State News

As many of you know, a broad-based conference was recently held in Dallas by invitation only to

discuss common national issues in workers’ compensation in light of a perceived trend to “opt-out”

plans and the specter of nationalization or doing away with a workers’ compensation system altogether. SLS partner Jane Stone was invited to the Summit as a representative of the National

Workers’ Compensation Defense Network. You may have been following the progress of the

Summit on Bob Wilson’s website. The purpose was to open a dialogue as to what is right in

worker’s compensation programs, and what can be improved. The discussions were lively to say

the least, given that the attendees were so diverse in their views and experiences. The conversations

lasted for 2 days among regulators, judges, insurance professionals, physicians, academics, union

representatives, lawyers (from all sides), and injured workers (both satisfied with the system and

unhappy with it). After the initial conference, the attendees responded to a survey to determine the

priority of topics that were most important. The results of the survey will be published sometime

after July 4th.

Treatment for opioid dependence has long been an issue in workers’ compensation. Now that the

FDA has approved implants which will provide a constant, low dose of the drug buprenorphine to

a patient who is already stable on other forms of the drug, such as pills or sublingual films, requests

for the implant should begin to show up in preauthorization requests, given that buprenorphine is

an “N” drug.

The State Office of Administrative Hearings recently decided to deny payment for compounded

medications which are usually various topical creams which are touted as relieving pain or healing

scars. Texas insurance carriers have been seeing bills of more than $12,000 for a one month

prescription. It was thought by some that so long as the compound didn’t contain an “N” drug from

the DWC’s closed formulary, preauthorization under DWC Rule 134.600 was not required. But the

insurance carrier in this case decided to deny payment based on the defense that Rule 134.600

requires that investigational or experimental drugs be preauthorized. SOAH determined, based on

expert testimony from Dr. Suzanne Novak and her expertise in the application of the ODG treatment

guidelines, that compounded drugs are by their very nature investigational and experimental. That

being the case, the creams would require preauthorization. Many in the pharmacy and treatment

industries disagree, but for now, at least we know which way the wind is blowing.

The Texas Supreme Court issued a decision blowing apart an attempt at settlement of a partial SIBs

quarter. Bonnie Jones and the workers’ comp carrier had taken a dispute over the 14th quarter of

SIBs through the agency and into district court. The DWC had determined that Ms. Jones was not entitled to benefits for that quarter and Ms. Jones took the case up. In the district court proceedings,

Ms. Jones agreed to a partial payment for the quarter and the proposed judgment incorporating the

settlement was sent to the DWC. The Labor Code requires that all proposed judgments be submitted

to the DWC so the agency can decide if there is a reason to intervene in the case. After reviewing

the proposed judgment, the DWC exercised its right to intervene and oppose the judgment on the

basis that the agency had already found that Jones had not fulfilled the mandatory work search

requirements for the 14th quarter, and that a partial SIBs award, even if both parties agreed, “flouts

the statutory formula’s edict to calculate the monetary entitlement in a precise way.” The trial court

went ahead and granted the judgment anyway, and the court of appeals affirmed, citing the longstanding

general policy of encouraging settlement. But, as stated in the Supreme Court’s opinion,

the trial court and court of appeals“ignor[ed] the particularities that the revamped workers’ comp

scheme provides.” Bottom line: SIBs entitlement is all or nothing for each quarter – no partial

settlements allowed. One wonders whether the parties attempted the same settlement at the agency

level. It seems an odd case for the agency to spend resources to pursue what seems to be an issue

of minor significance. Texas Dept. of Ins., Division of Workers’ Compensation v. Bonnie Jones and

American Home Assurance Company, (Tex. 2016) No. 15-0025, opinion issued June 24, 2016.

So far, all we know is that the scam involved Federal workers’ compensation claims, but it is hard

to believe that Texas workers’ comp was not hit as well. More to come on that, but in the meantime,

spread the word. Attorney Tshombe Anderson was arrested last Friday, and his wife Brenda

Anderson and sister Lydia Bankhead are in federal custody. The fronts they are alleged to have used

were Best First Administration Durable Medical Equipment of Austin, Union Medical Supplies &

Equipment LLC, Sky-Care Medical Supplies & Equipment LLC, and American Federal Union

Claims Advocates LLC. This story ran in the Dallas Morning News, and here’s the link:

http://crimeblog.dallasnews.com/2015/08/dallas-attorney-and-family-members-charged-with-defraudingworkers-

comp-out-of-22-million.html/ .

Lois Scafuri filed three workers’ compensation claims alleging occupational exposures as a sales assistant caused her severe neck pathology.  She worked at the Short Hills Mall for two employers: Sisley Cosmetics and Neiman Marcus Group.  She later worked for Bloomingdale’s/Macy’s in the same capacity.  All three employers denied her claims asserting that her neck pathology was simply the result of the natural aging process.

