State News : Texas

This is good news, except it is a shame you have to go to court to get an agreement like this.  In this case, the Division appealed an agreed judgment entered by a trial court where the claimant and the carrier agreed to a reduced payment in amount less than the full amount of SIBs would have been. The Division claimed that the Labor Code is clear on this point, and SIBs can only be paid in the full amount or not at all. The Dallas Court of Appeals rejected all of the Division’s arguments and held that, while neither the Division nor the court could award partial SIBs, nothing prevented the parties from settling to an agreed partial amount.  Tex. Dept. of Ins, Div. of Workers’ Comp. v. Jones, 2014 WL 5768728 (Tex. App.–Dallas 2014, no pet. h.) (mem. op.).

Circumstantial evidence is enough to support a claim for retaliatory discharge. The claimant reported a work injury and was terminated after presenting a doctor’s note keeping him off work. He then brought suit against his employer alleging that he was terminated in retaliation for filing a workers’ compensation claim.   A claim for retaliatory discharge requires that filing a workers’ compensation claim isa reason, but not necessarily the only reason, that the employee was terminated. The burden is on the employee to show the causal connection, the burden then shifts to the employer to show that there was a legitimate reason for the termination, and if it does so the burden then shifts back to the employee to show that the reason was a mere pretext. The Austin Court of Appeals reversed and remanded a summary judgment in favor of the employer because the employer’s stated reason, that the employee was unable to perform his job, was not a nondiscriminatory reason as a matter of law where there was not a uniformly applied termination policy.Phillips v. SACHEM, Inc., 2014 WL  7464035 (Tex. App.–Austin 2014, no pet.).

An injured worker brought extra-contractual claims against her worker’s compensation carrier after the Division held that her injury was compensable.  She claimed damages from misrepresentations under the Insurance Code and unconscionability under the DTPA.  The San Antonio Court of Appeals held that a denial of compensability or payment does not constitute an actionable misrepresentation of the policy, even when later reversed by the DWC. Questions that deal with whether a claim falls within the scope of coverage is not an interpretation of the policy. The court also held that an alleged failure to investigate a claim does not defeat the Supreme Court’sRuttiger holding. In other words, “the sole remedy against [the carrier] for failing to timely pay benefits to [the claimant] is under the Workers’ Compensation Act.”  Vause v. Liberty Mutual Ins. Corp., 2014 WL 6687598 (Tex. App.–San Antonio 2014, no pet.).

Anybody remember Blazing Saddles? The Court will hear argument from Seabright Insurance Company that section 401.011(12) of the Labor Code, regarding course and scope of employment, is ambiguous.  A worker was driving other employees in a company truck from a hotel paid for by the company to a jobsite when the truck was struck by a semi, leading to his death.  Seabright denied the beneficiary’s claim for death benefits because the worker was traveling at the time of the accident and was thus not in the course and scope of employment. In its attempt to avoid paying death benefits to the deceased worker’s beneficiary, Seabright argues thatLeordeanu v. American  Protection  Insurance  Company  has  led  to  confusion  over  section 401.011(12) among Texas’ appellate courts. The Court will determine if the ‘but for’ test is appropriate in this situation; that is, but for his employment, the deceased worker would not have been in the situation that led to his death.  The case isSeabright Insurance Company v. Maxima Lopez, appealed from the Fourth Court of Appeals, Cause No. 01-12-00863-CV and the 229th District Court of Starr County, Cause No. DC-08-484.

As expected, Commissioner Brannan also adopted new Division Rule 131.1 regarding initiation or denial of Lifetime Income Benefits.  Under the new rule, an insurance carrier must review an injured worker’s eligibility for LIBs in a timely manner and review all statutory criteria.  Carriers will have to develop criteria to narrow down which claims may have LIBs exposure. If the insurance carrier believes the injured worker is entitled to LIBs, it shall initiate payment within 15 days even if the claimant has not requested LIBs.  But in the case where an injured worker requests LIBs in writing, the carrier has 60 days to determine eligibility.  Any denial must be on form PLN-4.

A new PLN-4, Notice Regarding Eligibility for Lifetime Income Benefits, has been finalized. The revisions were made to ensure that the injured worker and the Division had a complete explanation as to why the insurance carrier is denying LIBs.  The revised form adds a checkbox to clearly show that eligibility for LIBs is denied followed by a space for a full and complete statement.

States have been cracking down on the lucrative practice of physician dispensing of prescription drugs, a practice largely limited to workers’ compensation doctors. Some doctors are prescribing novel doses of common drugs for which they can charge more. For example, muscle relaxant cyclobenzaprine is commonly prescribed in 5 and 10 milligram doses. However, physicians are dispensing new 7.5 milligram doses of the medication for which they can charge nearly 5 times as much, despite the lack of any medical evidence that the new dose is any more effective.  Another move we are seeing is physicians prescribing complex compounded medications, such as topical creams to treat pain, also despite evidence that these creams are not effective.

Nova Healthcare Management / Nova Medical Centers of Houston, Texas pled guilty to felony worker’s compensation fraud. An investigation by Texas Mutual revealed that Nova was billing for one-on-one physical therapy but was actually providing less expensive group therapy. Under the plea agreement, Nova has withdrawn from the Texas Star Network, repaid $6.5 million to Texas Mutual, and paid a $5,000 fine.

Dr. Marshall was ordered by DWC not to accept new patients nor participate in the comp system as a health care provider. DWC issued a violation order on the basis that he administered improper, unreasonable or medically unnecessary treatment by treating an injured employee for a diagnosis not supported by the medical record.

. . . was fined $1,000 and ordered to complete medical training because according to DWC he failed to provide acceptable health care to an injured employee by improperly utilizing diagnostic tests not supported by the medical record or evidence- based criteria. This is a familiar scenario.

Dallas Medical Center apparently ignored a refund request filed by a carrier, and ended up on December 2, 2014 with an order to pay a $15,000 fine.  It is easy to forget that if a carrier makes a refund request against a provider and the provider fails to appeal the request to the carrier, or appeals a refund request and the carrier denies the appeal, the requested refund must be paid.  The provider’s only remedy after paying the refund is to take the refund request to dispute resolution for a final determination by the agency– it cannot refuse to pay without risking the ire of the DWC (and a hefty fine).