Workers' Compensation

Noteworthy Workers' Compensation Legal Trends 2016: Part One

This article surveys recent legal trends in the states of Arizona, California, Delaware, Georgia, and Kentucky as explained by our workers’ compensation experts below.

ARIZONA

The Arizona Legislature has enacted several new laws, all of them effective August 6, 2016:

1. A.R.S. §23-941 has been amended by adding new subsection (I). An interested party is now entitled to a one-time right to request a change of administrative law judge without cause. Previously, parties had to allege that the ALJ to whom a case was assigned was either biased or prejudiced.

2. New section A.R.S. §23-941.02 permits an ALJ to designate a pro se litigant a “vexatious litigant,” when he or she has engaged in conduct that is detrimental to the administration of justice. Once a pro se litigant is so designated, he or she cannot request a hearing, submit pleadings, or file motions without permission of the ALJ.

3. New section A.R.S. §23-954 clarifies the circumstances in which interest is potentially payable on disability benefits. Interest is now payable in only two circumstances: (a) when benefits are not paid within ten days after the date that an award or notice of claim status granting permanent disability benefits has become final; and (b) in all claims for dependent benefits, when the claim is first denied and then subsequently accepted or found compensable by an award. In the latter instance, benefits are payable from the date that the claim for benefits was filed.

4. A.R.S. §23-1062(B) has been amended to provide that “medical, surgical, and hospital benefits” may include translation services, if needed.

R. Todd Lundmark
Lundmark, Barberich, LaMont & Slavin, P.C.
Phoenix, Arizona
602-279-9777
tlundmark@klbllaw.com

© Copyright 2016 Lundmark, Barberich, LaMont & Slavin, P.C. Reprinted with permission.

CALIFORNIA

In 2016, California has seen a recent spike in regulatory activity. Chronic pain and opioid guidelines were adopted, and guidelines to implement a prescription drug formulary are under consideration. Guidelines for interpreter services and home health care are also under consideration.

California has continued to be plagued by high profile instances of medical provider fraud, particularly in the Los Angeles area. Several bills that would make it harder for these sort of providers to operate in the system received legislative approval and are likely to be signed by Governor Brown.

Wide use of utilization review continued to generate debate. Insurers argued that the volume of denials was small on a percentage basis, while worker advocates continued to complain about treatment denials in chronic cases. A bill to loosen up on utilization review during the first 30 days after an injury sailed through the legislature.

Medical and pharmacy costs continued on a downward trend, but medical cost containment costs continued to rise at a substantial rate. According to a May 2016 California Department of Insurance actuarial evaluation, indemnity costs were around the same level as before the 2012 reforms, despite the touted permanent disability increases included in the reforms. The California DOI also noted that loss adjustment expenses approached the level of indemnity payments.

In the courts 2016 has not been a major year for California workers’ comp. One case that does stand out, however, is King v. Comppartners, Inc. In King the Court of Appeal held that a utilization review doctor who rejected certification of a medication whose abrupt cessation could have consequences may owe a duty to the injured worker and be subject to a tort civil action. The California Supreme Court has granted review of the case.

Julius Young
Boxer & Young
Oakland, CA
(510) 286-2932
jyoung@boxerlaw.com

© Copyright 2016 Boxer & Young. Reprinted with permission.

DELAWARE

The September 28, 2016 Supreme Court oral argument in the case of Roos Foods v. Magdalena Guardado, Del. Supr., No. 160, 2016 has the potential to create what many would argue is a special class of displaced worker for the undocumented work force. Heretofore, an illegal alien receiving total disability would be subject to the termination of benefits by one of the following: (1) voluntary signature on a Final Receipt; (2) an actual return to work; (3) the refusal of an actual job offer; or, (4) a hypothetical labor market survey, noting that this last option would be the most likely manner of termination benefits. Prior to the decision in Roos Foods v. Guardado, the Industrial Accident Board relied upon a 20 year old IAB ruling in Tomas Gonzalez v. Krispy Kreme Donuts for the proposition that a labor market survey was a valid showing of job availability, allowing the argument that “but for” the employee’s illegal status, the jobs would otherwise be within reach, with the illegal alien status a factor not to be considered. What the Roos Foods case has done in both the Industrial Accident Board as well as the Superior Court decision on appeal, is impose a punitive outcome on employers for hiring undocumented workers and create what many would argue is its own class of displacement that allows an enhanced level of benefits to illegals, beyond that which is available to their legally-employed counterparts, who more often than not, experience a termination of their disability benefits by virtue of the long-embraced labor market survey. Short of the unlikely showing of a job offer to a known-illegal, the practical outcome of these decisions below is that the injured worker will remain on total disability ad infinitum unless medically cleared to full duty. Legal pundits and comp practitioners anxiously await the high court’s ruling.