Scafuri did actually have a truamatic accident on August 3, 2005 when she slipped in the stockroom and struck her head on a metal shelving unit.  She did not, however, file a workers’ compensation claim and obtained treatment on her own.  She claimed that she was afraid she would be fired had she filed a claim at that time.  An MRI done five months after the fall revealed cervical spondylolisthesis and a disc protrusion at C3-4 with compression of the spinal cord at C4-5.  She had a cervical fusion at C4-5 and C5-6.

In November 2006 she was diagnosed with myelomacia, which is a softening of the spinal cord.  Six months later she left Sisley Cosmetics and Neiman Marcus Group to work for Bloomingdale’s/Macy’s, and she only worked there until November 2007. Her neck continued to worsen and she had another fusion surgery in December 2007. She filed for and received Social Security Disability benefits.

Not until June 2008 did she bring her occupational claims against her three employers, but by then it was too late to file for the specific accident in 2005.   She claimed that doing make-up applications, facials, packing and unpacking boxes, and lifting boxes containing small cosmetics caused or aggravated her neck condition.  Respondent Bloomingdale’s produced witnesses from the same department disputing the physical nature of the job.  The Judge of Compensation ruled that her work activities did not contribute to her disability under N.J.S.A. 34:15-31, the occupational provision of the New Jersey statute.  The judge also did not accept petitioner’s testimony that she would do overhead lifting in violation of her doctor’s orders.

Petitioner appealed and the Appellate Division reviewed the testimony of the experts as well as the lay witnesses.  The Court noted that Dr. Alexander Vaccaro did give an opinion favorable to petitioner but also conceded that petitioner had a progressive disability.  Although petitioner at first denied having prior neck problems, she admitted that she filed a workers’ compensation claim for her neck against Macy’s in 1993 and had lumbar spondylosis since age 19.  The Court also deferred to the Judge of Compensation in finding that Dr. Charles Effron’s testimony for respondent was more credible than that of Dr. Vaccaro for petitioner in stating that there was nothing petitioner did at work that was any different that what she would do outside work.  Dr. Effron insisted that petitioner’s condition was age related.

The Appellate Court affirmed the Judge of Compensation on the dismissal of all three claim petitions as well as petitioner’s claim petition against the New Jersey Second Injury Fund.  This was a significant ruling because petitioner would certainly have been found totally disabled had she prevailed on her occupational aggravation claim.  The case shows the importance of a key provision in Section 31, which states: “Deterioration of a tissue, organ or part of the body in which the function of such tissue, organ or part of the body is diminished due to the natural aging process thereof is not compensable.”  It also shows how important it is for respondents to produce their own witnesses at trial and not just allow petitioner to constitute the only lay witness in the case.  This case can be found at Scafuri v. Sisley Cosmetics, USA, Inc., A-2065-14T3 (App. Div. June 24, 2016).

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John H. Geaney, Esq., is an Executive Committee Member and a Shareholder in Capehart Scatchard's Workers’ Compensation Group.  Mr. Geaney concentrates his practice in the representation of employers, self-insured companies, third-party administrators, and insurance carriers in workers’ compensation, the Americans with Disabilities Act and Family and Medical Leave Act. Should you have any questions or would like more information, please contact Mr. Geaney at 856.914.2063 or by e‑mail at jgeaney@capehart.com. 

Michael Cannon applied for a job with Jacobs Field Services (hereinafter JFS) as a field engineer for a Colorado mining site. The company made him a job offer conditioned on his passing a post-offer medical examination.  During the post-offer exam, Cannon revealed to the doctor that he had an inoperable rotator cuff tear and had taken Ultram (a brand name version of the opioid Tramadol).  He said he still had the prescription but was no longer taking it. In fact, he passed the drug test portion of the post-offer examination.  The doctor cleared Cannon provided that JFS offered accommodations of no driving company vehicles, no lifting, pushing, or pulling more than 10 pounds and no working with his hands above shoulder level.

Less than two hours after receiving the doctor’s report, the company’s technical operations officer at the mining project wrote that the job offer should be rescinded because a field engineer must be capable of driving and lifting.  Ladder climbing was an essential function of the job.  Further, the job site was located in the mountains with rocky terrain over several miles, so driving was essential.  This decision to revoke the job offer was not communicated immediately to Cannon.  A Human Resources Manager later contacted Cannon, expressing concerns about his ability to perform the essential functions of the job.  Cannon offered to contact the Occupational Health Department to address concerns that he was still taking Ultram (he said he was not).  He also brought a note from his doctor stating that he could climb ladders by maintaining three point contact with either arm.

