Legal Corner

Workers’ Compensation 

WCAB does not have authority to overturn award of medically necessary housekeeping services – California

When housekeeping services are requested by a physician and are reasonably required for an injured worker, they qualify as medical treatment. As such, the Court of Appeals for the 2nd District ruled that if a physician makes a request for a medical treatment, an employer cannot deny it unless a utilization reviewer determines that it is medically unnecessary.

In Allied Signal Aerospace, Constitution State Service Company v. Workers’ Compensation Appeals Board and Maxine Wiggs, the injured worker was receiving housekeeping services twice a month, but the physician requested a change to every week. The company submitted the request to utilization review. The reviewer found the more frequent schedule was not medically necessary. However, the WCAB supported a judge’s ruling to submit the records to a registered nurse who had made an earlier assessment of need for review.

The 2nd DCA vacated the WCAB’s ruling noting that since there was no stipulation to displace the provision of housekeeping from the UR-IMR process, the WCAB had no jurisdiction to review the medical necessity and reasonableness of service.

Exclusive remedy bars personal injury claim by firefighter kicked in the groin by supervisor – California

In Tibbett v. Los Angeles County Fire Department an appellate court affirmed a jury’s ruling that a firefighter’s unintentional injuries were barred by the exclusive remedy of workers’ compensation. The incident occurred when the firefighter complained to a supervisor about how a situation with a hostile victim was handled. The fire captain said he was showing a maneuver to keep volatile patients away by obstructing their vision, but the firefighter moved and he kicked him in the groin with a steel-toed shoe.

The firefighter had emergency surgery to remove his left testicle and underwent more surgeries that rendered him sterile. The court agreed with the jury, finding the fire captain did not intend to harm the firefighter; therefore, workers’ comp was the exclusive remedy.

Challenge to the presumption of correction for the opinions of EMAs rejected – Florida

In De Jesus Abreu v. Riverland Elementary School, the 1st District Court of Appeal rejected a constitutional challenge to the statutory presumption of correctness for the opinions of expert medical advisers (EMA). The employee suffered a compensable injury to her shoulder and an arthroscopic shoulder surgery was performed to address a partial rotator cuff tear.

While the physician deemed she had reached MMI, she continued to report pain and she sought care from an unauthorized orthopedic physician who recommended further surgery. The company authorized another orthopedist, who did not recommend further surgery. However, the employee obtained an IME from a doctor who thought surgery was appropriate.

Because of the conflicting opinions, a JCC appointed an EMA who opined that no further surgery was recommended or medically necessary. The JCC denied surgery because state statutes provide that the opinion of an EMA is presumed to be correct unless there is clear and convincing evidence to the contrary.

The employee appealed, arguing that the presumption improperly usurps the rulemaking authority of the state Supreme Court and that the presumption interferes with the executive branch’s ability to fairly adjudicate workers’ compensation claims. The court disagreed.

Restaurant manager shot in off-hours robbery can receive benefits – Georgia

In Kil v. Legend Brothers, the Court of Appeals overturned a denial of benefits to a restaurant manager who was shot as he was arriving home from work with the day’s receipts, which he regularly reviewed when he got home. The worker lived with the restaurant owner and his coworker. When he arrived home with his coworker, they were attacked by three men who demanded money. When the attackers realized the worker had a gun, they fled, but shot him in the forearm and he has not been able to work.

Both an administrative law judge and later the state Board of Workers’ Compensation awarded him comp benefits, ruling that his injury arose within the scope and course of employment. However, a state superior court reversed, finding that he was not at work at the time of the armed robbery and shooting-that he was home and that he was shot because he had a gun, which “had nothing to do with performing his duties for his employer.”

The Court of Appeals disagreed, noting one of the worker’s key job responsibilities was to spend around an hour every day going over the restaurant’s daily sales, receipts, accounts and inventory and that he was continuing his duties as manager.

