State News : Texas

Governor Greg Abbott has reappointed Ryan Brannan as Commissioner of Workers’ Compensation
for a term to expire February 1, 2017. Mr. Brannan was originally appointed by Governor Rick Perry
in 2014.

This month a Houston court of appeals rejected the Division’s definition of the term “imbecility”
for purposes of determining entitlement to Lifetime Income Benefits.
The case involved Francisco Chamul, a brick mason who fell from a scaffold onto a concrete slab
ten feet below, suffering multiple skull fractures and consequential brain injury. According to a
designated doctor he now functions at the level of an 11 or 12 year-old and will require a caretaker
for the rest of his life. He applied for LIBs.
Under Labor Code §408.161, LIBs are payable for an injury to the brain resulting in incurable
“insanity or imbecility.” However, the statute does not define the term “imbecile.”
A Division hearing officer found that Chamul was not entitled to LIBs. The hearing officer cited
prior decisions of the Appeals Panel which rely on a definition of the term “imbecile” in the 1991
edition of Webster’s Ninth New Collegiate Dictionary. That dictionary defines “imbecile” as a
“mentally deficient person, especially a feebleminded person having a mental age of three to seven
years and requiring supervision in the performance of routine daily tasks or caring for himself.” The
hearing officer determined that Chamul had not been shown to exhibit the mental age range in
question (a mental age of three to seven years).
The court of appeals reversed and remanded to the Division for further proceedings. It noted that
the Legislature added imbecility as a criterion for LIBs in 1917 and that dictionaries written at that
time included more generalized definitions of the term “imbecile” and did not limit the term to the
mental age range of three to seven years. According to the court, the 1991 dictionary on which the
Division relied is “not an appropriate source to discern the meaning of a term incorporated into a
statute more than 70 years earlier.”
Chamul v. Amerisure Mutual Ins. Co.

The Division has amended Rule 129.3, regarding Amount of Temporary Income Benefits, to
increase the hourly wage that determines whether a worker is paid TIBs at the rate of 70% or 75%
of the Average Weekly Wage for the first 26 weeks of benefits. The rule implements the amendment
to Labor Code section 408.103 which became effective September 1, 2015 and which raised the
threshold from $8.50/hour to $10.00/hour for claims with a date of injury of September 1, 2015 or
later.

This month a California judge sentenced Dr. Hsiu-Ying “Lisa” Tseng to 30 years to life in prison
for the murders of three of her patients who fatally overdosed. Tseng is among a small but growing
number of doctors charged with murder for prescribing painkillers that killed patients. She is
reported to be the first doctor in the United States to be convicted of murder by over-prescribing
drugs.

Oklahoma’s system of allowing businesses to opt out of the state workers’ compensation program
(the “Oklahoma Opt-Out”) is unconstitutional, the Oklahoma Workers’ Compensation Commission
said on February 26.
Under the Oklahoma statute, an employer may opt out of the workers’ compensation system but
retain exclusive remedy protections if they provide workers with an alternate benefits plan. Some
have said the system allows Oklahoma employers to “have their cake and eat it too.”
According to the Commission, the opt-out provision established a dual system in which injured
workers are

In Appeals Panel Decision No. 152184, decided December 29, 2015, t he Appeals Panel reversed
the hearing officer’s determination that the employer tendered a valid bona fide offer of employment
(BFOE) to the claimant, and rendered a new decision that the employer did not tender a BFOE to
the claimant. The hearing officer had found that the employer had issued two offers of employment,
both of which had complied with Rule 129.6.
The two offers, dated approximately one week apart, stated, “The position will entail the following
physical and time requirements” and then listed various work restrictions as noted on the DWC-73,
such as “No standing for more than 1 hour per day,” “No [kneeling]/squatting more than 1 hour per
day,” “No pushing/pulling more than 2 hours per day,” “Must wear splint/cast at work,” and “No
driving or operating heavy equipment.” The claimant appealed the hearing officer’s determination
that these were valid BFOEs, arguing that both offers of employment fail to comply with Rule
129.6(c)(4) because they merely list the restrictions given by the claimant’s treating doctor rather
than state the actual physical and time requirements that the position will entail.The Appeals Panel agreed, noting that Rule 129.6 sets out the requirements for a BFOE and
provides, in part, that “an employer’s offer of modified duty shall be made to the employee in
writing and in the form and manner prescribed by the [Division],” that “a copy of the [DWC-73] on
which the offer is being based shall be included with the offer as well as . . . a description of the
physical and time requirements that the position will entail.”
The Appeals Panel noted that it has previously held that the language in Rule 129.6 is clear and
unambiguous, and that the rule “contains no exception for failing to strictly comply with its
requirements.” In this case, neither offer of employment listed the physical and time requirements
the offered position would entail, nor did they state the specific job position that was being offered.
Instead, both offers of employment only listed restrictions of what the job would not entail, which
does not meet the requirement listed in Rule 129.6(c)(4). Accordingly, the employer did not tender
a BFOE to the claimant.
This decision is a reminder to carriers and employers to ensure their BFOEs to claimants include a
full description of the requirement of the offered position. It is not a bad idea to clarify that the
employee will not be required to perform duties that he/she is specifically prohibited from
performing as noted on the DWC-73; however, the job offer must also include the physical
requirements, time requirements, and state the specific job position that is being offered in order to
meet the requirements of a valid BFOE under Rule 129.6. Appeals Panel Decision No. 152184,
decided December 29, 2015.