Two days after the examination, Cannon submitted the doctor’s note to JFS.  But the company revoked his job offer and never discussed the doctor’s notes he submitted.  Cannon still tried to prove JFS was making a mistake by offering a video of him climbing a ladder while maintaining three point contact, using his non-injured shoulder.  When all efforts failed, he contacted the EEOC, which concluded that JFS had engaged in disability discrimination.  Cannon then sued under the ADA.

At the federal court level, the company prevailed.  The district court found that Cannon’s rotator cuff injury did not render him disabled under the ADA.  Cannon then appealed to the Fifth Circuit Court of Appeals.  The Appeals Court observed that the ADA Amendments Act made it easier for people with disabilities to obtain coverage under the ADA.  “There is ample evidence to support a conclusion that Cannon’s injury qualifies as a disability under the more relaxed standard.  Although the district court concluded otherwise, the ADA includes ‘lifting’ in its list of major life activities.”  The Court said that Cannon could prove that he was substantially limited in lifting because he was unable to lift his right arm above his shoulder and had considerable difficulty lifting, pushing, or pulling objects with his right arm.

But even if he had a substantial limitation in lifting, Cannon still had to prove that he could perform the essential functions of the job.  Cannon insisted that he did not need any reasonable accommodation at all.  He said that by using his left arm effectively, he compensates for his right arm limitations. He also said he was not taking Ultram and would therefore not be in violation of the company’s policy that “employees who are taking narcotics are not permitted to operate company vehicles.” Cannon’s doctor said that his patient was still being weaned off Ultram, while Cannon asserted he was off the drug and noted that he passed the company drug test.  He still had the prescription but was not using it.  The Court said that the jury should decide whether Cannon was or was not still taking Ultram.

As for the climbing aspect of the job, Cannon agreed with JFS that this was an essential function but insisted that the video he presented to the company showing him climbing was proof he could manage it by use of his left arm in keeping three point contact with the ladder.  Cannon’s doctor submitted a note stating that his patient could climb despite the shoulder injury.  The company argued that in the video Cannon raised his injured right arm above his shoulder in violation of his doctor’s orders. JFS argued that the ADA does not require an employer to permit an employee to perform a job function that the employee’s doctor says is forbidden.  The Court felt that there was enough evidence to go to a jury on the question of whether Cannon could perform the essential job function of climbing a ladder.  The Court was somewhat critical of the company in stating that the company could have questioned Cannon or his doctor at the time he submitted the video or asked Cannon to actually demonstrate that he could climb a ladder.

Perhaps most importantly, the Fifth Circuit Court of Appeals said that the company failed to engage in the interactive process that the ADA requires.  The Court seemed to feel that the company jumped the gun in deciding within two hours that the applicant could not perform the essential job functions without engaging in any interactive dialogue.

The case drives home a number of points for practitioners.  For workers’ compensation practitioners it is important to reflect that shoulder injuries, particularly rotator cuff tears, abound in all states.  Employers should consider that under the ADA Amendments Act, coverage can easily be found for such shoulder conditions with the expanded definition of disability. Secondly, the post-offer process is not exempt from the requirement that employers engage in an interactive dialogue with applicants who may have covered disabilities.  Employers should err on the safe side and consider that the medical condition may be covered under the ADA and then engage in the interactive dialogue.

This case may be found at Cannon v. Jacobs Field Services, 813 F.3d 586, U.S. App. LEXIS 531, (January 13, 2016).

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John H. Geaney, Esq., is an Executive Committee Member and a Shareholder in Capehart Scatchard's Workers’ Compensation Group.  Mr. Geaney concentrates his practice in the representation of employers, self-insured companies, third-party administrators, and insurance carriers in workers’ compensation, the Americans with Disabilities Act and Family and Medical Leave Act. Should you have any questions or would like more information, please contact Mr. Geaney at 856.914.2063 or by e‑mail at jgeaney@capehart.com.

AN IMPERFECT IMPAIRMENT IN PENNSYLVANIA

By Kevin L. Connors, Esquire

No, this is not a political diatribe on the politically insensitive defect who promises to make “America great” while asking us to believe that only he has the power to do so.

Instead, we are talking about the Pennsylvania Supreme Court’s most recent pronouncement on impairment ratings that became the subject of its ruling inIA Construction Corporation/Liberty Mutual v. WCA Appeal Board (Rhodes), decided on May 25, 2016.

If interested in a copy of the Decision, kindly file the appropriate request, utilizing the appropriate Bureau form.

In IA Construction Corporation, The Pennsylvania Supreme Court dealt with the validity of a workers’ compensation Judge’s decision to reject the opinion testimony of the physician performing an impairment rating examination for the employer/insurer, where no contrary evidence was ever produced, or, for that matter, adduced, by the Claimant.

