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By Thomas A. Robinson, J.D.
As we put together this year’s edition of our Workers’ Compensation Emerging Issues Analysis series, I allowed to a colleague that I felt as if 2018 might appropriately be characterized as “the quiet before the storm.” That is to say that although there have been several important decisions from state appellate courts this year—e.g., see my discussion below of cases from Kansas, Oklahoma, and Maine—things actually seem to have been pretty quiet during 2018. Subjectively, for reasons that I also outline below, it leaves me wondering if the other shoe is about to drop.
At least from my perspective, the reasoning originally put forth by claimants’ groups in Florida’s 2014-2015 “Padgett” litigation, pushed forward in the Kansas Johnson litigation (among others), discussed below—that over time there has been such an erosion of injured employee rights that the original “grand bargain” is no longer in place and that claimants should, therefore, be allowed to proceed against employers in tort—is gaining steam. Of course, one Kansas decision does not momentum make. That decision may not even stand up on appeal, Nevertheless, I’m left wondering if next year we might see several more cases like Padgett and Johnson. We might even see a healthy debate regarding the level of overall benefits being paid to injured employees.
At the state level, the debate will be far from monolithic, since more is at stake in those jurisdictions within which the perceived erosion of benefits is greatest. Indemnity and medical benefits, after all, are far from uniform across American jurisdictions. States also differ in the levels of proof required by claimants to establish claims. Because of the state-by-state differences, “victories” or “losses” in one state, such as Kansas, may not necessarily be repeated elsewhere. And so, as I say, 2018 could be stormy.
Use of AMA Guides (6th Edition) Continues to be Controversial
While it has been more than a decade since the release of the 6th Edition of the American Medical Association's Guides to the Evaluation of Permanent Impairment, the cacophony of criticism regarding their use remains robust. This time last year, the workers’ compensation world was abuzz following Pennsylvania's Protz and Thompson decisions. The heated debate over the 6th Edition continued during 2018, with two additional decisions that warrant mention.
Oklahoma High Court OKs Use of “Current Edition” of AMA Guides
The first, from Oklahoma, Hill v. American Medical Response, 2018 OK 57 (June 26, 2018), held that those sections of Oklahoma’s Administrative Workers’ Compensation Act (AWCA) that require use of the “current edition” of the AMA’s Guides to determine PPD do not violate the Constitution. As I mentioned in my blog (workcompwriter.com) a few days after the opinion came down, the Hill decision would appear, at least at first blush, to be in total conflict with the Pennsylvania Supreme Court’s ruling Protz, which generally held that the use of similar language in the Keystone State’s Act constituted an unconstitutional delegation of legislative authority to the AMA.
A close reading of the majority opinion in Hill shows otherwise. As the Oklahoma court stressed, Pennsylvania’s statute requiring use of the “most recent” edition of the guides became law when “the most recent” edition was the 4th, not the 6th Edition. It was entirely appropriate, therefore, for the Pennsylvania court to conclude that requiring use of the 6th Edition, without additional legislation, amounted to turning things over to the AMA. The people of the Keystone state had elected legislators, not the AMA, to set its rules.
Oklahoma’s “current edition” language was enacted after the publication of the 6th Edition. If the AMA were to come out with a 7th Edition, that edition would not be the edition used in Oklahoma; the 6th would remain authoritative, since that edition was “the current” edition at the time the statute became law.
Kansas Court Strikes Down Use of AMA Guides 6th Ed.
In the second important 2017 decision on use of the 6th Edition, Johnson v. U.S. Food Serv., 2018 Kan. App. LEXIS 44 (Aug. 3, 2018), the injured employee did not base his argument upon an alleged unconstitutional delegation of power to the AMA, as had been the argument in Protz and Hill. Instead, his was a “Padgett-like” argument: that with the original passage of the Kansas Workers’ Compensation Act, a bargain had been struck between the various contingencies, but that the original “grand bargain” had been so eroded over the years that, following the adoption of the 6th Edition, the scales had permanently tipped in favor of the employer. In other words, there no longer was any meaningful “grand bargain.”
The Kansas Court of Appeals agreed and struck down use of the 6th Edition. At least until such time as an appeal is heard by the Supreme Court of Kansas, the 4th Edition of the Guides must be utilized. It is important to note that the Court of Appeals here did not find the entire Act unconstitutional—only the use of the 6th Edition. This raises the obvious question of whether any other current provisions of the Kansas Act would fail to pass muster if challenged.
Is the “Padgett” Argument as Strong as it Appears?
A bit more than a year ago, I participated in a roundtable in which the panel discussed current trends in “the comp world.” The discussion took place eight or ten months after the U.S. Department of Labor released its now well-known report on the adequacy of state-based workers’ compensation programs. To get things started, one participant asked the group the following question: “Indeed, hadn’t the original ‘grand bargain’ been abrogated within a number of jurisdictions by legislative slashing/tinkering over the years?”