Insurer must pay for injuries despite misinformation in policy – Georgia

In Grange Mutual Casualty Co. v. Bennett, several mistakes were made when an insurance agent took the company’s business information from its policy with a former insurer. She misclassified the company that was a construction company involved in greenhouse repair and maintenance as providing janitorial services and erroneously noted that employees did not travel out of state and that workers did not perform work above 15 feet. While the owner signed the policy, there was a dispute whether it was complete at the time.

When an injury that occurred out of state was denied, the company told the agent the policy had to be changed because most of its business was out of state. When the insurer learned more about the business operations it said it would not have issued the policy if the application had correctly stated that the company operated in 30 states because Grange Mutual was not licensed to issue policies in all of those states. It sent a cancellation notice but gave the company 90 days to find an alternative.

In less than 90 days, another worker was injured out of state, suffering extensive injuries in a truck accident. An administrative judge held that Grange Mutual’s policy covered the employee’s injuries and that by agreeing to pay for workers’ comp claims under the laws of Georgia, the Georgia-based company’s workers were covered even when out-of-state. Further, an appellate court held that Grange Mutual waived its void policy defense when, after discovering the inaccurate information on the application, it informed the company that its coverage would continue for 90 days. The court said that if the insurer “believed that the policy was void based on fraud, it should have immediately rescinded it.”

Borrowing employer’s immunity from tort liability not dependent on insurance – Illinois

In Holten v. Syncreon North America, an appellate court ruled that a temporary staffing service’s employee could not pursue a negligence suit against his borrowing employer for work injuries. The worker received comp benefits from the staffing agency for injuries resulting from a forklift accident, but filed suit against the borrowing employer, asserting its negligence had led to his injuries.

The state Workers’ Compensation Act provides that the lending and borrowing employers are jointly and severally liable for workers’ compensation benefits, but both do not have to provide the insurance. As long as one of the employers pays benefits, both have civil immunity. The immunity springs from the borrowed-employee relationship itself.

Employee can sue Canada – Massachusetts

Federal law immunizing foreign governments from liability does not protect Canada from being sued as an uninsured employer under the state’s workers’ compensation statute for injuries suffered by a consulate employee in Boston, the 1st U.S. Circuit Court of Appeals ruled in a 2-1 decision. In Merlini v. Canada, the Court found that the Foreign Sovereign Immunities Act provides an exception to immunity for a foreign state that engages in a “commercial activity.” The court said Canada entered into a contract for commercial services by hiring Merlini and failed to carry workers’ comp insurance as required of commercial employers in the state.

Worker who resigned after injury can collect unemployment – Minnesota

In Interplastic Corp. v. Rausch, a long-time employee injured his back and was transitioned to a lower job but received the same wage and accompanying pay raises over the next three years. He was then notified his wage was being reduced to align with the position and he was ineligible for future raises. About the same time, the workers’ compensation claim was settled and he received a $25,000 payout and agreed to “voluntarily terminate his employment.”

When he applied for unemployment benefits, he was denied because he had voluntarily quit. However, a three-judge appellate court panel affirmed an unemployment law judge’s decision that a substantial pay reduction, the lack of future earnings potential, and the claim settlement allowed the worker to fall under the state’s statutory exception for unemployment eligibility.

Worker’s manufacture of meth does not forfeit comp benefits – New York

In Robert Stone v. Saulsbury/Federal Signa et al., an appellate court ruled that a worker’s conviction for manufacturing methamphetamine did not forfeit his entitlement to benefits for two industrial injuries. The court upheld the WCB ruling that the man who had been collecting indemnity benefits for a compensable injury prior to his conviction and incarceration did not violate state workers’ compensation laws when he became involved in the production of illegal drugs.

The insurer contended that the manufacture of methamphetamine constituted “work”. The court disagreed, “substantial evidence supports the Board’s finding that the conviction alone is insufficient to establish any work activity by claimant or that he received any type of remuneration.”

