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FOLIO CLIENT NEWSLETTER BY FLAHIVE, OGDEN & LATSON

WHAT’S ON TAP FOR COMP THIS LEGISLATIVE SESSION

A PRIVILEGED ATTORNEY—CLIENT COMMUNICATION BY FLAHIVE, OGDEN & LATSON

2012—Flahive, Ogden & Latson December 2012 - VOLUME 17, NO. 12

In This Issue…

TDI-DWC Releases PBO Results for Carriers…. .p. 3

“Top Ten” Texas Appellate Rulings of 2012.....…. p. 6

The Texas Legislature returns to Austin for its biennial 140-day session beginning January 8, 2013. Most observ-ers expect fewer major changes to the workers’ comp sys-tem, particularly compared to such landmark sessions as 2005, 2001 and 1989.

Still, the makeup of the Legislature is a cause of some un-certainty – and uncertainty means you can never predict what the Legislature might find interesting or worthy of passage. This is particularly true in light of the departure from the Legislature of the primary author of House Bill 7, the landmark 2005 reform legislation. Representative Burt Solomons retired after nine terms. An acknowledged leader on workers’ compensation issues, Rep. Solomons’ departure took with him a sizeable amount of institutional knowledge regarding the workers’ compensation system.

If the entire Texas Legislature seems full of new faces this session, that’s because it almost is. The Senate will wel-come six new members, and the House will welcome 43 first-time representatives. Moreover, nearly half of the House members will be freshman or sophomore represen-tatives.

House Republicans will hold a commanding 95 - 55 ma-jority, and they are expected to dictate who will be the Speaker and who will chair at least two-thirds of House committees. The House will continue to be very Republi-can and very conservative. Current House Speaker Joe Straus is widely expected to retain his leadership position.

Meanwhile, the Texas Senate will maintain its 19-12 Republican majority. But it might seem more conserva-tive as the Texas House. Lt. Governor David Dewhurst returns for his sixth session as presiding officer follow-ing an unsuccessful run for U.S. Senate. Some observers predict that Lt. Gov. Dewhurst will pursue a more con-servative agenda in order to position himself for a more successful race in 2014.

Some committee work on workers’ comp has already taken place. On December 10, 2012, the Senate State Affairs Committee convened and considered workers’ compensation issues as outlined in an interim charge.

Workers’ Compensation Commissioner Rod Bordelon testified on issues related to the interim charges. The Commissioner described dramatic improvement in the Texas system since the passage and implementation of HB 7, legislation in the interim period, and HB 2605, the Division sunset bill, that was passed in 2011.

The Commissioner reported that the number of work related injuries and fatalities are down, system claims costs are down, medical costs have stabilized, and more employers are purchasing workers’ compensation insur-ance policies. He also reported that injured employee’s access to health care has improved and is adequate.

The State Affairs Committee has been charged with re-viewing a number of workers’ compensation items, any of which could materialize into legislation before the session ends. Specifically, the committee has been in-structed to examine the Texas Workers' Compensation system and make recommendations for changes to meet the needs of Texas employers and employees in the fol-lowing areas:

FOLIO CLIENT NEWSLETTER BY FLAHIVE, OGDEN & LATSON 2

Flahive, Ogden & Latson, a 20 lawyer firm, defends

contested workers’ compensation cases statewide

every day. The firm has represented insurance compa-nies and employers before the Texas Workers’ Compen-

sation agency for more than 50 years. For general ques-tions concerning the newsletter call: (512) 435-2234.

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FO&L OFFICE HOURS

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8:15 a.m.—4:45 p.m.

If you need to call after 4:45 p.m. please call Patsy Shel-ton at (512) 435-2234. She will be on duty until 6:00

p.m. daily.

Don’t wait until the last hour of the day for deadline

filing. Any faxes with information due must be received by 3:30 p.m. for any deadline handling for same day

delivery to the Division, and faxed according to the fax

directory listed on the last page of FOLIO. Furthermore, if you have a last minute deadline, call our office by

3:00 p.m. and speak with Sally Matthews or Patsy Shel-ton to advise that a last minute filing is necessary to

meet a deadline. We will be watching and waiting for the fax. Otherwise, last minute faxes could delay re-

ceipt. Our last daily run to the Division will be at 4:00 p.m., in order to get across town to meet their 5:00

p.m. closing time.

The dispute resolution process and benefits available from employers that do not subscribe to workers com-pensation;

The adequacy of income benefits in the workers' com-pensation system, specifically on high-wage earners receiving the maximum compensation rate;

Fatalities in the Workers' Compensation System, in-cluding the amount of death and burial benefits paid to beneficiaries and the Subsequent Injury Fund since 2000; and

The return-to-work numbers and results for injured employees in the Workers' Compensation System that are referred to the Department of Assistive and Reha-bilitative Services.

But most of the Legislature’s time and attention this session is expected to be devoted to a wide variety of non-comp issues, such as education and school finance issues, margin tax re-form, budget issues, and a hodgepodge of water, energy and social issues.

In truth, practically every subject you can imagine will be con-sidered in one piece of legislation or another. Last session leg-islators filed nearly 6,000 bills, while managing to pass 1,458 of them. It will take a determined effort to bring workers’ compensation to the top of that pile. Time will tell what the legislature does to comp in 2013.

We will follow the 2013 legislative session and will keep you advised of the developments that might affect you as they oc-cur.


TDI-DWC Releases PBO Results for Carriers

Texas workers’ compensation carriers continued to im-prove their performance in the Performance Based Oversight process as more carriers reached into the top tier and fewer carriers were classified as low perform-ers this year.

The Texas Division of Workers’ Compensation re-viewed 110 insurers in this year’s performance-based oversight review. The new “report cards” show 56 car-riers as “high performers” and 53 as “average perform-ers.” One carrier, Ullico Casualty Co. − was rated as a “poor performer”.

The DWC is required by the Legislature to review carriers’ performance at least every two years and to publish the re-sults. The reviews are intended to measure compliance with workers’ compensation laws and regulation and to help guide enforcement actions by the division. Criteria include proper and timely handling of claims and medical bills.

In December 2010, the DWC released rankings for 113 selected carriers and self-insured employers, with 40 ranking as “high performers,” 70 as “average” and three as “poor performers.” The three poor performers in 2010 were the City of McAllen, Dallas National In-surance Co. and Pharr San Juan Alamo Independent School District.

In 2009, the DWC reviewed 138 carriers, with 30 high performers, 100 average performers and eight poor per-formers. The eight were American Guarantee & Liabil-ity Insurance Co., Beaumont Independent School Dis-trict, City of Corpus Christi, City of McAllen, Dallas Area Rapid Transit, Fedex Freight East, Fort Bend In-dependent School District and XL Specialty Insurance Co.

DWC issued its first set of report cards in 2007. The assessments were mandated by the Legislature as part of the reforms initiated by House Bill 7 in 2005.

The division posted the results of this year's reviews online late Wednesday. The DWC currently is perform-ing its PBO review of workers’ compensation health

care providers (as required by the Legislature) and will pub-lish those results next year.

Insurers selected for review had 20 or more initial payments of temporary income benefit transactions between Jan. 1 and June 30, 2011.

Weighted measures used to assess the carriers were:

Timely payment of initial temporary income benefits (40% weight).

Timely processing of initial medical bills (40% weight).

Timely submission of initial payment of benefits data by electronic data interchange (10% weight).

Timely submission of medical bill processing data by EDI (10% weight).

The three performance tiers are:

High Tier: 95.00 compliance or greater.

Average Tier: 80.00 through 94.99.

Poor Tier: 79.99 or less.

High performers were:

Alief Independent School District.

American Casualty Co. of Reading, Pa.

Amerisure Insurance Co.

Amerisure Mutual Insurance Co.

Bexar County.

City of Austin.

City of Dallas

City of El Paso

City of Fort Worth.

City of Houston.

City of San Antonio.


Dallas Area Rapid Transit.

Deep East Texas Self-Insurance Fund.

East Texas Educational Ins. Association.

Federated Mutual Insurance Co.

Fedex Freight, Inc.

First Liberty Insurance Corp.

Fort Worth Independent School District.

General Motors Co.