The always-provocative Bob Wilson, a panel member, retorted (my recollection, not necessarily his exact words), “Did the ‘grand bargain’ originally contain benefits for occupational diseases? Were the original schedules of injuries, for which loss of wages need not be proved, as broad as they currently are? Were mental injury claims originally allowed in many states? Was there broad general medical coverage for palliative care?” Bob could, of course, have gone on. Bob’s point: a proper “Padgett-like” examination of what’s happened within a specific state should include not just the “erosion” of benefits, but also some discussion of instances in which current coverage is broader than originally anticipated.
Utah Court Rejects “Padgett” Argument in Two Cases
That sort of examination occurred in two Utah cases decided in late 2017, after our production deadline for last year’s Workers’ Compensation Emerging Issues Analysis edition. In Petersen v. Utah Labor Comm’n, 2017 UT 87, 416 P.3d 583 (Dec. 1, 2017), the technical issue was whether the Utah temporary total disability compensation statute, Utah Code Ann. § 35-1-65 (1982) (current version at Utah Code § 34A-2-410 (2016)), operated as an unconstitutional statute of repose under the Open Courts Clause of the Utah Constitution. The Court held that it did not. The Court added, however, that the only plausible challenge that the claimant could have raised was that § 35-1-65 was an “inadequate substitute remedy” for the loss of an injured employee's common law tort claim (i.e., a “Padgett-like” argument).
Echoing Bob Wilson’s set of queries, the Court indicated that positives had to be examined along with the negatives. The issue was not simply whether a particular claimant might enjoy greater rights under common law; the overall effect of the Act must be considered. The Court concluded that the Utah Workers' Compensation Act, as a whole, was an adequate substitute remedy for the loss of such a tort claim. In the second decision, Waite v. Utah Labor Comm’n, 2017 UT 86, 416 P.3d 635 (Dec. 1, 2017), the Court similarly held that the state’s 12-year limitation on permanent disability benefits under Utah Code Ann. § 34A-2-417(2)(a)(ii) was a statute of repose, but was not unconstitutional, since the issue had been contentiously debated within the state legislature and it was a reasonable and non-arbitrary means of achieving a valid legislative purpose—to end the prolonged and uncertain liability for both insurance companies and employers and reduce the level of associated insurance premiums.
Although both Utah claimants were unsuccessful with their “Padgett” arguments, others will likely take up the gauntlet. 2019 will likely be a year in which the debate on both sides of this important question is spirited and loud. I can’t wait to see the results.
Other Important Issues: Medical Marijuana
Although 2018 was a relatively quiet year in terms of constitutional challenges, there were other important decisions around the country that you should know about. One of them came from Maine, a state not known for its litigiousness. In a case of first impression, the Supreme Judicial Court of Maine, in a 5-2 decision, held that an employer may not be required to pay for an injured worker’s medical marijuana use [see Bourgoin v. Twin Rivers Paper Co., LLC, 2018 ME 77, 187 A.3d 10 (June 14, 2018)]. Indicating that it was deciding the case on “narrow” grounds, the majority reasoned that there was a “positive conflict” between the federal Controlled Substances Act (CSA) and the Maine Medical Use of Marijuana Act (MMUMA) [Opinion, ¶ 1] and that, under such circumstances, the CSA preempted state law.
As with past editions of this work, we have assembled a number of timely and incisive articles by nationally-known legal experts and commentators on a host of interesting issues.
The Future of Workers’ Compensation
Deborah Kohl’s piece, “Workers’ Compensation and the Future: The Macro Versus the Micro View,” offers powerful insight into the tensions at play between those who see things predominantly “in the micro,” and who, therefore, are concerned with pushing for change in benefits, administration, and claims adjusting (at a minimum) and those who concentrate “on the macro,” and who worry that the system may break down totally if projected cost increases for claims outlay and administration are not stemmed.
Richard Rubenstein, in “Workers’ Compensation of the Future: Will Mutual Dystopia Be the New Normal?”, offers his insights into a lively, recent roundtable discussion that took place earlier this year among David Stills, Mark Wilhelm, David North, Matt Peterson, and others, with co-moderators Mark Walls and Kimberly George. One of the questions offered: “Is workers’ compensation 1.0 a dumpster fire, or still a Grand Bargain?”
The Opioid Crisis
One would have to live in a deep hole not to know that America is in the midst of an opioid crisis. After all, more than 90 Americans die each day from opioid overdoses. While many of these deaths are unrelated to occupational injuries, nevertheless, addiction and overuse of opioids is also common within the workers’ compensation world, since opioids are often prescribed for post-surgical pain and other complex conditions associated with workplace injuries and conditions. This year’s edition contains a number of articles and commentary on this hot issue.
In “New Study Links Pre-Injury Opioid and Benzodiazepine Use with Risk and Cost of Post-Injury Disability,” I examine a report published by the Journal of Occupational and Environmental Medicine, which supports the widely-held, although not thoroughly documented, notion that pre-injury opioid and benzodiazepine use may increase the risk and cost of disability after a work-related injury.
In “WCRI Study Reveals Causal Connection Between Long-Term Opioid Prescribing and Duration of TTD Benefit Periods,” I examine another study that argues there is indeed a causal relationship between the practice of providing extensive opioid prescriptions to an injured worker and the duration of that workers’ temporary disability benefits.