The background of this case arose in the context of Section 306(a.2) of the Pennsylvania Workers’ Compensation Act, promulgated in 1996 by the Pennsylvania General Assembly to address the rising costs associated with the workers’ compensation liability scheme. Gardner v. WCAB (Genesis Health Ventures), 888 A.2d 758 (Pa. 2005).

Under Section 306(a.2) of the WCA, an employer or insurer can request an impairment rating evaluation (IRE) when a Claimant has received 104 weeks of temporary total disability benefits; the IRE is a medical examination directed toward assessing the degree of the Claimant’s impairment attributable to a compensable injury.

In that same context, “impairment” connotes an anatomical or functional abnormality or loss resulting from a compensable injury that is reasonably presumed to be permanent, clearly distinguished from the compensation concept of “disability,” which more broadly concerns the loss of earnings capacity.  See Dillon v. WCAB (Greenwich Collieries),640 A.2d 386 (Pa. 1994).

As those of us practicing in Pennsylvania know all too well, the concept of “disability” under the WCA encompasses the incapacity to work resulting in compensable wage loss, clearly distinct from the concept of permanent impairment.

In IA Construction Corporation, the Claimant was injured in a motor vehicle accident in 2005, with the Claimant’s entitlement to workers’ compensation benefits litigated under a Claim Petition.

The Claimant’s Claim Petition was then granted by the workers’ compensation Judge in 2007, with the Claimant awarded temporary total disability benefits, finding that the Claimant had sustained work-related injuries, described by the WCJ as a traumatic brain injury with organic affective changes, persistent cognitive problems, memory impairment, posttraumatic headaches, posttraumatic vertigo or impaired balance, and musculoskeletal or myofascial neck and back injuries.

A few years later, the employer/insurer filed the appropriate notice, utilizing an appropriate Bureau form, requesting that the Bureau designate a physician to conduct an impairment rating evaluation of the Claimant.

In its infinite wisdom, the Bureau designated Dr. Bud Lateef, a physician maintaining board certifications in physiatry, rehabilitation, and pain management, to conduct an IRE of the Claimant.  

Given that the IRE was requested outside the period associated with the IRE being accorded automatic conversion of the Claimant’s temporary total disability benefits to temporary partial disability benefits, a very narrow window triggered by the 104 weeks receipt of temporary total disability benefits (“TTD”). The employer  filed a Petition seeking to modify the Claimant’s worker’s compensation benefits, in reliance upon the IRE, seeking to convert the Claimant’s compensation benefits from TTD to temporary partial disability (“TPD”).

Following assignment of the petition to the workers’ compensation Judge, the employer/insurer deposed Dr. Lateef, who assigned the Claimant an impairment rating of 34%.  Testifying that he examined the Claimant and reviewed the Claimant’s medical records, Dr. Lateef confirmed three primary diagnoses, described as the traumatic brain injury, a cervical condition in the nature of a herniated disc, and a spinal condition resulting in gait dysfunction. 

Testifying that he assigned discrete impairment ratings to each of those three conditions, Dr. Lateef testified that the three conditions constituted a 34% impairment rating under the Sixth Edition of the AMA Guides to the Evaluation of Permanent Impairment (the “AMA Guides”).

Parenthetically, the constitutional argument raised in Protz v. WCAB,124 A.3d 406(Pa. Cmwlth. 2015), challenging the impairment rating examination process in that case, as it used “the most recent edition” the AMA Guides, being the Sixth Edition, as opposed to utilizing the Fourth Edition, which was the controlling AMA Edition when the impairment regulations were promulgated in 1996, was not raised inIA Construction Corporation, and was not, therefore, considered by the Pennsylvania Supreme Court in this ruling.

In IA Construction Corporation, the employer then submitted the deposition testimony of Dr. Lateef, as well as his IRE report, in response to which the Claimant did not present any evidence whatsoever, nor did the Claimant testify on his own behalf.

Denying the employer’s Modification Petition, the WCJ rejected Dr. Lateef’s testimony regarding his impairment rating opinion, expressing concern that Dr. Lateef had “inappropriately lumped” an array of discrete injuries into three categories, with the WCJ referring to the injuries that had been described by the workers’ compensation Judge in the course of granting the Claimant’s original Claim Petition.

Moreover, the WCJ, in denying the employer’s Modification Petition, was critical of Dr. Lateef for failing to adequately account for all of the injuries described in the decision under which the Claimant’s Claim Petition had been originally granted.

Additionally, the WCJ criticized Dr. Lateef’s assessment of the Claim’s cognitive issues as being unduly limited, based on Dr. Lateef only performing a cursory examination, and otherwise limiting his opinion to his review of the Claimant’s medical records. Since Dr. Lateef’s medical expertise was limited to physical medicine and pain management, and not neurology, the WCJ rejected Dr. Lateef’s opinion concerning his impairment assessment of the Claimant’s cognitive deficits. 