Harris County.

Hartford Accident & Indemnity Co.

Hartford Casualty Insurance Co.

Hartford Fire Insurance Co.

Hartford Underwriters Insurance Co.

Insurance Co. of the State of Pennsylvania.

Lockheed Martin Corp.

Lumbermens Underwriting Alliance.

McAllen Independent School District.

Metropolitan Transit Authority Harris Co.

Mid-Century Insurance Co.

Mitsui Sumitomo Insurance Co. of America.

Mitsui Sumitomo Insurance USA Inc.

National Fire Insurance Co. of Hartford.

Old Glory Insurance Co.

Pharr San Juan Alamo Independent School District.

Plano Independent School District.

Public Workers’ Compensation Program.

San Antonio Independent School District.

Sentinel Insurance Co., Ltd.

Service Lloyds Insurance Co.

Southwestern Bell Telephone L.P.

State Office of Risk Management.

Tarrant County.

Texas Association of School Boards Risk Manage-ment Fund.

Texas Cotton Ginners Trust.

Texas Council Risk Management Fund.

Texas Municipal League Intergovernmental Risk Pool.

Texas Mutual Insurance Co.

Travelers Indemnity Co. of America.

Texas Association of Counties Risk Management Program.

Texas Public School Workers’ Compensation Pro-ject.

University Health System.

University of Texas System.

WC Solutions.

Ysleta Independent School District.

Zenith Insurance Co.

Average performers were:

Accident Fund Insurance Co. of America.

Ace American Insurance Co.

American Guarantee & Liability Insurance Co.

American Home Assurance Co.


American Zurich Insurance Co.

Arch Insurance Co.

Brownsville Independent School District.

California Insurance Co.

Castlepoint National Insurance Co.

Chubb Indemnity Co.

Commerce & Industry Insurance Co.

Corpus Christi Independent School District.

Dallas County Schools.

Dallas Independent School District.

Dallas National Insurance Co.

El Paso Independent School District.

Employers Assurance Co.

Employers Insurance Co. of Wausau.

Farmington Casualty Co.

Federal Insurance Co.

Great Midwest Insurance Co.

Hartford Ins Co. of the Midwest.

Houston Independent School District.

Illinois National Insurance Co.

Indemnity Insurance Co. of North America.

Liberty Insurance Corp.

Liberty Mutual Fire Insurance Co.

Liberty Mutual Insurance Co.

LM Insurance Corp.

Mastec, Inc. and Subsidiaries.

Midwest Employers Casualty Co.

National Interstate Insurance Co.

Netherlands Insurance Co.

New Hampshire Insurance Co.

Old Republic Insurance Co.

Pennsylvania Manufacturers Association.

Safety National Casualty Corp.

Sentry Insurance, A Mutual Co.

Southern Insurance Co.

Standard Fire Insurance Co.

Texas Hospital Insurance Exchange.

TPS Joint Self-Insurance Funds.

Travelers Casualty Insurance Co. of America.

Travelers Indemnity Co.

Travelers Indemnity Co. of Connecticut.

Travelers Property Casualty Co. of America.

Truck Insurance Exchange.

Twin City Fire Insurance Co.

Valley Forge Insurance Co.

Wausau Business Insurance Co.

Wausau Underwriters Insurance Co.

XL Specialty Insurance Co.

Zurich American Insurance Co.

For additional information on the PBO process, go here.


As a corollary to an article we published in the November, 2012 edition of FOLIO chronicling the “top ten” administra-tive decisions handed down by the Appeals Panel of the Texas Division of Workers’ Compensation in 2012, we now endeavor to recap the “top ten” appellate judicial rulings issued by Texas Courts of Appeals and the Texas Supreme Court pertaining to workers’ compensation law this year. While the courts have issued numerous decisions that will un-doubtedly alter the current landscape of workers’ compensation litigation in Texas, the following ten decisions are likely to have the greatest impact.

1. Texas Bd. of Chiropractic Examiners v. Texas Medical Ass'n, 375 S.W.3d 464 (Tex. App.–Austin 2012, pet. filed).

Chiropractors may not conduct needle EMG testing or manipulation under anesthesia. They are also prohibited from making diagnoses, except as regards the biomechanical condition of the spine or musculoskeletal system, consistent with the statutory scope of chiropractic. The term “diagnose” is synonymous with the phrase “analyze, examine, or evaluate” in the statutory scope of chiropractic. The court did not decide the question of whether chiropractors are permitted to en-gage in differential diagnosis because the argument was not raised in the appeal.

2. In re Mid-Century Ins. Co. of Texas, No. 01-12-00446-CV, 2012 WL 4717884 (Tex. App.–Houston. [1st Dist.] Oct. 4, 2012, orig. proceeding).

Non-network health care issues, such as medical fee disputes, are subject to the “exclusive remedies” provision of Texas Labor Code § 408.001. While the DWC’s exclusive jurisdiction expressly extends to disputes over a workers’ compensa-tion insurer’s denial of some or all of a health care provider’s bills for medical services rendered, there is a carve-out for disputes over medical fees for health care provided by certified workers’ compensation networks. Original jurisdiction over fee disputes relating to health care provided by a certified workers’ compensation network is vested in the certified network’s own complaint resolution system, which is mandated and governed by statute. However, the DWC does retain exclusive jurisdiction over fee disputes relating to health care by uncertified networks. When the DWC dismisses a con-tractual dispute, courts will presume that the DWC did so after determining the threshold question of whether or not the contract applies to the health care services at issue.

3. Manbeck v. Austin Independent School Dist., 381 S.W.3d 528 (Tex. 2012).

A claimant’s attorney is not entitled to attorney’s fees incurred after a non-suit by the carrier. Texas Labor Code § 504.002(a) makes portions of the Workers’ Compensation Act applicable to certain political subdivisions, such as school districts. The list of provisions that applies to school districts does include the chapter containing the attorney fee provi-sions, but that does not waive governmental immunity against such fees. As a result, governmental immunity extends to the issue of attorney’s fees for a school district in a workers’ compensation case, and a school district will be immune from liability for attorney fees incurred by a claimant’s attorney as the result of the political subdivision’s appeal of an agency determination. This issue sufficiently implicates subject matter jurisdiction to the extent that it should be consid-ered jurisdictional; thus, it may be raised for the first time on appeal.

4. Galindo v. Ysleta Independent School Dist., 378 S.W.3d 566 (Tex. App.–El Paso 2012, no. pet.).

DWC Rule 129.2, addressing entitlement to temporary income benefits, states that PIE shall include (but not be limited to) the value of any full days of accrued sick leave or annual leave that the employee has voluntarily elected to use after the date of injury. Where no one forces a claimant to accept sick leave and catastrophic leave benefits while

THE TEXAS COURT OF APPEALS & THE TEXAS SUPREME COURT’S “TOP TEN” APPELLATE JUDICIAL RULINGS OF 2012


temporary income benefits are being denied, and the election is purely an economic one, it cannot be said that there is an issue of material fact that the use of sick leave benefits was not voluntary. Under such circumstances, summary judgment is proper on the issue of voluntariness, and the benefits accepted constitute PIE so long as they were “accrued.” This term is not defined in the statute; however, the court found that sick leave and catastrophic leave benefits are “accrued” when the employee donated to the sick leave bank and catastrophic leave bank by virtue of his employment. Under such circumstances, the accepted sick leave and catastrophic leave benefits constitute post-injury earnings (PIE).

5. Texas Mut. Ins. Co. v. Jerrols, No. 14-11-00131-CV (Tex. App.–Houston [14th Dist.] 2012, no pet. h.).

To be compensable, an injury must arise out of and in the course and scope of employment. The term “course and scope of employment” is statutorily-defined as including an activity of any kind or character that has to do with and originates in the work, business, trade, or profession of the employer and that is performed by an employee while engaged in or about the furtherance of the affairs or business of the employer.

The term specifically excludes transportation to and from the place of employment, unless the transportation is furnished as a part of the contract of employment or is paid for by the employer, the means of the transportation are under the con-trol of the employer, or the employee is directed in the employee’s employment to proceed from one place to another place.