At the request of the U.S. Food and Drug Administration (FDA), the Department of Justice filed a
complaint in the U.S. District Court for the Northern District of Texas on January 4, 2016, alleging
that Downing Labs LLC has been engaged in manufacturing drugs that, by virtue of their labeling and/or route of administration, purport to be or are intended to be sterile, but that fail to meet the
safety protections provided under federal law.
The complaint alleges, among other things, that Downing Labs and the individual defendants violate
the Act by introducing or delivering sterile drugs that are prepared, packed, or held under insanitary
conditions whereby they may have been contaminated with filth and/or rendered injurious to health.
The complaint also alleges the drugs are adulterated because the methods used in, or the facilities
or controls used for, their preparation do not comply with current good manufacturing practices
requirements. For example, during one of the inspections conducted by the FDA of Downing Labs
and its predecessor, NuVision Pharmacy Inc., test records showed excessively high levels of
endotoxins. Endotoxins are substances found in certain bacteria that can cause a wide variety of
serious reactions in humans, including high fever and shock. These products were not distributed.
In 2014, records showed that 19 lots of supposedly sterile drugs had tested positive for the pathogens
Staphylococcus haemolyticus and Nocardia nova. These products were not distributed, but the FDA
alleges that the company failed to adequately investigate the cause of these sterility problems. The
complaint alleges that Downing Labs has a long history of manufacturing drug products under
conditions that fall short of the minimum requirements to ensure safety and quality.
The permanent injunction requires Downing Labs and the individual defendants to bring their
processes into compliance with the law. Until then, the defendants are enjoined from manufacturing,
holding, or distributing drugs manufactured at or from their McEwen Road facility (located at
4001McEwen Road, Suite 110, Dallas, Texas). In addition, the FDA has been authorized to order
Downing Labs to stop drug manufacturing should it determine that Downing Labs has violated the
terms of the decree, and may also order Downing Labs to recall drugs or to destroy drugs that are
in the process of being manufactured.

On December 28, 2015, the Division announced that the interest and discount rate as of January 2,
2016 will be 4.19 %. The rate is effective as of January 1, 2016, and will remain in effect through
March 31, 2016. The rate was previously 3.96 %.
The Division is required to compute and publish the interest and discount rate quarterly, on January
1, April 1, July 1, and October 1. Prior to January 1, 1991, the rate was fixed at 4%. As of June 17,
2001, however, the Division is required to calculate the rate based on the treasury constant maturity
rate for one-year treasury bills.

A Dallas doctor and an Arlington pharmacist are among dozens charged in a "pill mill" operation
in Texas and Louisiana that allegedly hired homeless people to pose as patients and obtain
prescriptions for pain medications.
Richard Andrews, DO (of Dallas) and pharmacist Ndufola Kigham (of Arlington) were arrested on
January 20, 2016 on federal charges of conspiracy to distribute a controlled substance. The
indictment alleges that the clinic, McAllen Medical Clinic, allegedly handed out prescriptions for
more than 150,000 oxycodone pills between January 2013 and July 2014, despite knowing "there
was no legitimate medical purpose" for them. Prosecutors involved in the case described that these
operations typically utilize drivers to pick up recruits to pose as patients. The recruits are given
money to pay for their visit to the clinic, and are paid a fee (usually around $30) for their work. The
recruits are coached on what to say to get a specific prescription. The driver takes them to the
pharmacy and pays for the prescription; the drugs are then sold on the street for a profit. If convicted
of the conspiracy charges, Dr. Andrews and Dr. Kigham face up to 20 years in federal prison and
$1 million in fines.

Effective February 1, 2016, Fentanyl Transdermal Patches, MS-Contin, Levorphanol
(Levo-Dromoran), and Morphine ER/Naltrexone (Embeda) will change status from "Y" to "N" drugs
in the ODG's Appendix A. Accordingly, beginning February 1, 2016, prescriptions for these drugs
will require preauthorization. The Division is encouraging system participants to discuss and
coordinate the ongoing course of treatment of claimants who are currently being prescribed these
drugs.