The employer’s Appeal of the WCJ’s decision was then denied by the Workers’ Compensation Appeal Board in a divided opinion, with the majority substantially relying upon the principle that a WCJ, as the ultimate fact finder, is accorded discretion to determine the weight to be accorded to any evidence presented.  Rhodes v. IA Construction Corporation,No. A11-1630 (WCAB, 11/5/13).

The Appeal Board’s decision did so on grounds that the IRE, at least procedurally, was conducted in accordance with the requirements to the Act, further attributing  significance to the fact that employers do not participate in the process selecting IRE physicians, as that function is left to the administrative discretion of the Bureau.

Appealed to the Commonwealth Court, the Commonwealth Court reversed the Decisions of the WCJ and Appeal Board, holding that Dr. Lateef’s IRE conclusions satisfied the WCA’s qualifications for IRE physicians, and that Dr. Lateef had followed the statutorily-described methodology for conducting the IRE.  See IA Construction Corp. v. WCAB (Rose),110 A.3d 1096 (Pa. Cmwlth. 2015).

Taking the position that the WCJ lacked the authority to reject the testimony of a physician on the basis that cognitive impairment was outside the area of his specialization, the Commonwealth Court held that the “WCJ’s opinion as to the insufficiency of an IRE cannot stand without some record support”.  Id. at 1102.

Since the Claimant had failed to adduce any evidence on his own behalf, the Commonwealth Court held that the WCJ never referenced any provisions of the AMA Guides, or any other evidence that supported her conclusions that Dr. Lateef had mischaracterized or improperly grouped the Claimant’s injury, or that Dr. Lateef had erroneously miscalculated the impairment rating assigned to the Claimant.

Reflecting that impairment rating examinations and procedures were enacted as a cost-containment scheme focusing upon “impairment”, as opposed to “disability”, the latter being the traditional core of the workers’ compensation scheme, the Pennsylvania Supreme Court, in an opinion authored by Chief Justice Saylor, noted that the enactment of impairment rating regulations and procedures was essentially experimental legislation, subject to conceptual and other difficulties that have become increasingly evident over time, with there being certain conflicts that have appeared between the legislative statute and the AMA Guides, particularly with respect to the timing of a Claimant reaching maximum medical improvement. Combine v. WCAB (Nat’l Fuel Gas Distribution Corporation), 954 A.2d 776, (Pa. Cmwlth. 2008).

Citing to the incongruities that have arisen from the impairment rating statute, Justice Saylor suggested that this is an area of law that is ripe for legislative review, so that the statute can be clarified, and improved, to enhance fairness, incorporating the many compromises and trade-offs that are inherent in a workers’ compensation liability scheme, for purposes of implementing the manifest intentions of the policy-making branch (the Bureau), subject to constitutional limits.

Noting the conflict in the WCJ’s Decision between the “credibility” and “persuasiveness” of the opinions rendered by Dr. Lateef, the Supreme Court rejected the employer’s argument that to reject the opinion of Dr. Lateef in the absence of any contrary evidence was tantamount to an evisceration of the substantial-evidence review principle, with the Supreme Court held that the substantial-evidence facet of the appellate review of an administrative agency adjudication did not simply apply to scenarios in which the prevailing party presented no evidence whatsoever,  rather, these matters must turn upon the weight attributed by the fact-finder of the evidence presented by the party bearing the burden of proof.

Since the employer in IA Construction Corporation carried the burden to establish the factual and legal basis for the modification of compensation benefits that it sought, the Supreme Court held that the WCJ was free to accept or reject the employer’s evidence, even in the absence of any contrary evidence being presented by the Claimant.

Addressing employer’s argument that the WCJ’s analysis of Dr. Lateef’s opinion was superficial, particularly in reference to Dr. Lateef’s opinions concerning the Claimant’s brain injury, the Supreme Court noted that an examination for a neurological impairment “should be based on a detailed mental status examination, often in concert with neuropsychological assessment and testing”, with the Supreme Court finding that there was very little support in Dr. Lateef’s deposition testimony, or IRE report, suggesting that Dr. Lateef had undertaken a detailed mental status examination of the Claimant.

Moreover, the Supreme Court noted that Dr. Lateef’s testimony did not elaborate on the differences in impairment attaching to the different classes of neurological impairment, failing to address what additional impact the Claimant’s impairments would have on the activities of daily living, potentially affecting the impairment rating percentage that could potentially be assigned to the Claimant’s work-related injuries.

The Court also noted that other jurisdictions allowed WCJs to assign lesser weight to an underdeveloped and out-of-specialty impairment rating that was not contradicted by opposing medical evidence, relying uponAdams v. Massanari, 55 Fed. 2Fed. F Appx. 279 (6^th Circuit 2003) (explaining that, as a general rule at least, an administrative law judge “may discredit the opinion of a physician that is outside their area of expertise” (citingTurley v. Sullivan, 939 F.2d 524 (8^th Circuit 1991))).