The term also excludes travel by the employee in the furtherance of the affairs or business of the employer if the travel is also in furtherance of personal or private affairs of the employee, unless the travel to the place of occurrence of the injury would have been made even had there been no personal or private affairs of the employee to be furthered by the travel and the travel would not have been made had there been no affairs or business of the employer to be furthered by the travel.

The court emphasized in this case that “origination” and “furtherance” are separate and distinct components, both of which must be independently satisfied to bring an activity within the “course and scope of employment.” Discussion of work-related topics at the time of injury, even if during a lunch break, satisfies the furtherance requirement. Origination based on travel in connection with a claimants’ lunch break is established when the claimant’s presence in an employer-owned truck, driven by an employee at the moment of impact, stemmed from the employer-imposed requirements that the employees stay together as a “team” to remain “on task” given the time constraints of their lunch break and ride to-gether in an employer-owned vehicle driven by an employee if they ate lunch at a location away from the job site during the work day. The claimants were subjected to risks in connection with lunch-related travel that (1) were inherent in their employment; (2) are not shared by society as a whole; and (3) are thus properly allocated to the employer and its insur-ance carrier.

However, even when both the origination and furtherance requirements are satisfied, subsections (A) and (B) of section 401.001(12) nonetheless exclude two distinct circumstances from the “course and scope of employment.” The “coming and going” rule embodied in subsection (A) specifically applies to travel between home and work; this subsection and its exceptions do not apply to lunchtime injuries. The “continuous coverage” doctrine is not a component of the “coming and going” rule; rather, it is a component of the “origination” element. The “dual purpose” rule embodied in subsection (B) applies to the distinct situation in which the employee is traveling between work and a place other than home. Lunchtime injuries are only compensable if the claimant establishes both of the exceptions to the dual purpose rule: first, that the travel “would have been made even had there been no personal or private affairs of the employee to be furthered by the travel” and second, that the travel “would not have been made had there been no affairs or business of the em-ployer to be furthered by the travel.”


6. American Zurich Ins. Co. v. Samudio, 370 S.W.3d 363 (Tex. 2012).

Texas Labor Code § 410.306(c) requires that the court or jury adopt of one of the impairment ratings established in ac-cordance with Subchapter G, Chapter 408. A valid certification of an impairment rating requires an examination, pursu-ant to § 408.123. If a rating does not comport with the AMA Guides, as required by § 408.124, it is not consistent with Subchapter G and therefore cannot be adopted. Ratings not in compliance with § 408.124(b) are invalid. Whether the proffered rating was made in accordance with the statutory requirements is a purely legal question. A trial court must remand to the DWC for further proceedings when it determines that the DWC misapplied the law in resolving a benefit dispute.

The absence of a valid impairment rating that had been submitted to the DWC does not deprive a reviewing court of sub-ject matter jurisdiction. Subject matter jurisdiction speaks to the power of courts to decide a particular type of contro-versy, not to the evidence that may be considered or the scope of the remedy that can be afforded. The Workers' Com-pensation Act permits a court to remand to the DWC if it decides that the worker has no valid impairment rating.

7. In re XL Specialty Ins. Co., 373 S.W.3d 46 (Tex. 2012).

Texas law assumes that carriers and employers will converse about workers’ compensation claims; however, there is no insurer-insured privilege. Because communications between the insurer’s attorney and the insured that are designed to be confidential do not fall within the attorney-client privilege set out in Texas Rule of Evidence 503, they are not privileged and thus subject to discovery.

The allied-litigant privilege embodied in Texas Rule of Evidence 503(b)(1)(C) does not apply to this type of communi-cation. That privilege protects communications made by a client or his lawyer to another party’s lawyer, but not to the other party itself. Thus, communications made by the carrier’s attorney directly to the employer, as opposed to the em-ployer’s counsel, are not protected under the allied litigant privilege, even though they share a common interest in the outcome of the litigation.

The joint-client privilege, which applies when the same attorney simultaneously represents two or more clients on the same matter, is also inapplicable when the carrier’s attorney represents only the carrier and not the employer.

The joint-defense doctrine also does not apply because this situation does not involve communication among multiple parties to a particular lawsuit for the purpose of forming a joint defense strategy, as the employer is not a party in the litigation.

8. Texas Mut. Ins. Co. v. Ruttiger, 381 S.W.3d 430 (Tex. 2012).

There is no cause of action for the common-law breach of the duty of good faith and fair dealing for “new law” worker’s compensation claims, as a “bad faith” cause of action would be inconsistent with the structure and detailed processes of the current workers' compensation system in Texas. There are also no causes of action under the Insurance Code or the DPTA for Unfair Settlement Practices or for failure to adopt and implement reasonable standards for prompt investiga-tion of claims. A carrier can be subject to a cause of action for misrepresentation of its insurance policy; however, a de-nial of a claim on the basis that there was no injury on the job or that the claim is not factually within the policy terms is not a misrepresentation of the insurance policy.

Previously, the Court had held an employee should be allowed a cause of action for breach of the common law duty of good faith and fair dealing outside the worker’s compensation system. However, that was under the “old law.” The “new law” embodied in the 1989 Workers’ Compensation Act provides much more meaningful procedures at the administrative level and that there are detailed procedures and penalties for the failure of parties to comply. Specifically, the Act “prescribes detailed, WCD-supervised, time-compressed processes for carriers to handle claims and for dispute resolution.” The 1989 Legislature addressed the deficiencies that gave rise to the cause of action of the breach of the duty


of good faith and fair dealing and now “Texas should join the majority of states that do not allow Aranda-type suits [for breach of the common law duty of good faith and fair dealing] in the workers’ compensation setting.”

9. State Office of Risk Management v. Joiner, 363 S.W.3d 242 (Tex. App.–Texarkana 2012, pet. filed).

DWC Rule 130(c)(3) provides that the assignment of an impairment rating for the current compensable injury shall be based on the injured employee’s condition as of the MMI date considering the medical record and the certifying examination. However, a report of medical evaluation (DWC-69) that lists an incorrect, retrospective date of MMI is not invalid and thus may be adopted, even when the certification report fails to reflect the stipulated date of MMI. The rule does not state the consequence of noncompliance; as such, a technical failure to comply with Rule 130.1(c)(3) does not necessitate a determination that the report cannot be considered as evidence of the impairment rating as of the actual date of MMI. The purpose of the rule is to ensure that the impairment rating does not take into account any changes in condi-tion occurring after date of MMI; it is not to preclude adoption of an IR that is reflective of the condition as of the date of MMI, but which is not specifically certified as of that date. To interpret the rule as to impose complete omission of the report is erroneous. It is essential, only, that MMI be reached before an IR is assigned. Other failures of compliance (such as a violation of subsection (c)(4)) are explicitly stated to result in the invalidation of the report.

The term “issue” in the context of the Workers’ Compensation Act is used to refer to disputed matters related to the underlying workers’ compensation claim, as opposed to the broad issue certified by the benefit review officer; thus, an argument not made by a party before the agency may not be raised on appeal of an agency decision, even when the party making the argument prevailed at the agency level.

10. Port Elevator-Brownsville v. Casados, 358 S.W.3d 238 (Tex. 2012).

An employee may have more than one employer. An employee employed by co-employers (a temporary staffing company and an employer for whom the employee currently works) may seek to pursue workers’ compensation benefits from either or both employer’s insurance companies. The Worker’s Compensation Act (§§ 406.004, 401.011(18), 401.012(a), 406.031(a), and 406.005(c)) implicitly incorporates a rule against split workforces; thus it requires employ-ers to elect workers’ compensation coverage for all employees, with limited statutory and common-law exceptions. However, an employer that operates more than one distinct kind of business may elect coverage for only one. Failure of an employer to pay premiums for a particular classification of employee is an issue between the employer and the carrier and does not affect the employee’s coverage.

Where it is established that an employer subscribed to workers’ compensation insurance coverage and the claim-ant was indeed an employee, workers’ compensation is the exclusive remedy for deceased employee’s beneficiaries. Thus, where an employee has more than one employer, each employer that has workers’ compensation insurance is enti-tled to the exclusive remedy as a bar to claims. A claim by a deceased employee’s beneficiaries based on a theory of or-dinary negligence will be barred; they could, however, pursue a cause of action against the employer based on an inten-tional act or omission or gross negligence.