Roger Rabb, in a piece entitled “An Alternative to Opioids: A Mind-Body Approach to Pain Management,” reports on a recent OutFront Ideas webinar sponsored by Safety National and Sedgwick, in which participants discussed pain management techniques that might serve to reduce dependence on opioids and other pills, focusing primarily on the mind-body relationship and behavioral and psychological factors that might be addressed when seeking to reduce chronic pain.
In my piece entitled, “Recent Veterans Study Has Important Implications for Workers’ Comp World,” I highlight the findings of a recent study published by the International Association for the Study of Pain in which it is shown that the joining the pain medications may increase the risk of experiencing an adverse outcome by some 36 percent, when compared to a baseline of nonacute opioid-only use. While the study concentrated on veterans, I argue that it has important implications for the workers’ compensation world since many injured workers share similar symptomatology with injured or wounded veterans.
Finally, and on a somewhat similar note, in “Interrelationship Between Personal and Occupational Risk Factors Complicates Opioid/Benzodiazepine Crisis,” I review a recent study sponsored in part by the National Institute of Occupational Safety and Health (NIOSH) and the Health Resources and Services Administration (HRSA) that demonstrates the interrelationships among occupational risk factors (ORFs), personal risk factors (PRFs), and prescription drug (PD) use involving opioids and/or benzodiazepines in the occupational setting.
Prominent New York attorneys Ronald Weiss and Ronald Balter offer keen insight into recent “Trends and Developments” in the Empire State. Stuart Colburn, from the Lone Star State, offers his own expertise in “Texas: New Commissioner Speaks and other Texas-sized Updates.”
In “Comp Claims: Men Really Are from Mars—Women From Venus,” I review a study published in the Journal of Occupational and Environmental Medicine that points to sex-specific patterns in reoccurring injury claims.
In a piece entitled, “Is the Wall Strong Enough?”, I examine two recent decisions testing the limits of the “wall” or barrier created by the McCarran-Ferguson Act (“MFA”), which generally prevents federal oversight of state workers’ compensation programs. In both cases, the courts ruled that states may not regulate the amounts air ambulance firms charge for transporting injured employees who are covered by state workers’ compensation programs. Such regulation is not allowed because air ambulances are “air carriers” whose compensation rates are preemptively regulated by the Airline Deregulation Act ("the ADA”). The cases are important because in both instances, the courts utilized a narrow definition of “business of insurance,” as that term is used in the MFA. Will this narrow reading allow federal oversight into other areas of workers’ compensation law?
In “Employer-Controlled Medical Care Drives Claimants to Attorneys, Erasing Savings in Medical Costs,” I review a recent article published in the Journal of Occupational and Environmental Medicine that cuts against the grain of a popularly-held notion in the workers’ compensation world—that allowing the employer/carrier to choose the injured worker’s treating physician leads to overall savings in claims costs. The JOEM study tends to show that the practice may reduce medical care costs themselves; it wipes away any such savings, however, due to higher attorney involvement on the claimant’s side.
Temp Workers and the Gig Economy
In “Temporary Worker vs. Direct Hire Workers’ Comp Filings in Illinois: The Art of the Raw Deal,” Karen Yotis examines a recent report from the University of Illinois at Chicago’s School of Public Health that analyzes data flowing from the rapid growth across industries in the use of workers offered to them by temporary staffing agencies. Among the study’s findings: Temp workers are less likely to return to work following an injury and are almost three times as likely to suffer non-fatal occupational injuries than their direct hire counterparts.
Included also by Yotis is “Occupational Injuries and Third-Party Tort Claims: Effecting Change for Freelancers in the Digital Age or More Dust in the Wind?” Yotis offers commentary on a separate article written by Rutgers Law School Senior Fellow, George W. Conk, published in Rutgers Law Review, in which Conk argues that just as industrial accidents and occupational disease epidemics provided motivation to pass national health and safety laws, so also the interaction between third-party actions in the workplace and these same historical drivers should operate to preserve and expand what Conk calls “the crumbling Grand Bargain.”
I offer a counter-cyclical argument in my piece entitled, “California Grubhub Driver is Independent Contractor, Not Employee.” I discuss a February 2018 federal magistrate decision coming out of California, in which it was held that a Grubhub driver was an independent contractor, not an employee. I broaden the discussion somewhat from that, arguing that firms like Uber, Lyft and Grubhub aren’t nearly as disruptive as one might think. I point to “disruption” caused 70 years ago when “radio-dispatched” cab drivers were typically characterized as independent contractors and not employees. I argue that the workers’ compensation world weathered that storm and can easily do it again.
As we have done in past editions also, Part II offers a state-by-state rundown on important workers’ compensation legislation during the past year. Part II also contains spotlight decisions from many jurisdictions.
Important state-specific updates (in addition to the articles on Texas and New York noted above), include:
Interesting spotlight cases include:
As in years past, in this year’s edition of Workers’ Compensation Emerging Issues Analysis, we have endeavored to provide a broad range of interesting content for the workers’ compensation community. We trust you will find it educational and informative.
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