State News : Texas

The Appeals Panel has set a very high bar for relief from a benefit dispute agreement. A day before
a CCH, the claimant and the carrier, both represented by attorneys, entered a benefit dispute
agreement to resolve extent of injury, disability, and bona fide offer of employment issues. An
earlier CCH had already been continued to allow time for an RME to take place. The RME had
occurred, but subpoenas for medical records were still outstanding. After the benefit dispute
agreement was finalized, the carrier received the subpoenaed medical records that revealed extensive
preexisting conditions that had not been disclosed by the claimant.
The carrier sought relief from the benefit dispute agreement based on the claimant’s fraud in lying
to the DD and RME doctor regarding his prior history of injury. The Hearing Officer agreed, and
found that newly-discovered evidence constituted good cause for relieving the carrier from the
effects of the benefit dispute agreement. The RME doctor testified that she would have reached a
very different conclusion had she reviewed the records showing extensive preexisting injury.
The Appeals Panel disagreed and reversed the Hearing Officer. The Appeals Panel held that the
evidence was not “newly-discovered,” because the carrier knew that there were additional medical
records before entering the benefit dispute agreement. That is, the carrier had subpoenaed records
before entering the agreement, and thus, the carrier was aware that there was additional evidence
in existence. The Appeals Panel did not address the claimant’s fraud in lying to the DD and RME
doctors, but noted that the carrier’s allegation of fraud was also based on the “newly-discovered
evidence,” and was apparently excused by the carrier’s lack of diligence in obtaining those records.
Appeal No. 151634, decided October 6, 2015.

“Emoticons” (the little happy and sad faces made of punctuation) and “emojis” (a picture version
of emoticons) that we use in text messages and Facebook posts from time to time, are now being
used as evidence in court. Does something make you happy or sad? This could be relevant to
determining if you’re liable under the law.
In the criminal context, a Kentucky woman was accused of harming her child and attempted to show
that she loved her child (and thus could not be guilty) by showing the jury tweets about her child’s
condition with a crying face emoji. In the civil litigation context, use of emoji has been used to
show intent in contract disputes. A “:P” was a successful defense in a defamation suit to show that
the comments were clearly a joke.
Courts in various jurisdictions have allowed introduction of emojis as evidence. However, just
because emojis are admissible does not mean they necessarily prove anything. Remember the
Kentucky mother? She’s now sending her crying faces from a jail cell.

Effective February 1, 2016, Fentanyl transdermal patches and MS-Contin will have their status
changed to “N.” Beginning February 1, 2016, prescriptions for either of these drugs will require
preauthorization.

Many companies in Texas elect to opt out of workers’ compensation. Oklahoma recently allowed
companies to do the same, and both South Carolina and Tennessee are considering similar statutory
changes. A Dallas attorney, along with a coalition of executives from some of the country’s biggest
employers, is campaigning for similar changes in a dozen states.
An investigation by NPR and ProPublica found that the employee benefit plans of the opting-out
employers lower worker benefits, with little to no oversight. Gone is the lifetime medical care
promised by the workers’ compensation system. Many injuries that are covered under workers’
compensation, such as infections and carpal tunnel syndrome, would receive no benefits under the
employee benefit plans. Under these plans, employers are able to direct medical care by selecting
the treating doctor, and in some cases, accompany the injured worker to all treatment appointments.
Reporting deadlines can be shortened to as little as end-of-shift or 24 hours, versus the 30-day
reporting window under workers’ compensation.
If any of this sounds familiar, it should; this is the broken system that worker’s compensation was
created to fix.

The Division of Workers Compensation has brought on a few new Hearing Officers. Travis Dupree
has joined the Midland Field Office, and will be covering Abiline and San Angelo as well. Mr.
Dupree is a 2007 graduate of the Mississippi College School of Law and has been licensed to
practice law in Texas since November of 2008. Amanda Barlow has joined the Dallas and Fort
Worth Field Offices. Ms. Burgess earned her J.D. in 2007 from Texas Wesleyan University. Three
new Hearing Officers will be joining the Houston West Field Office and assisting with the
Beaumont Field Office. Robin Burgess, a 2004 graduate of the City University of New York School
of Law, has been licensed in Texas since April of 2012. Early Moye finished law school in 1987
at the University of Houston. Francisca Okonkwo attended Texas Southern University and comes
to the Division from the Texas Attorney General.