While these ten decisions embody some of the most significant developments in workers’ compensation law of the last year, they represent only a fraction of the changes that have been established by appellate courts in Texas. Our firm continues to monitor developments in the law on an ongoing basis and inform you, our valued clients, of them so that we may help your company operate as efficiently as possible and achieve optimal outcomes, in litigation and other-wise. Thank you for allowing us to serve you in 2012. We look forward to working with you in 2013 and beyond.


OIEC RELEASES ITS LEGISLATIVE WISH LIST

The Office of Injured Employee Counsel has offered legislative recommendations to five areas of the Texas workers’ compensation system. OIEC advised the Gov-ernor’s office, and top legislative leaders of its requests in a report dated December 20, 2012.

OIEC’s legislative recommendations for the 83rd Texas Legislative Session relate to the following topics:

1. Medical Necessity Disputes at Judicial Review;

2. Waiver of Compensability for Extent of Injury;

3. Dispute of First Certification of Maximum Medi-cal Improvement and Impairment Rating;

4. Supplemental Income Benefits: Range of Motion; and

5. Consistency in Venue for Benefit Disputes.

Medical Necessity Disputes at Judicial Review: OIEC proposes that the legislature enact legislation providing that the insurance carrier is liable for attorney’s fees incurred by the injured employee when an injured em-ployee prevails in a medical necessity case on judicial review. The adoption of a program covering the cost of reasonable attorney’s fees in such cases would apply the fee-shifting provisions in TEXAS LAB. CODE ANN. § 408.221(c) to cases regarding medical necessity dis-putes.

Waiver of Compensability for Extent of Injury: OIEC proposes that the legislature amend the statute to pro-vide that an insurance carrier must dispute the compen-sability of an injury to a part of the body within 60 days of receiving written notification that the injury extends to that body part. It contends that such notification should be in written form and must specifically identify the body part in question.

The Texas Supreme Court rejected waiver of extent in State Office of Risk Management v. Lawton, 295 S.W.3d 646, (Tex. 2009). The Supreme Court noted “Texas Labor Code §409.021 is intended to apply to the compensability of the injury itself or the carrier’s liability for the claim as a whole, not individual aspects

of the claim…[A] dispute involving extent of injury is a dis-pute over the amount or type of benefits, specifically, medical benefits, to which the employee is entitled (i.e. what body areas/systems, injuries, conditions, or symptoms for which the employee is entitled to treatment); it is not a denial of the employee’s entitlement to benefits in general.”

Moreover, Texas Administrative Code Section 124.3(e) states: “Texas Labor Code, §409.021 and Subsection (a) of this section do not apply to disputes of extent of injury. If a carrier receives a medical bill that involves treatment(s) or service(s) that the carrier believes is not related to the com-pensable injury, the carrier shall file a notice of dispute of extent of injury (notice of dispute)…”

The OIEC proposal would reverse the ruling in Lawton, and reject Division Rule 124.3. It would require carriers and self-insured employers to pay benefits they do not owe, and which are unrelated to the compensable injury because of a filing error.

Dispute of First MMI and IR Certification: OIEC proposes that the legislature amend Labor Code Section 408.123(e) “to prevent an injured employee from being required to prema-turely enter the dispute resolution system in order to avoid finality of the first certification of maximum medical im-provement or impairment rating.” A party’s written notice to contest maximum medical improvement and impairment rat-ings should suspend the 90-day statutory time frame without constituting a request for a benefit review conference.

OIEC contends that the change would provide an injured worker with additional time to obtain the evidence required to pursue a dispute. However, in January 2011, the Division rejected an OIEC-sponsored rule petition, which would have achieved the same result. The Division explained that the pro-posed rule change, in effect, would allow for a unilateral waiver of dispute resolution under the 90-day rule for an in-definite period by allowing the party to file a notice of dis-pute with TDI-DWC without requiring the disputing party to request formal resolution of the dispute by TDI-DWC. Under the OIEC proposal, cases could never close because a party could sit on its responsibility to obtain an alternative certifi-cation and reopen an impairment rating even years down the road.

Supplemental Income Benefits (ROM): OIEC proposes that the legislature amend enact legislation providing that the range-of-motion model incorporated into the Fourth Edition


of the AMA Guides be used to determine the impair-ment rating of the lumbar spine, or in the alternative, that the criteria for supplemental income benefits be lowered to 10 percent impairment.

Before the adoption of the Fourth Edition of the AMA Guides, impairment ratings were determined using the range of motion method. Ratings that were calculated under the range of motion model were virtually impos-sible to verify because of the subject nature of the cal-culation methodology. The agency rejected the range of motion model, and its attendant uncertainties when it adopted the Fourth Edition of the AMA Guides. That edition utilizes a more reliable methodology for assign-ing impairment ratings – the injury model.

In 2003, the Texas Workers’ Compensation Commis-sion issued Advisories 2003-10 and 2003-10B, which made it easier to obtain a 20 percent impairment rating under the injury model to the Fourth Edition of the AMA Guides. However, the Third Court of Appeals determined that the issuance of the advisories was be-yond the agency’s authority. Texas Dep’t. of Ins. v. Lumbermens Mutual Casualty Co., 212 S.W.3d 870 (Tex. App.-Austin, 2006, pet. denied).

The OIEC proposal would effectively reverse the Divi-sion’s policy decision to adopt the injury model, as well as the Court of Appeals’ ruling in the Lumbermens case. For several reasons, this would be bad policy. Adoption of the range of motion model would represent a step back in time to a system of uncertainty and gamesmanship. It would increase the number of dis-putes, which increases the costs to every system stake-holder, including injured workers. Lowering the SIBs threshold would discourage, rather than encourage, re-turn to work efforts. The Texas system has seen an in-crease in employee return-to-work statistics after the agency adopted the injury model, and the court of ap-peals rejected the Advisories. The OIEC proposal is regressive.

Venue for Benefit Disputes: OIEC proposes that the legislature implement the recommendation of the Sun-set Advisory Commission Staff Report of 2010 by amending Chapter 413 of the Labor Code to provide a party with the same venue to appeal both an adminis-trative medical dispute decision and indemnity dispute

decision. Specifically, OIEC recommends that appeals of medical necessity and non-network medical fee disputes should be filed and held in the county where the employee resided at the time of injury or at the time disability associ-ated with a work-related illness began. Parties to a dispute would also be authorized to file district court appeals in a mu-tually agreed-upon county. Appeals misfiled in the incorrect county would follow the resolution process established in statute for indemnity dispute district court appeals. This rec-ommendation would only apply to appeals of agency deci-sions regarding medical necessity and fee disputes.

Judicial review of indemnity disputes is currently heard in the county in which the injured employee resided at the time of injury, or if they have moved, in the county of current resi-dence. On the other hand, judicial review of medical disputes is currently heard in Travis County, where the Division’s cen-tral office is located. In 2007, the Sunset Advisory Commis-sion rejected its staff’s recommendation that venue for each type of benefit disputes should be the same. The Advisory Commission noted that the standard for judicial review for medical disputes is based on the substantial evidence rule, which is significantly different from the standard for judicial review in indemnity cases. In fact, a case cannot even be tried together if both kinds of disputes were filed in Travis County. Indemnity disputes are tried to a jury, while medical disputes cannot be presented to a jury. Moreover, because an appeal from most state agency decisions is governed by the substan-tial evidence standard of review, venue in such cases is over-whelmingly located in Travis County. Travis County courts are intimately familiar with the sizeable body of case law governing the substantial evidence rule. The Sunset Advisory Commission rejected its staff’s approach based upon these policy considerations.


