging that he was terminated for filing a workers'
compensation claim. His employer sought to enforce the arbitration agreement. Mr. Santorsola
argued the agreement was unconscionable and unenforceable because it contained an agreement
requiring him to split the arbitrator's fee with his former employer that would deter him from
arbitrating his claim because he would not be able to afford it. The trial court agreed with Mr.
Santorsola ruling that the agreement was unconscionable and unenforceable. The Corpus Christi
Court of Appeals held that the trial court did not abuse its discretion in so ruling because the
fee-splitting agreement contained no cap on the amount the employee would be required to pay and
no provision allowing the arbitrator to modify the terms of payment.
AOF Services, LLC, v. Santorsola, No. 13–14–00641–CV, 2016 WL 1165829 (Tex. App.--Corpus
Christi Mar. 24, 2016, no pet. h.).

Marisa Lopez-Wagley has been named Deputy Commissioner of Enforcement. The Division’s
enforcement section which was managed by TDI will once again be managed by the Division.
Nick Canaday has been hired as the Division’s General Counsel to replace Dirk Johnson. Mr.
Canaday represented the Division while at the Office of the Attorney General and has many years
of workers’ compensation experience in private practice. He also has the rare distinction of having
successfully argued a case to the United States Supreme Court.

The Division is seeking input on the development of a new Compound Medications Plan-Based
Audit for physicians that prescribe compound drugs.
Many of you are probably familiar with the recent increase in the number of compound drugs being
prescribed by some physicians. By far, the most common type of compound drug being prescribed
is topical creams. These are usually pain creams or scar creams. These creams are often billed at
astronomical sums, sometimes over $10,000.00 for a one month supply. These creams often contain
common, inexpensive ingredients and have no proven efficacy over FDA approved drugs.
CBS News ran a national story last year on insurance companies receiving outrageous billing for
unwanted prescription creams. The story reported on a Dallas compounding pharmacy under federal
investigation for its practices.
The ODG Treatment Guidelines do not recommend compound drugs as a first line therapy. Rather,
commercially available, FDA-approved drugs should be given an adequate trial. The ODG also
notes,
Recently, some pharmacies have been making and marketing stock compound drugs
for the WC patient population. Among the FDA “Red Flags” for Enforcement Action
on Compounded Drugs is: "Compounding drugs in anticipation of receiving
prescriptions, except in very limited quantities in relation to amounts compounded
after receiving valid prescriptions."
One has to wonder whether the physicians prescribing these compound creams have some
motivation for doing so other than the patient’s best interests. These physicians should keep in mind
that if they have a compensation arrangement with or financial interest in the pharmacy, they are
required to disclose it in accordance with DWC Rule 180.24.