Cassandra F. Roberts, Partner
Young Conaway Stargatt & Taylor, LLP
Wilmington, Delaware
302.571.6622
croberts@ycst.com

© Copyright 2016 Young Conaway Stargatt & Taylor, LLP. Reprinted with permission.

GEORGIA

One of the more closely followed pieces of legislation in the 2016 legislative session was eventually vetoed by the Governor. HB216 sought to create a rebuttable presumption that certain medical conditions for firefighters such as heart disease, respiratory disease and certain types of cancer were work-related and thus compensable. The veto statement reflected, “I am concerned that codifying an exception for one occupation at this relatively low standard of proof with no time limitation on diagnosis or restriction on eligible types of cancer is a broad solution for a problem not yet abundantly demonstrated in Georgia.” The Governor signed HB818 to take effect July 1, 2016. Significant items in the bill include provisions to increase the maximum temporary total disability benefit rate from $550.00 per week to $575.00 and to increase the maximum temporary partial disability benefit rate from $367.00 per week to $383.00, for accidents occurring on or after July 1, 2016. The bill also increased, from $220,000.00 to $230,000.00, the maximum total compensation payable to a surviving spouse as a sole dependent at the time of death where there is no other dependent for one year or less after the death of the employee. Effective January 1, 2016, the Board added Rule 200.2 which permits the use of medical case managers, commonly known as nurse case managers, even in non-catastrophic injury claims.

Significant case law decisions include Burdette v. Chandler Telecom, LLC, 335 Ga. App. 190, 779 S.E.2d 75 (2015), cert. granted, 2016 Ga. LEXIS 367 (May 9, 2016) where the Court of Appeals determined that the willful misconduct defense did not apply where an employee was seriously injured when he engaged in “a hazardous act in which the danger was obvious” and intentionally violated a company rule and defied his supervisor’s explicit instructions to climb down from a cell tower rather than using controlled descent. The Supreme Court has granted certiorari to review the case. In Sturgess v. OA Logistics Servs., 336 Ga. App. 134, 784 S.E.2d 432 (2016), the Court of Appeals determined that an employee’s unprovoked attack and murder by a co-worker, who shot him in the back of the head, arose out of and in the course of his employment because the employment placed the worker in a locale that exposed him to being shot and it was only because of the employment that there was any contact or relationship with the shooter. In Roseburg Forest Prods. Co. v. Barnes, 2016 Ga. LEXIS 401 (June 6, 2016), rev’g 333 Ga. App. 273, 775 S.E.2d 748 (2015), the Georgia Supreme Court reversed the Court of Appeals decision and found that the two year change in condition statute of limitations does in fact bar additional benefits where a catastrophic claimant returned to work and later sought income benefits over two years after last receiving benefits.

Douglas T. Lay
Kissiah & Lay
Alpharetta, Georgia
(770) 667-0600
dtlay@kissiahlay.com

© Copyright 2016 Kissiah & Lay. Reprinted with permission.

KENTUCKY

There are no legislative developments this year, but there is Trane Commercial Systems v. Tipton, 481 S.W.3d 800, a 2016 published Kentucky Supreme Court decision. Prior to Tipton, there had been a series of unpublished decisions that caused quite a stir in the workers’ comp community. They interpreted the TTD statute as well as some prior case law to stand for the proposition that even if an employee is not MMI, he can return to work at light duty. If that light duty was not his customary or regular employment, he would still be entitled to temporary total disability benefits plus his wages. So you have a situation where an injured employee has not attained MMI but his doctor has released him to return to work with restrictions. The employer accommodates those restrictions, but it’s not his regular employment. Under these cases and their interpretation of the law, he would be entitled to both TTD benefits and his wages while returning to work. The Court in Tipton did not think it was just. They held it would be unreasonable to terminate the benefits of the employee when he is released performing minimal work, but it would be just as unreasonable, they said, to pay TTD benefits just because the work performed during a return to work was not the type of work performed at the time of injury. Two takeaways here: (1) with this decision, the employers are more likely to allow a return to work at light duty; and (2) employees now have an opportunity to get back to work faster because their employers are more willing to allow them to return to work.

Marcus Roland
Roland Legal PLLC
Lexington, KY
859.402.2671
mroland@rolandlegal.com

© Copyright 2016 Roland Legal PLLC. Reprinted with permission.