Rod Bordelon

Texas Commisioner of Workers’ Compensation

THERE IS NO DISPUTING THE GROWING CON-CERN over the use of prescription drugs, particularly opioids. Abuse and misuse of prescription drugs, in-cluding opioids, is a serious issue in health care includ-ing the Texas workers’ compensation system. I’d like to take this opportunity to remind workers’ compensation system participants of our shared respon-sibilities concerning the use of prescription drugs and about the tools that the TDI-DWC has made available to assist system participants in this area. Our goal is to promote prompt, high-quality health care for injured employees while ensuring effective cost control. The TDI-DWC has adopted and implemented several rules that provide the tools necessary for system partici-pants to monitor prescription drug utilization and curb unnecessary medical care. We have adopted evidence-based treatment and return-to-work guidelines that pro-vide guidance to system participants about recom-mended treatment protocols and expected return-to-work outcomes for specific types of injuries. We also have adopted rules requiring preauthorization for ser-vices outside of these guidelines. In addition, the TDI-DWC has adopted a new closed pharmacy formulary which identifies specific drugs that require preauthori-zation from the insurance carrier before they can be dispensed. New medical data reporting requirements for insurance carriers will allow the TDI-DWC to more effectively monitor prescription patterns for doctors and evaluate the effectiveness of new rules on medical costs and quality of care out-comes. Finally, monitor-ing of doctors who prescribe opioids has been added as a required review category for the enforcement-based CY 2012 Medical Quality Review Audit Plan. We have begun to see the positive impact of these ef-forts through reduced prescription drug utilization and costs for new claims. The TDI-DWC will continue to monitor the transition of legacy claims (i.e. claims with dates of injury prior to September 1, 2011) to the closed pharmacy formu-lary on September 1, 2013. Research findings by the

Workers’ Compensation Research and Evaluation Group in-dicate that these legacy claims account for a disproportionate share of prescription drug utilization and costs. As a result, our rules require that insurance carriers identify these claims as quickly as possible and begin the dialog with prescribing doctors about the need to either continue the use of drugs ex-cluded from the closed pharmacy formulary for these legacy claims or the need to transfer and/or wean these injured em-ployees off of excluded drugs. For injured employees who have been taking these drugs for many years, this presents serious health concerns that can only be effectively managed if both insurance carriers and health care providers have open communication and focus on the injured employee’s health and safety first.

These efforts alone cannot resolve the problems associated with prescription drug abuse and misuse in the Texas work-ers’ compensation system. Prescribing doctors are reminded of their responsibility to pre-scribe drugs in accordance with the appropriate standard of care and the applicable treatment guidelines. Insurance carriers are reminded of the tools they have through the closed pharmacy formulary rules and through appropriate utilization review methods to address overutilization and inappropriate use of prescription drugs, including opioids.

We at the TDI-DWC will continue to discuss with all system participants ways to improve compliance with current statutes and rules. Working together we can ensure a smooth transi-tion of legacy claims to the closed pharmacy formulary in 2013 and promote high quality and cost effective health care for all injured employees in Texas.

OPIOIDS AND THE TEXAS WORKERS’ COMPENSATION

SYSTEM


The Texas Commissioner of Workers’ Compensation recently advised the Governor and Lieutenant Governor that the Texas system is experiencing injury and claim frequency decreases. In a recently released Biennial Report to the 83rd Legislature, Commissioner of Work-ers’ Compensation Rod Bordelon described the agency’s findings regarding the Texas system.

The Texas workers’ compensation system continues to experience marked reductions in both the non-fatal oc-cupational injury and illness rate and the overall num-ber of reportable claims filed with TDI-DWC. Since the passage of HB 7 in 2005, the nonfatal occupational injury illness rate in Texas decreased 25 percent from 3.6 to 2.7 injuries per 100 full-time employees. Work-place injury and illness rates vary widely by industry. However, the incidence rates for industries such as ag-riculture, forestry, fishing and hunting, construction, transportation and warehousing, retail trade, manufac-turing, and leisure and hospitality have experienced significant declines since 2005 (between 10 percent and 33 percent decline for each industry sector listed), while industries such as utilities, financial activities and educational services have experienced increased injury rates. The industry sectors with the highest rates in-clude: transportation and warehousing (4.5 injuries/illnesses per 100 full-time employees), agriculture, for-estry, fishing and hunting (4.1 injuries/illnesses per 100 full-time employees), utilities (4.1), retail trade (3.6), health care and social assistance (3.5), education and health services (3.4), and manufacturing (3.2). Com-pared with the rest of the nation, the injury rate in Texas has been consistently below the national average.

In addition to the reduction in the non-fatal occupa-tional injury and illness rate in Texas, the number of fatal occupational injuries in Texas fluctuated from 2005 to 2009 and has since declined to the lowest lev-els Texas has seen since 2002. Texas recorded a six-percent decrease in work-related fatalities in 2011, the second consecutive year of decreases. Transportation

incidents continue to be the leading cause of work-related fatalities in Texas (168 in 2011 - a 14 percent decline from 2010). Following transportation incidents, violence and other injuries by persons or animals was the second highest cause of fatalities (70 fatalities in 2009, including 42 fatalities in-volving workplace homicides) and falls was the third highest cause (67 fatalities – a 34 percent increase from 2010). The vast majority (93 percent) of fatal work-related injuries in-volved private sector employees, with the service producing industries representing more than half of these fatalities. White, non-Hispanic employees experienced fewer fatalities in 2011 than in 2010 (217 incidents in 2011 compared to 257 incidents in 2010); however, the number of fatalities involv-ing Black, non-Hispanic and Hispanic or Latino employees increased (205 incidents in 2011 compared to 191 incidents in 2010).

Similar to the results seen in non-fatal occupational injury and illness rates, the number of workers’ compensation claims actually reported to TDI-DWC has declined steadily since 2001; however, these declines have begun to slow down in recent years. The reasons for those reported declines, both nationally and in Texas, stem from a variety of factors, in-cluding increased safety awareness among employers and employees, enhanced health and safety outreach and monitor-ing efforts at the federal and state level, improvements in technology, globalization, increased use of independent con-tractors, and the possibility of under-reporting of workplace injuries and illnesses. At the national level, states have begun to see increases in claim frequency as a result of the eco-nomic recovery. However, additional monitoring is needed to determine if claim frequency in Texas has finally begun to plateau or whether increases in the number of employees in Texas, even with declining injury rates, will result in in-creased claim frequency in the future.

INJURY RATES AND CLAIM FREQUENCY CONTINUE TO

DECREASE


All email addresses of Texas Department of Insurance, Division of Workers' Compensation staff and officers, as well as ombudsmen and staff of the O.I.E.C., have changed, effective of Monday, December 10, 2012. The addresses changed from the "@tdi.state.tx.us" or "@oiec.state.tx.us" to

[email protected] or [email protected].

The old email addresses will work through the legisla-tive session, but the new addresses took effect on Mon-day December 10, 2012. We have been advised to make the switch as soon as possible.

IMPORTANT INFORMATION ABOUT TDI DWC AND OIEC

EMAIL ADDRESSES

LOCATION CHANGE FOR HOUSTON WEST DIVISION

FIELD OFFICE

The Texas Department of Insurance, Division of Workers’ Compensation (TDI-DWC) Houston West Office will open at a new location at 8:00AM on Wednesday, January

30, 2013.

All proceedings, including benefit review conferences and contested case hearings, and appointments with the Office of Injured Employee Counsel (OIEC) scheduled on or after January 30, 2013, will be held at the new location.

The new address is 350 North Sam Houston Parkway East, Suite 110, Houston, Texas 77060-3318. The telephone num-ber for the Houston West Field Office will remain 281-260-3035, and the fax number will remain 281-272-1089.

The current location will continue to operate until noon on Friday, January 25, 2013. It will remain closed from January 28-29, 2013.

The Houston West Office serves participants in the workers’ compensation system in Montgomery and Waller counties, as well as in parts of Harris County. TDI MILEAGE REIMBURSEMENT

RATE INCREASES .5 CENTS

Please note that the standardized reimbursement rate for automobile mileage has increased by 0.5 cents from $0.56/mile to $.056.5/mile.

Please feel free to contact Bobby Stokes or Steve Tipton with any questions pertaining to this recent change.

mailto:@tdi.state.tx.us

mailto:@oiec.state.tx.us

mailto:[email protected]

mailto:[email protected].