Ruling summarily that the Supreme Court had previously determined that a physician’s impairment rating opinion was subject to “vetting through the traditional administrative process.”, theDiehl v. WCAB, 5 A.3d 245), the Supreme Court held that the Commonwealth Court had erred in its conclusion that a workers’ compensation judge lacked the authority to reject the uncontradicted testimony of an IRE physician, reversing the Commonwealth Court’s reversal of the Decisions by the WCJ and Appeal Board, with the Supreme Court remanding the case back to the WCJ, for reinstatement of the WCJ’s original adjudication.

Justices Baer, Todd, Donohue, Doughtery, and Wecht joined in Justice Saylor’s opinion.

TakeAways

Be careful what we wish for.

Obviously, the factors that influenced the Supreme Court in IA Construction Corporation clearly distinguish the logistical gap between the injuries originally found to be work-related and compensable under the initial granting of the Claimant’s Claim Petition, as opposed to the injuries evaluated by Dr. Lateef, in the course of conducting the IRE in question.

That appears to have been a fatal flaw in Dr. Lateef’s IRE findings and conclusions by the Supreme Court.

Unknown is whether Dr. Lateef had any knowledge as to the injuries found to be compensable and work-related when the Claimant’s Claim Petition was originally granted.

However, it is clear that the Supreme Court took issue with the fact that Dr. Lateef, a board-certified physiatrist, was assigning an impairment rating to a cognitive impairment, one presumably associated with an accepted and adjudicated work injury, when Dr. Lateef lacked either expertise or qualifications in the medical specialty of neurology, more traditionally associated with the evaluation of cognitive deficits and injuries.

A very different result might have been achieved if the Bureau had assigned the Claimant’s impairment rating examination to a board-certified neurologist, presumably qualified and competent to evaluate a cognitive injury, in the context of potential impairments.

So who is ultimately responsible for matching an accepted injury with the appropriate qualifications to evaluate injury-related impairments, with that responsibility being left, at this point, to the infinite wisdom of the Bureau, oftentimes making random impairment rating physician designations.

ConnorsO’Dell LLP

Trust us, we just get it!  It is trust well spent!

We defend Employers, Self-Insureds, Insurance Carriers, and Third Party Administrators in Workers’ Compensation matters throughout  Pennsylvania.  We have over 100 years of cumulative experience defending our clients against compensation-related liabilities, with no attorney in our firm having less than ten (10) years of specialized experience, empowering our Workers’ Compensation practice group attorneys to be more than mere claim denials, enabling us to create the factual and legal leverage to expeditiously resolve claims, in the course of limiting/reducing/extinguishing our clients’ liabilities under the Pennsylvania Workers’ Compensation Act.

Every member of our Workers’ Compensation practice group is AV rated.  Our partnership with the NWCDN magnifies the lens for which our professional expertise imperiously demands that we always be dynamic and exacting advocates for our clients, navigating the frustrating and form-intensive minefield pervasive throughout Pennsylvania Workers’ Compensation practice and procedure.

An important ADA decision has come from the Court of Appeals in the Eighth Circuit inMorriss v. BNSF Railway Company, 817 F.3d 1104 (8th Cir. 2016).  The case stems from a post-offer medical examination.  Melvin Morriss applied for a machinist position and received a conditional offer of employment.  He was required to undergo a medical review because the position was safety sensitive.  He noted on the medical questionnaire that he weighed 270 pounds and stood 5’10” tall.  He was not currently a diabetic and did not have any health concerns.  He noted no limitations in daily activities.

BNSF doctors examined Morriss and noted that he weighed 281 pounds and had a body mass index of 40.9 in the first exam and 40.4 in the second exam.  Because his BMI exceeded the company’s qualification standards, the company’s medical department advised Morriss that he was not currently qualified due to significant health and safety risks related to Class 3 obesity, which entailed a BMI of 40 or greater.  BNSF then revoked the job offer, and Morriss sued alleging discrimination under the ADA.

Morriss lost in the district court, which noted that Morriss had denied suffering from any medical impairment on BNSF’s medical questionnaire.  His personal doctor said he did not suffer from any medical condition which caused his obesity.  He had no limitations at all.  The court therefore dismissed his case and Morriss appealed.

The Court of Appeals focused on whether Morriss had an impairment under the ADA.  Morriss argued that Congress stated in the ADAAA (Americans with Disabilities Act Amendments Act) that whether an impairment exists should not demand extensive analysis.  The Eighth Circuit rejected that argument and extensively analyzed the history of the definition of impairment going back to the original ADA guidance and statutory language. It considered the EEOC Interpretive Guidance on physical impairment:

It is important to distinguish between conditions that are impairments and physical, psychological, environmental, cultural, and economic characteristics that are not impairments.  The definition of the term ‘impairment’ does not include physical characteristics such as eye color, hair color, left-handedness, or height, weight, or muscle tone that are within ‘normal’ range and are not the result of a physiological disorder.  The definition, likewise, does not include characteristic predisposition to illness or disease.  Other conditions, such as pregnancy, that are not the result of a physiological disorder are also not impairments.