A Houston area practitioner, Dr. Rezik Saqer, has been charged with operating illegal pill mills. Dr.
Saqer runs two pain management clinics in the Houston area. One of Dr. Saqer’s patients was
charged with intoxication manslaughter for a fatal crash that killed a family of four in Montgomery
County, Texas. An investigation into the crash, where oxycodone and valium were found, led
investigators to Dr. Saqer.
When searching Dr. Saqer’s clinic, Integra Medical Clinic, they found illegal quantities of opiates.
Investigators also found evidence that he would pre-sign prescriptions and treatment notes, allowing
his patients to be seen by unlicensed individuals. Dr. Saqer’s license to practice medicine has been
suspended due to this continued practice, on the basis that it poses a risk to public welfare.

The Division is accepting comment through November 9th on proposed Rule changes to Labor Code
Section 408.103 from the 84th legislature. Now, to be eligible for the higher (75%) rate of TIBs
during the first 26 weeks, a worker’s wages must be below $10.00 per hour instead of the current
$8.50. The proposed changes to Rules 129.3 and 129.11 implement this statutory change. The
amended rules will apply to injuries on or after September 1, 2015.

In a ruling that many might find counterintuitive, a New Jersey court has ruled that an adult dancer
is an employee of the establishment where she danced, and not an independent contractor, for
purposes of workers’ compensation. The court found that the establishment had the right to exercise
control over the injured worker. Despite the fact that the injured worker was free to set her own
schedule and worked solely for tips, she “was not free to come and go as she pleased” once her shift
began, and she “was required to perform both pole and couch dances.”

A controversial deal between the Travis County District Attorney’s Office and Texas Mutual
Insurance Company has been suspended. Going back to at least 2000, Texas Mutual has paid the
DA’s office to prosecute “crimes committed against the company,” such as fraud. Under the
arrangement, investigators directly employed by Texas Mutual gather information and provide a
referral to the DA. The controversy surrounds the fact that only crimes committed against Texas
Mutual, and not all insurers, are being pursued. In 2014, payments from Texas Mutual to the DA’s
office totaled $430,000.

A Cautionary Tale for Non-Subscribers – The Houston Court of Appeals recently affirmed
a $680,000 judgment in a negligence suit against Katy Springs & Manufacturing, Inc. Had the
company acquired workers’ compensation insurance for its employees, the suit would have been
barred by the exclusive remedy provisions of the Labor Code. The accident involved what the
opinion describes to be a company-made wire real that lacked any safety features and which was
recognized by several Katy Springs employees as being unsafe. Katy Springs & Manufacturing, Inc.
V. Joseph Favolora, Houston Court of Appeals – 14th Dist. 2015 WL 5093232.
Big Brother is Watching – Dr. Howard Douglas is the co-founder and medical director of
Western Medical Evaluators, Inc. (WME), a company that provided medical services in workers’
compensation disputes to entities insured by Texas Mutual Insurance Company. WME contracted
with designated doctors to perform designated doctor exams for workers’ compensation claims. Dr.
Douglas routinely billed the maximum compensation of four hours for every functional capacity
evaluation (FCE) performed, even though Texas Mutual’s investigation revealed that the average
time for an FCE by a WME technician was only thirty-nine minutes. Dr. Douglas was convicted
of defrauding Texas Mutual, a third degree felony, and the Court of Criminal Appeals affirmed.
Douglas v. State, No. 03-13-00092-CR, 2105 WL 5097573 (Tex. App.– Dallas August 26, 2015).
Employers and Carriers Beware – Remember that in In re XL Specialty Ins. Co., the Texas
Supreme Court determined that in the statutory workers’ compensation insurance policy context,
the insurer is not the representative of the insured; rather, the insurer is the client and party to a
pending workers’ compensation matter and retains counsel on its own behalf. In a lawsuit involving
a standard liability insurance policy, only the insured is a party to the case, and the insurer retains
counsel on the insured’s behalf. So, in workers’ compensation cases, the communication between
the insurer and the employer is not privileged, but in other cases involving employer liability
coverage, such communications are privileged. We note that attempts at legislation to have the
privilege apply in workers’ compensation failed this past legislative session.