TDI TO ADDRESS INSURANCE FRAUD AT ANNUAL CONFERENCE, FEBRUARY 11–12, 2013 IN AUSTIN, TEXAS

AUSTIN – New insurance fraud investigation techniques, changes in fraud laws and an update on various fraud schemes will be offered at the 15th Annual Texas Department of Insurance Fraud Conference on February 11-12, 2013 in Austin. Insurance industry special investigative units, attorneys, legal staff, and law enforcement officers are encouraged to at-tend to network and learn about insurance fraud. The conference also will offer the opportunity to meet TDI’s newly hired Associate Commissioner of the Fraud Unit, Neftali Carrasquillo. Carrasquillo brings extensive experience as an investigator of fraud, waste and abuse in local government to the TDI Fraud Unit. He will begin work on January 7. He most recently worked as inspector general for the City of Albuquerque. In that position, he conducted and led investigations to detect and prevent fraud, waste, and abuse in city government. He also proposed ways to increase the city's legal, fiscal and ethical accountability to its taxpayers. Prior to joining the City of Albuquerque, Carrasquillo had a distinguished 25-year career with the U.S. Postal Inspection Service (USPIS), in-cluding 17 years managing inspection teams in Denver and Los Angeles. While with USPIS, he conducted and coordi-nated countless fraud, intelligence and security operations. He holds professional designations as a Certified Fraud Examiner, Certified Inspector General, Certified Compliance and Ethics Professional, Certified Forensic Interviewer, and Certified Protection Professional. He holds a bachelor of busi-ness administration degree from Baruch College of the City University of New York, and master's degrees in public ad-ministration and criminal justice from the University of Colorado at Denver. Registration for the TDI Fraud Conference is available online at: http://www.cvent.com/d/5cqxvp.

http://www.cvent.com/d/5cqxvp.


TDI-DWC HOSTS EDUCATIONAL SESSIONS ON NEW POST-DESIGNATED DOCTOR EXAMINATION RULES

AUSTIN, TX — The Texas Department of Insurance, Division of Workers’ Compensation (TDI-DWC) is hosting edu-cational sessions entitled New Rules Governing Examination by a Treating Doctor after a Designated Doctor Examina-tion at its field offices around the state in January and February 2013. The educational sessions are for all Texas work-ers’ compensation participants, including: injured employees, health care providers, designated doctors, medical office staff, insurance carriers, claim adjusters and attorneys.

The free sessions will provide information about the new TDI-DWC rules that provide guidelines for examinations by a treating doctor or referral doctor after a designated doctor examination to address issues other than certification of maxi-mum medical improvement and the evaluation of permanent impairment. 28 Texas Administrative Code §126.17 is ef-fective January 6, 2013.

For more details on the following educational sessions, visit the TDI-DWC Events and Training Calendar on the TDI website at www.tdi.texas.gov/wc/events/index.html. Sessions will be held in the following cities on the following dates:

Abilene: February 12, 2013

Amarillo: February 21, 2013

Austin: February 12, 2013

Beaumont: February 21, 2013

Corpus Christi: February 1, 2013

Dallas: February 13, 2013

Denton: February 22, 2013

El Paso: February 21, 2013

Fort Worth: February 21, 2013

Houston East: February 5, 2013

Houston West: February 12, 2013

Laredo: February 6, 2013

Lubbock: January 31, 2013

Lufkin: February 22, 2013

Midland: February 21, 2013

San Angelo: February 15, 2013

San Antonio: January 30, 2013

Tyler: February 21, 2013

Waco: February 27, 2013

Weslaco: January 30, 2013

http://www.tdi.texas.gov/wc/events/index.html.


Under Texas Labor Code §§ 408.161 and 408.082, LIBs begin to accrue and are payable retroactively from the date of disability. However, effective January 9, 2008, the initiation of LIBs was interpreted based on the Texas Court of Ap-peals’ ruling in Mid-Century Insurance Company v. Texas Workers’ Compensation Commission, 187 S.W.3d 754 (Tex. App.-Austin 2006, no pet.), which held that LIBs are payable “for” those seven enumerated conditions effective on the date that the employee suffers from one of the conditions specified in §408.161. Section 408.161 does not permit pay-ment of LIBs prior to that date.

Facts: Claimant was a cadet in the “Academy,” who sustained a head injury while participating in boxing drills and was knocked unconscious and hospitalized for 2 ½ weeks. The self-insured accepted “a compensable head/brain injury.” Claimant attempted to return to work and went to college between 2006 and 2011. He began to deteriorate in 2011. Claimant then sought entitlement to LIBs, and at a CCH on the issue of entitlement to LIBs, claimant offered medical records that showed claimant had “suffered a traumatic brain injury with hemorrhage.” The claimant was unable to work because of seizures, and stress leading to violent outbursts. Claimant also had medical evidence from a psychologist that showed the claimant to have cognitive deficits from a traumatic brain injury. Claimant also offered into evidence medi-cal report from Dr. A, which showed that the claimant had developed schizophrenia, hallucinations, seizure disorder and bipolar disorder. In May 2011, Dr. A opined that the claimant’s action over the past 6-12 months qualified him for LIBs under the “physically traumatic injury to the brain” portion of the LIBs code.

Dr. L, the treating psychiatrist, in May 26, 2011, opined the claimant “has not maintained sustained improvement or re-mission despite over 6 years of treatment by multiple specialists.” Dr. L concluded that the claimant “is currently suffer-ing from mania, episodic hallucinations, and is unable to drive because of recurrent seizures.” Based on the evidence, the hearing officer found that the brain injury was irreversible and rendered the claimant “permanently unemployable and significantly affects the non-vocational quality of his life by eliminating his ability to engage in a range of usual cognitive processes.” The Hearing Officer also found that claimant was entitled to LIBs beginning the day after the in-jury, through the present based on a physically traumatic injury to the brain resulting in incurable insanity or imbecility. The self-insured employer appealed, contending that the medical evidence was insufficient to meet the standard of in-curable insanity or imbecility and that there is no evidence that the claimant has been incurably insane (or suffered from imbecility) since May 2004, the date of the injury.

Holding: Affirmed in part and reversed and remanded in part. The hearing officer’s determination that the claimant is entitled to LIBs based on a physically traumatic injury to the brain resulting in incurable insanity or imbecility is sup-ported by sufficient evidence and is affirmed. In so doing, the Appeals Panel noted that this case was one of first impres-sion in defining incurable insanity or imbecility. Before September 1, 1997, under Labor Code §408.161(a)(6), LIBs are payable for “an injury to the skull resulting in incurable insanity or imbecility.” For compensable injuries occurring on or after September 1, 1997, the legislature changed the definition to provide for LIBs in the case of “a physically trau-matic injury to the brain resulting in incurable insanity or imbecility.” The Appeals Panel noted that most of the Ap-peals Panel decisions in the past discussing terms of “incurable insanity or imbecility” focused on whether an injury to the skull occurred or whether such an injury caused the claimant’s mental deficits based on the language of the 1989 Act prior to September 1, 1997.

Texas Division of Workers’ Compensation

Appeal No. 121131-s


The hearing officer in his Background Information cited Labor Code §408.161(a)(6) and noted that the same language of “incurable insanity or imbecility” occurs in the workers’ compensation acts of other states. The hearing officer further noted that the Appeals Panel in several cases has used a definition of “incurable insanity or imbecility” using Black’s Law Dictionary and Dorland’s Illustrated Medical Dictionary 105 (28th ed. 1994). Appeals Panel Decision (APD) 961340 decided August 21, 1996, noted:

BLACK’S LAW DICTIONARY 749 (6th ed. 1990) refers the reader to the definition of insanity for a definition of imbecility; that DORLAND’S, supra, at 820, defines imbecility as the condition of being an imbecile; moderate or severe mental retardation; and that WEBSTER’S NINTH NEW COLLE-GIATE DICTIONARY (1991) defines imbecility as the quality or state of being imbecile or an imbe-cile, and that it 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, in the Background Information, goes on to comment:

Those definitions imply more of a congenital and generic condition and not one caused by an industrial accident. The Appeals Panel decisions have not discussed the terms “incurable insanity or imbecility” beyond the above definitions, and have not discussed them in any recent decisions. The majority of the decisions focus on whether an injury to the skull occurred, or whether such an injury caused the claim-ant’s deficits, based on the language of the [1989] Act prior to September 1, 1997.