The Court held that plaintiff had to prove both that his weight falls outside the normal range AND that it is due to a physiological disorder.  Plaintiff challenged the Court’s interpretation by arguing that when Congress passed the ADAAA it specifically intended to construe the law in favor of broad coverage.  The Eighth Circuit answered by noting that Congress accomplished this broader coverage by adopting a far more generous definition of “substantial limitations of major life activities.”  It said,  “Notably, Congress did not express any disagreement with judicial interpretations of the term ‘physical impairment.‘”  In this way the Court overcame the argument that the ADAAA required a more expansive interpretation of obesity as an impairment.  “Thus, because the ADAAA did not alter that definition, pre-ADAAA case law holding that obesity qualifies as a physical impairment only if it results from an underlying physiological disorder or condition remains relevant and persuasive.”

The Court said “weight is merely a physical characteristic — not a physical impairment — unless it is both outside the normal range and the result of an underlying physiological disorder.” The Court said that even for morbid obesity, the same test must be met. For much the same reasons, the Court rejected plaintiff’s alternative argument that BNSF violated the ADA by regarding him as being disabled.  It said that the ADA only prohibits an employer from discriminating against an individual on the basis of a physical impairment. “But the ADA does not prohibit an employer from acting on some other basis, i.e., on its assessment that although no physical impairment currently exists, there is an unacceptable risk of a future physical impairment.”

In very clear language the Court emphasized, “The ADA does not prohibit discrimination based on a perception that a physical characteristic — as opposed to a physical impairment — may eventually lead to a physical impairment as defined under the Act.”

This case is very important to employers who do post-offer medical examinations and have similar standards for hiring in safety sensitive positions.  Employers must distinguish between physical characteristics as opposed to actual physical impairments.  Making decisions based on physical characteristics that are not now impairments is not discrimination under the ADA according to the Eighth Circuit Court of Appeals.  The key in this case was that Morriss himself said he had no physical impairment, as did his own physician.   Plaintiff was never able to show that he had a current impairment under the ADA, and the employer had a right to make decisions focused on physical characteristics that may eventually lead to physical impairments.

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John H. Geaney, Esq., is an Executive Committee Member and a Shareholder in Capehart Scatchard's Workers’ Compensation Group.  Mr. Geaney concentrates his practice in the representation of employers, self-insured companies, third-party administrators, and insurance carriers in workers’ compensation, the Americans with Disabilities Act and Family and Medical Leave Act. Should you have any questions or would like more information, please contact Mr. Geaney at 856.914.2063 or by e‑mail at jgeaney@capehart.com. 

The New Jersey Division of Workers’ Compensation has thousands of medical reimbursement claims in various stages of negotiation and litigation.  Few cases actually get tried because most medical providers do not want to come to court to defend their charges. The vast majority of cases get settled through negotiations.  One recent case, however, involved testimony by a trauma surgeon to obtain reimbursement at the 95th percentile of his charges in the matter of University Physicians Associates v. Transport Drivers CP# 2013-18665.  The case was decided on March 17, 2016.

The case arose from a serious injury to the hip of Mr. Manuel Bonilla who received a workers’ compensation award.  Dr. David Livingston, the Chief of the Trauma Division of University Physicians Associates (UPA), came to court to testify that the insurance carrier, Patriot Risk Services, unreasonably reduced his charges.  He said he performed diagnostic tests and determined that Mr. Bonilla suffered a dislocated hip, crush injury and left acetabular fracture in a 2012 work accident.  He repaired the dislocated hip under conscious sedation without surgery on an emergency basis.  He documented his care as CPT code 27250 and the rate of $9,391. He was paid $3,188.75 and claimed that Patriot Risk owed him $6,202.25.   CPT Code 27250 reads, “closed treatment of hip dislocation, traumatic without anesthesia.” He said that during 2012 he performed three procedures under this code and got paid in full by two different PIP carriers for $9,391. Dr. Livingston also charged $952 for his consult under CPT Code 99245 with modifier code 25 (meaning considerable time was expended). He was paid $500.23 and sought the balance of $451.77.

Following the closed reduction, another surgeon at UPA performed an open reduction and internal fixation to repair the acetabular fracture.  This surgeon, Dr. Adams, did not testify in the case.  He documented his care under CPT Code 27228 at a rate of $71,374 and was paid $24,234.50.  He sought the balance of $47,139.50.