Denial of occupational disease does not prevent new theory of accidental injury – New York

In Matter of Connolly v. Covanta Energy Corp., an appellate court reversed the state Workers’ Compensation Board’s finding that a worker suffered from an occupational disease (allergic bronchopulmonary aspergillosis) and remitted the matter to the Board for further proceedings. However, this would not prevent the worker from arguing an accidental injury claim on essentially the same facts. After remand, the Board was free to consider the new theory for the claim.

Elimination of labor attachment requirement for PPD not retroactive – New York

In Matter of the Claim of Scott v. Visiting Nurses Home Care, a worker who was classified as having a permanent partial disability, was found to have voluntarily withdrawn from the labor market and benefits were suspended twenty-two years after her injury. In 2017, the law was amended to provide that proving attachment to the labor market was no longer necessary for permanent partial disability compensation.

After the amendment took effect, she filed a request for reinstatement of benefits. A law judge, the Board, and the Appellate Division’s 3rd Department all agreed that the amendment did not apply retroactively.

Failure to mention side business not fraud – New York

In Matter of Permenter v. WRS Envtl. Servs. Inc., a truck driver’s failure to disclose his involvement in an online and retail flower business was not the sort of misrepresentation that should disqualify him from receiving workers’ compensation benefits according to an appellate court ruling. The employee had freely admitted that he owned a company engaged in the flower business, but the employee did not consider it work because it was not profitable.

Termination of benefits OK for a minor physical deformity, but no physical impairment – Pennsylvania

In Paolini v. Delaware County Memorial Hospital, the Workers’ Compensation Appeals Board held that the workers’ compensation judge (WCJ) did not err in awarding benefits to a nurse who sustained physical injuries and post-traumatic stress disorder as a result of a dog bite while performing a home visit. Her doctor provided unequivocal medical testimony that she had sustained PTSD as a result of her work injury, even though her Facebook page showed her swimming and parasailing.

However, the board reversed the WCJ’s denial of the employer’s termination petition, as the employer’s examining physician found that although the nurse had slight discoloration and subjective, mild numbness, she had fully recovered from the physical dog bite.

Injuries incurred on railroad bridge not covered by longshore comp – Virginia

In Muhammad v. Norfolk Southern Railway Co., a three-judge panel of the 4th U.S. Circuit Court of Appeals reversed and remanded a district court’s holding that the worker’s negligence claim was barred by the exclusive remedy under the Longshore and Harbor Workers’ Compensation Act (LHWCA). While working on a bridge that crosses a navigable river, a portion of the walkway collapsed beneath the employee and he sustained serious injuries.

He filed suit against the railway, asserting a negligence claim under the Federal Employers Liability Act, but the company argued the claim was subject to the LHWCA. The district court agreed, finding repairing and rebuilding the bridge was an “essential and integral element” of the maritime traffic flowing under the bridge, therefore, his work constituted as engaging in maritime employment.

Upon appeal, the 4th U.S. Circuit Court of Appeals reversed and remanded the district court’s decision. It noted that the LHWCA requires employee work “upon navigable waters” and that a bridge would not be covered by the statute.

For Cutting-Edge Strategies on Managing Risks and Slashing Insurance Costs visit www.StopBeingFrustrated.com

Five mistakes employers make when using data to develop risk control programs

Data analytics is a key driver in the development of business strategy and workers’ comp claims are a goldmine of information. Yet, when not used properly, the results can fall far short of expectations. Here are five common mistakes:

  1. Relying solely on the insurance company Some employers rely solely on the insurance company to analyze their claims and make recommendations to prevent injuries and control costs. In recent years, insurance companies have beefed up their analytics and embraced predictive analytics to manage claims. They use information from years of past claims to build models that will predict what may happen next in a particular claim. Indeed, such information benefits employers.Insurance companies also are a great resource for claims information in your industry. They can provide helpful guidance for how you stack up versus your peers.But it’s important to have realistic expectations and remember that the insurance company’s goal is to leverage data to improve their profits. This can lead to aggregate information or a cookie-cutter approach that falls short of your needs.
  2. Data such as injured-worker demographics, department, type and severity of injury, frequency, timelines and money set aside for reserves of claims, and if the claim ends up in litigation can all help employers guide future outcomes. Smart employers regularly review their loss run reports from the insurance company that includes this information, not only to ensure it is correct (errors mean increased premiums) but also to identify trends that lead to actionable insights. What are the main drivers of incidents in the organization and what can we do to change are the key questions to ask in analyzing data.
  3. Observing metrics at face value Each year, Risk & Insurance identifies “All Stars” who stand out from their peers by overcoming challenges through exceptional problem-solving, creativity, perseverance, and/or passion. One of the 2018 All-Stars was Kevin Farthing, environmental health and safety manager for Florida-based Sparton Electronics, a 600-employee company manufacturing sonobuoys for the navies of the world.The company faced a high number of musculoskeletal injuries and annual workers’ comp claim costs exceeding $500,000. Multiple modifications to the production processes and attempts to control ergonomic risk factors had not solved the problem.Digging through the data, he discovered that 40 percent of the musculoskeletal injuries were occurring during the first three years of employment. The company was hiring workers who were not capable of performing the physical demands of the job.
  4. He then took the logical next step and worked with a company to design specific post-offer, pre-employment tests to make sure candidates were up to the physical challenges. But he did not stop there.
  5. The failure rate on the test was high – 50%. Rather than lowering the demands of the tests, he identified which tests individuals were failing most and modified the actual work tasks. For example, they no longer require employees to manually move certain types of heavy loads. Coupled with other changes, a two-year investment of $174,000 has yielded an expected savings of more than $950,000.
  6. Not being objective or hanging on to old beliefs Commitment to the status quo or leadership thinking may limit taking action on data. Some rationalize that the incident rate is acceptable and changes will mean lower production. Or a belief that “injuries are part of the job” or simple complacency. Buy-in from management can take effort and tenacity.For many years, it was believed (and documented) that inexperience and inadequate onboarding put younger workers at increased risk and they were more likely to suffer a workplace injury. On the other hand, older workers would experience fewer injuries but would take longer to recover and have more costly claims. Recent research from the National Council on Compensation Insurance (NCCI) dispels this conventional wisdom and finds that younger workers are getting injured less often than their older peers.The workforce is changing and processes are becoming more automated. While the number of workers under 55 has remained more or less stable, the number of workers who are 55 or older has doubled since 2000. Women make up more than half of labor force growth. Relying on old data or beliefs leads to ineffective and costly programs.
  7. Year-over-year analysis will show how claims are changing. This will tell you if initiatives are working or if a new direction is warranted.
  8. Failing to segment An important finding of the NCCI research was that key injury risks vary by age group. Younger workers are prone to injuries from contact with objects or equipment, while overexertion injuries are most vexing for employees in the middle of the age spectrum. Meanwhile, slips, trips and falls disproportionately affect those over 55.There’s clear value for employers to mine their own claim data correlating type of injury with age and gender of workers. When younger male workers are experiencing a higher incidence of injuries from contact with objects or equipment, a change to interactive and technology-based training, rather than a dry manual, could be an effective way to improve safety.It’s not just age subsets that can help employers to be tactical in the way they manage their safety budget. Comparing similar departments can identify why one department may be functioning at a higher level than the others and then apply the best practices to other departments.
  9. Not looking beyond the data Although there are many sophisticated data tools, programs cannot rely on data alone. There is a myriad of subjective factors that affect incident rates. Production pressure, management safety practices, limiting mind-sets, and fear of automation are just a few.These factors cannot be quantified with statistics. Instead, organizations need to have subjective methods to review these factors that represent the “heart” of their workers’ comp program.

For Cutting-Edge Strategies on Managing Risks and Slashing Insurance Costs visit www.StopBeingFrustrated.com