The hearing officer, in this case, cites National Union Fire Insurance Company v. Burnett, 968 S.W.2d 950 (Tex. App.-Texarkana 1998 no pet.), a case where the appellate court held that severe depression without evidence of psychosis (id at 956) does not fall within the definition of “incurable insanity.” Nonetheless, the Burnett case has some instructive language on the definition of incurable insanity or imbecility. The Burnett court cited a Virginia court (Barnett v. D. L. Bromwell, Inc., 6 Va. App. 30, 366 S.E.2d 271 (1988)) that “applied a nontechnical meaning of the term ‘imbecility’ and determined that it means “an irreversible brain injury which renders the employee permanently unemployable and so affects the non-vocational quality of his life by eliminating his ability to engage in a range of usual cognitive proc-esses.

Regarding the date of eligibility, the hearing officer’s determination of entitlement to LIBs states that the claimant is entitled to LIBs from the date of injury to the present. The Appeals Panel noted that the hearing officer did not discuss why he chose eligibility from the date after the day of injury. The Appeals Panel noted that under Rule 131.1(b), LIBs begin to accrue as provided by Section 408.082 and are payable retroactively from the date of disability. However, ef-fective January 9, 2008, the initiation of LIBs was interpreted based on the Texas Court of Appeals’ ruling in Mid-Century Insurance Company v. Texas Workers’ Compensation Commission, 187 S.W.3d 754 (Tex. App.-Austin 2006, no pet.). In Mid-Century, the court held that the legislature specifically reserved LIBs for seven enumerated categories of injurious conditions that include both immediately qualifying injuries and those evolving or deteriorating over time. The court noted that the legislature further provided that LIBs are payable “for” those conditions. The court specifically held:

An employee is eligible to receive LIBs on the date that the employee suffers from one of the condi-tions specified in Section 408.161. Section 408.161 does not permit payment of LIBs prior to that date.


Once an employee is adjudicated eligible to receive LIBs, however, LIBs should be paid retroactively to the date the employee first became eligible.

The Appeals Panel noted that the hearing officer determined (and they affirmed) that the claimant was entitled to receive LIBs in this case. Therefore, LIBs should be paid retroactively to the date the claimant first became eligible. In this par-ticular case, the medical evidence upon which the hearing officer relies on was generated much later than the day after the DOI. In fact, the claimant testified that he worked, or attempted to work, and go to college sometime in the years be-tween 2006 and 2011. The Appeals Panel determined that the claimant is only entitled to LIBs from the date that he be-came “incurably insane” or an “imbecile.” The Appeals Panel noted that most of the doctors that commented on the claimant’s condition do not attempt to address a specific date that the claimant achieved this condition. The Appeals Panel reversed that portion of the hearing officer’s determination that finds the claimant entitled to LIBs from the day after the date of injury through the present and remanded the case for further consideration consistent with this decision. There are a number of potential dates that the hearing officer could consider that the claimant became eligible for LIBs; however, the Appeals Panel found eligibility from the day after date of injury was not supported by any of the medical evidence or doctors’ assessments.

The Appeals Panel notes that §401.013(c) does not say that any drug test creates the rebuttable presumption of intoxica-tion, rather only a blood test or urinalysis. The Appeals Panel therefore held that testing of a hair sample, two days after the accident, may be sufficient to raise the question of intoxication under §401.013(a)(2)(B), but it does not create a re-buttable presumption of intoxication under §401.013(c). The Appeals Panel concluded that the hearing officer—by stat-ing the evidence was not sufficient to overcome the presumption of intoxication—applied the wrong standard to deter-mine whether the claimant was in a state of intoxication at the time of the claimed injury. This constituted legal error, therefore, the Appeals Panel reversed the hearing officer’s determination that the claimed injury occurred while the claimant was in a state of intoxication, and remanded the intoxication issue back to the hearing officer for her to apply the correct standard as set out in §401.013 without applying the presumption of intoxication under §401.013(c).


Synergy did not offer evidence that Alliance Savings Co., Inc. was a licensed staff leasing services company at trial and thus could not claim the benefit of its workers’ compensation insurance, including the exclusive remedies provision.

Facts: Thompson was employed by Alliance Savings Co. and was assigned to work at Synergy Management Corp (Synergy). His left arm got stuck in a conveyer belt. Alliance Savings Co.’s workers’ compensation carrier paid medical and indemnity benefits. Thompson later filed suit against Synergy alleging negligence and gross negligence. Synergy alleged that it was protected by the exclusive remedies provision of the Workers’ Compensation Act. The court rejected the motions for summary judgment and directed verdict and the jury then awarded Thompson 1,670,00.00. Synergy appealed.

Holding: Affirmed. The exclusive remedy provision is an affirmative defense that must be plead and proven by a de-fendant. Here, Synergy alleged that the Staff Leasing Services Act (SLSA, found in Chapter 91 of the Texas Labor Code) gives it the opportunity to allege exclusive remedy. Under the SLSA, a license holder may elect to obtain work-ers’ compensation coverage for its assigned employees. If it does, then the policy covers the client company as well. When this happens, the licensed staff leasing company and the client company are co-employers and are both protected by the exclusive remedies provision.

Synergy claimed that Alliance Savings Co was a licensed staff leasing services provider, that Thompson was employed by Alliance and assigned to work at Synergy, and that Alliance had wooer’s compensation insurance that covered Thompson.

The court noted that it could not consider any evidence not admitted at the trial on the merits. Some of Synergy’s evi-dence was submitted in its summary judgment motion and motion for a direct verdict was not admitted at trial. There was no evidence that Alliance Savings Co. was a licensed staff leasing company under the SLSA. Thus, Synergy cannot claim the benefit of Alliance’s workers’ compensation coverage. The court also commented that even if it could con-sider the other evidence not admitted at trial, Synergy still failed to meet its burden to show that Alliance was a licensed staff leasing company. The evidence not considered showed “Alliance Staffing Solutions, Inc.” as the license holder. The SLSA prohibits a license holder from using any other name than the name on the license without specific authoriza-tion. Thus, Alliance Savings Co., Inc. was not a license holder in any event.

The court also noted that Synergy did not raise affirmative defenses of borrowed servant or election of remedies.

Synergy Management Group v. Thompson, No. 11-11-00229-CV, 2012

WL 6050554 (Tex. App.—Eastland Dec. 6, 2012, no pet. h.).


Q: I have a claim that involves an hourly worker

who had just clocked out for the day. After clocking out, she turned around and was heading out the front door when she tripped and fell. Would this be covered under the Coming and Going Rule?

A: No. She was still on the premises, so Going and Com-

ing is not applicable. That principle is aimed at excluding the general public risks of travel. Unless there was a significant delay in time after the clocking out or some intervening per-sonal activity, this is likely to be compensable. The access doctrine will likely cover the expected egress route in and out of the door of the employer. The access doctrine brings into the coverage those areas reasonably expected to be utilized by employees to enter and leave the place of employment.

Q: I received a DWC-69 and narrative report from

the claimant's treating doctor. The doctor is not certified to do impairment ratings. Claimant is stat MMI so I have already made reasonable assessment of 5%. Treating doctor gave 10%. What action do I need to take in this situation?

A: If you want closure, you should go ahead and

request a DD on the IR issue. The 10% would not be subject to finality if it is not valid. But the safer practice is to timely dispute it so that you don’t have to deal with a finality argument. Moreover, your 5% RA is not an im-pairment certification and claimant can attempt to get an IR at any point in the future. You might as well get the case to a DD now.

G Q CORNER

Q: Attached is a DD report that I just received for this

claimant. On the DWC-69 the DD appears to put the ICD-9 code that relates to the compensable injury but in the report he clearly discusses fractures which are not com-pensable. Can/should I request an addendum to the DD? I am going to have to go back and pay him for about a month of being off of work at this time. Please advise.

A: Yes, you should request that the DWC send a let-

ter for clarification to the DD directing him to provide and alternative MMI/IR certification that does not include the disputed fractures.

Q: If the employer didn't have work available for any of the employees during certain weeks, can we use the actual wages earned for the 13 wks preceding the incident when calculating the AWW or should we substitute some of those weeks for prior pay periods when full duty work was available?