The trial consisted of testimony by Dr. Livingston, Simi Bakshi, the Chief Financial Officer of UPA, and Sandra Corradi (Certified Professional Coder) for respondent.  Dr. Livingston emphasized that he was the Chief of Trauma at a Level One Trauma Hospital, the only one in the northern part of the state.  He said that the New Jersey Department of Banking and Insurance approved a modifier entitled “TS” (trauma service) exclusively for use on PIP charges, but he offered no evidence to prove this point.  He also admitted that CPT Code 25250 is reimbursed at a rate of $150.48 by Medicare.  The remainder of usual and customary rates in New Jersey range from the 50th percentile with payment of $2,376 to the 95th percentile with payment at $9,391 (the amount he contended he should have been paid).

Ms. Bakshi testifed for UPA but admitted that she is not credentialed as a professional coder.  She had no information in court regarding allowed billings by PIP, Medicare or Medicaid.  She stressed that UPA always bills at the 95th percentile of allowed amounts.  The Honorable Nilda Hernandez, Judge of Compensation, did not find her testimony to be helpful on the issues in the case.  However, Judge Hernandez did credit the testimony of Sandra Corradi as a Certified Professional Coder since 1995. Corradi said that she utilizes her certification in her job as Vice-President of bill review, responsible for operating and overseeing about 85,000 workers’ compensation claims.  She said that her job with MCMC, a vendor company that reviews workers’ compensation medical claims, requires review of the applicable codes to determine the appropriate amount of payment.  MCMC uses Fair Health Solutions for value guidance in states that do not have fee schedules (New Jersey, for example).  Fair Health Solutions provides information by geographic region based on zip codes for charges billed and paid.

Judge Hernandez noted that the New Jersey statute requires that reasonable charges must be “based upon the usual fees and charges which prevail in the same community for similar physicians’, surgeons’ and hospital services.” N.J.S.A. 34:15-15. In this case, Ms. Corradi’s company forwarded their assessment to Patriot Risk, which paid the UPA doctors at the 75th percentile.   She also noted that any claim in excess of $25,000 requires review by a nurse, who compares the CPT codes billed against the correlating documentation.  Here the charges were compared with other similar services in the Newark, N.J. zip code.

On cross examination, Ms. Corradi was asked whether her company’s agreement with Patriot Risk contained any incentives for reducing payments.  Ms. Corradi indicated that there were no such incentives.  Her company was paid $8.50 per reviewed submitted bill.

Judge Hernandez rejected the argument of UPA that the decision should turn on only those payments by other commercial carriers with Medicare and Medicaid being disregarded.  She relied on Coalition for Quality Healthcare vs. New Jersey Department of Banking and Insurance, 358 N.J. Super. 123 (App. Div. 2003) for the proposition that paid fees are a more accurate measure of value than billed fees.  “So far as this is applicable to workers’ compensation, I accept that it is appropriate to use paid fees rather than billed fees to make a determination as to the usual and prevailing fees in billing.” Judge Hernandez was persuaded by the testimony of Ms. Corradi and her expertise.  The Judge noted that UPA failed to provide expert testimony to the contrary.  She also found that there is no use of modifiers for physicians’ credentials to warrant a higher amount of payment.  She dismissed the claim with prejudice.

This case is of great importance to practitioners, employers, medical professionals, and carriers because it provides a very useful template for how to handle trials on medical reimbursement claims.  One key element in this case was the use of expert testimony.  Patriot Risk wisely produced an expert in coding, while UPA did not.  Another key aspect of this case is that the Judge of Compensation did not buy the argument that a doctor’s credentials justified an enhanced percentile or modifier.  In this case, Dr. Livingston emphasized his credentials at trial, noting that in addition to being the Director of the Trauma Center, he was a Full Professor at Rutgers School of Medicine.  He contended that these credential justified his practice of always billing at the 95% percentile.  The Judge did not accept that there was any legal standard requiring a use of modifiers based on physician credentials.  The use of a modifier is based more on additional time expended.

What this case shows is that trials on medical reimbursement claims require thought and planning.  One does not just submit bills into evidence and make a request of the judge for payment.  Detailed testimony is required.  The party with the better expert will likely prevail.  For employers the take-away should be that when large amounts are at stake, parties should retain appropriate experts.  In this case, Patriot Risk paid not a cent more after trial than it originally paid.

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John H. Geaney, Esq., is an Executive Committee Member and a Shareholder in Capehart Scatchard's Workers’ Compensation Group.  Mr. Geaney concentrates his practice in the representation of employers, self-insured companies, third-party administrators, and insurance carriers in workers’ compensation, the Americans with Disabilities Act and Family and Medical Leave Act. Should you have any questions or would like more information, please contact Mr. Geaney at 856.914.2063 or by e‑mail at jgeaney@capehart.com.