A: If there was no work available due to the nature of the employment for any employees during certain weeks, then the zero (0) weeks should be included in the calcula-tion of the AWW because the 0 weeks provide you with a more accurate "average." If, however, the lack of work was unusual and due to causes beyond the employee’s control, you can manipulate the numbers as necessary to come up with a calculation of the AWW that is fair and just to all parties.


G Q CORNER Q: Fact scenario: on 1-1-12 we receive a first report

of injury the client submitted as a “precautionary” means. Claimant at that time confirms he is NOT making any claim for any workers’ compensation benefits. On 8-1-12 the claimant subsequently changes his mind & does make a claim for workers’ compensation benefits. Does our timeframe to pay/or dispute “within 15 days” begin from 1-1-12 or 8-1-12? My question boils down to what constitutes “written notice of injury”? Can I not legitimately take the position that our timeframe did not begin until the claimant actually confirmed he was making a claim for workers’ compensation benefits?

A: If the employer provides you with a first report of injury, even if for "precautionary" measures, you have re-ceived first written notice of the injury. See Rule 124.1(a)(1). You must take action to pay or dispute within the timeframe set out in the act and rules. You cannot legiti-mately take the position that your timeframe did not begin until the claimant actually confirmed he was making a claim for workers’ compensation benefits

Q: I have an employee who has split lost time. She was off work from 10/27/12-11/4/12 which is 1 2/7 wk. She later started losing time as of 12/3/12 and is continu-ing to lost time from work. Would the correct way to pay the resumption of benefits be to pay 12/3/12-12/7/12 and complete the second week or should you pay 12/3/12-9-12?

A: Assuming the date of injury is 10/26/12 or earlier, the 8th day of disability is 11/3/12. So week one is 10/27/12 thru 11/2/12 (waiting period); week 2 is 11/3/12 thru 11/9/12; week 3 is 11/10 thru 11/16; etc.

For the week where she started losing time again on 12/3/12, that week ran from 12/1 through 12/7/12. For that week, you compare AWW with post-injury earnings for the entire week. If post-injury earnings are less than AWW, then you pay TIBs for that week. Payment for that week must be made by 12/8/12.

Q: I have a case in which the first quarter of SIBs

was denied by the DWC. I do not need to do anything at this point - correct?

A: You are correct. You don't even have an obliga-

tion to send the IW a 2nd quarter SIBs application.

Q: Please clarify when the RTW 90 days begin for purposes of commutation of IIBS. Is it 90 days from the MMI or date or simply 90 days of RTW?

A: Rule 147.10 simply requires that the claimant has

returned to work for at least 3 consecutive months. The months do not have to immediately follow the MMI date.


G Q CORNER Q: If an employee is terminated for cause, and later

obtains an off work slip, are Temporary Income Benefits owed? I would normally pay TIBs for someone who is completely off of work, and dispute TIBs if there is a light duty slip and employer could have accommodated the light duty if not for the termination for cause. Am I apply-ing this incorrectly?

A: This is a factually intensive question. If the claim-

ant is terminated for cause while working and earning PIE, then TIBs are not immediately due. However, the claimant can establish entitlement by showing either a changed con-dition or the inability to obtain alternative employment due to the compensable injury.

Q: What circumstances are we able to recover from

the SIF? Here is what I have, I paid a few doctors visits and a few weeks of TIBs until we denied the claim prior to the 60th day while the investigation was being done. Can we recover under this type of circumstance?

A: You cannot recover from the SIF in this situa-

tion. You owe benefits up until the point that the denial is filed if no denial is filed within the first 15 days of the claim.

Q: I was wondering if someone could tell me how

often we are able to request a designated doctor exam. I’ve been told we can request them every 60 days, 90 days and 6 months. What’s the appropriate time allowance between requested exams?

A: In the absence of good cause, every 60 days on a particular issue. So, you could request a DD on MMI/IR and then again on those issues in 60 days after the appoint-ment, if such were reasonable.

Q: We have 2 files for a gentleman, both for a low

back injury. He was given 15% impairment on the first file and now a 5% rating on the current claim. The most recent impairment opinion was given by a designated doctor. Do we need to begin payment of the 5% at this time? What steps do we need to take?

A: You do need to begin paying the 5 % per the DD

opinion. You can take steps to pursue contribution but in order to do so, you need to get an opinion that does appor-tion the two claims and then you need to based on that report, file a DWC-33 requesting contribution.


Task Contact Person Direct Dial

(512)

Fax No.

(512)

E-Mail

Admin. Violations - Compliance

Insurance Coverage - DWC-20s

Seminar Coordinator

Patsy Shelton

FO&L Office Manager 435-2234 241-3301 [email protected]

Client Consultant

Web Vendor Billing Contact

Trina DeCecco

Client Consultant 435-2239 241-3300 [email protected]

Designated Doctor Services

Gayle Lowe [A-G]

Joe Morales [H-M]

Brian Lam [N-Z]

435-2294

435-2289

435-2299

241-3349

[email protected]

[email protected]

[email protected]

Docketing Manager Heather Terrones 435-2217 241-3347 [email protected]

DWC Filings - PLNs - DWC-45

Set Notices for Upcoming

BRC & CCH Notices

Sally Matthews

DATA Manager

435-2237 477-4996

[email protected]

IRO Requests Katie Foster

MRD Manager 435-2266 241-3333 [email protected]

Medical Dispute Resolution Kim Lunday 435-2267 241-3333

[email protected]

Personnel - FOL Support Staff Sharissa Karol

Personnel Manager 435-2224 241-3303 [email protected]

Records Request/Photostats Jasmin Lott 435-2220 241-3317 [email protected]

Texas Workers’ Compensation Manual Sales

Jordan Kazmann 482-9710 472-9160 [email protected]

General Questions

(DWC Rep. Clients) Receptionist 477-4405 241-3300 [email protected]

RME Service Brian Lam 435-2299 241-3332 [email protected]

KEY TASK DIRECTORY To help expedite your email or faxed information to the correct area within FO&L and get it to the re-sponsible person at the earliest time, use the following fax directory. Please remember the 3:30 p.m. receipt deadline for material required to be date stamped at the Division. Material received after 4:00 p.m. does not permit time to deliver it across town prior to the DWC close.
















ATTORNEY& PARALEGAL DIRECTORY

Attorneys

Attorney Direct Dial

(512)

Direct Fax (512)

E-Mail [email protected]

Paralegal Initials @fol.com

Paralegal Direct Dial

(512)

Bobby Stokes 435-2150 241-3305 RDS Anita Drake 435-2249

Carlos Acosta 435-2177 241-3312 CA1 Katie Frank 435-2274

Christina Mayfield 435-2178 241-3322 CLM Melanie Nielson 435-2219

Chuck Finch 435-2158 241-3313 CCF Kristi Collins 435-2263

Greg Solcher 435-2175 241-3318 GDS Shannon Lockridge 435-2298

James Sheffield 435-2169 241-3303 JRS Sharissa Karol 435-2224

Jeremy Lord 435-2184 241-3311 JXL Anita Drake 435-2249

Kevin MacEwan 435-2166 241-3306 KEM Sharon Zarriello 435-2233

Kevin Poteete 435-2163 241-3328 LXT Karen VanLoo 435-2240

Lynette Phillips 435-2165 241-3308 LLP Sharon Zarriello 435-2233

Nancy Ippolito 435-2181 241-3321 NHI Melanie Nielson 435-2219

Paul Stone 435-2157 241-3316 PBS Karen VanLoo 435-2240

Pamela Pierce 435-2152 241-3336 PEP Shannon Lockridge 435-2298

Rebecca Strandwitz 435-2160 241-3320 RMS Kristi Collins 435-2263

Rhett Robinson 435-2154 241-3309 SRR Marilyn Mueller 435-2229

Roy Leatherberry 435-2179 241-3314 RJL Katie Frank 435-2274

Ryan Reed 435-2151 241-3310 RWR Anita Drake 435-2249

Steve Tipton 435-2162 241-3304 SMT1 Mary Casebier 435-2275

Tricia Blackshear 435-2180 241-3323 PHB Cindy Salas 435-2223


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