Changes to Rule 16 Effective January 1, 2018

Everyone’s favorite Rule is getting a makeover effective January 1, 2018.  There are several minor changes to the Rule that will impact prior authorization requests and ensure that a second opinion is timely obtained by the payer.  The major change that will take effect is to Rule 16-11(E) and the elimination of the option for the payer to request a hearing within the time-frames set forth in Rule 16-11(A) or 16-11(B).  The Division hopes to streamline the payer’s ability to contest prior authorization requests and ensure that a second opinion is obtained in a timely manner.  Rule 16 was previously revised and hoped to reduce overall litigation; however, the changes to the Rule contained some ambiguities and loopholes further ensuring that clarification was needed in 2018.

 

The current form of Rule 16-11(E) indicates:

Failure of the payer to timely comply in full with the requirements of section 16-11(A) or (B), shall be deemed authorization for payment of the requested treatment unless:

 

(1) A hearing is requested within the time prescribed for responding as set forth in section 16-11(A) or (B) and the requesting provider is notified accordingly.  A request for hearing shall not relieve the payer from conducting a medical review of the requested treatment, as set forth in section 16-11(B); or

 

(2) The payer has scheduled an independent medical examination (IME) within the time prescribed for responding as set forth in section 16-11(B).

 

This portion of the Rule took effect January 1, 2017 and is effective through December 31, 2017.  The Rule allows the payer to request a hearing within 7 business days of the receipt of the request for prior authorization.  However, it does not specify “when” the payer should conduct a medical records review.  It only indicates that the obligation is there for the payer to conduct one.  The Rule in subsection (2) also allows for an IME to be scheduled within 7 business days but does not delineate when the IME should take place.  For the claimant, significant delay is possible in waiting for the second opinion from the IME physician.  Theoretically, a payer could “schedule” an IME within 7 business days but have the IME take place at a much later date due to the availability of the IME physician.

 

The major changes that will be effective on New Year’s Day specifically indicate what a payer can due to contest a request for prior authorization, (if a medical records review is not possible), while taking into consideration the timeliness of obtaining the opinion for the claimant.

 

The new version of Rule 16-11(E) indicates:

Failure of the payer to timely comply in full with section 16-11(A), (B), or (C) shall be deemed authorization for payment of the requested treatment unless the payer has scheduled an independent medical examination (IME) and notified the requesting provider of the IME within the time frame prescribed for responding set forth in section 16-11(B).

 

(1) The IME must occur within 30 days, or upon first available appointment, of the prior authorization request, not to exceed 60 days absent an order extending the deadline.

(2) The IME physician must serve all parties concurrently with his or her report within 20 days of the IME.

(3) The insurer shall respond to the prior authorization request within five business days of the receipt of the IME report.

(4) If the injured worker does not attend or reschedules the IME, the payer may deny the prior authorization request pending completion of the IME.

(5) The IME shall comply with Rules 8-8 to 8-13 as applicable.

 

 

One aspect of the Rule that must be remembered by the carrier is the “first available appointment” portion of scheduling the IME.  As is usually the case, an IME physician will have a busy schedule and may not have an appointment within 30 days.  While an IME can still be scheduled up to the 60-day deadline with a physician of the carrier’s choice, this portion of the Rule must be complied with strictly so as to prevent delay in obtaining the second opinion for the claimant.

 

Another portion of the Rule that may create certain “arguments” is the duty on the IME physician and the carrier to have the report concurrently served on the parties within 20 days of the IME.  Although the Rule is silent as to what happens if the report is not concurrently served, or is late, the Rule still contains the original provision that a failure to comply is deemed authorization of the particular procedure.  The Rule appears to create an obligation on the payer to ensure that the IME physician is timely with his/her report.

 

Lastly, an ALJ always has the ultimate jurisdiction to determine whether a procedure is reasonable, necessary, and/or related to a claim since it will always involve a finding of fact.  However, there is also established case law indicating that a failure to timely comply with Rule 16 and/or a failure to timely authorize a recommended procedure from an authorized treating physician could be a continuing penalty situation in which an ALJ could find that the carrier acted unreasonably and that penalties should be awarded from the date of the request through the date of authorization.

 

It is always best to understand the particular changes to the law well in advance of when they take effect.  For any questions regarding the upcoming changes to Rule 16 and their application to a particular set of facts, please contact any of the attorneys at Lee + Kinder, LLC.

 

To File or Not to File? That is the Question

An incident takes place within the course and scope of claimant’s employment.  Claimant is confirmed to have sustained an injury but does not miss any time from work.  No permanent impairment is anticipated.  What the adjuster has is characterized as what most of us refer to as a “med-only claim.”   Throughout the course of the claim, claimant receives conservative treatment without any recommendation for surgery.  The claimant is eventually placed at MMI with no impairment.  There is no reason to challenge the claim as you believe the injury is legitimate.  You’re home free!   All you have to do is file the Final Admission of Liability (FAL), wait the statutory 30-day period, and when claimant fails to object, you can close your claim and move on to the next one.  Right?  Not exactly.

 

Most workers’ compensation claims are med-only claims.  In fact, more than two-thirds of claims in Colorado are med-only claims that are never reported to the Division.  When most carriers file a FAL due to claimant reaching MMI on a med-only claim, they do so because they are seeking finality.  Perhaps the employer wants to admit in good faith and make sure that it is noted with the Division that the claimant was taken care of and that there is no challenge to the claim.  Perhaps the carrier requires that a FAL be filed on all admitted claims when a claimant reaches MMI.  Oftentimes, a FAL is filed on a med-only claim to avoid confusion later should something happen.  Whatever the reasoning may be, the adjuster may want to think twice about filing the Final Admission of Liability on a med-only claim due to a recent Industrial Claims Appeals Office opinion and a prior Court of Appeals decision.

 

In Kazazian v. Vail Resorts, W.C. No. 4-915-969 (April 24, 2017), the Industrial Claims Appeals Office reversed the findings of an ALJ that found a med-only claim was closed because the Claimant failed to object to the FAL.  The facts of the claim were simple:  Claimant sustained an injury when she slipped and fell at work and sustained a concussion, she didn’t miss any time from work while treatment took place, and she was eventually placed at MMI without impairment by the authorized treating physician.  The Employer filed a FAL based on the authorized treating physicians’ findings and the Claimant didn’t object within the statutory 30-day requirement.  A significant time later, Claimant began to experience hearing loss. She went to an audiologist for treatment.  The Claimant suspected that her hearing loss was due to the work-related event from a couple of years prior.  The Claimant contacted the adjuster and asked that certain medical apparatuses prescribed by the audiologist be covered under the workers’ compensation claim.  The adjuster refused, citing the FAL and noting that the claimant did not timely object.  The claim was presumed closed.

 

At the hearing, the ALJ agreed with Respondents that the Claimant failed to timely object to the Final Admission and request a DIME.  However, on appeal, the Panel reversed the decision and noted that a FAL that does not admit for indemnity benefits cannot serve to “close” a claim since there was nothing triggering any statutory provisions in the Act for which reopening due to a worsening of condition or requesting a DIME can be sought.  Simply put, a Final Admission of Liability on a med-only claim raises no implications of closure.  You cannot close something that was not significant to begin with.  Citing from a Court of Appeals prior decision, “the statutory consequences of a finding of “maximum medical improvement” can apply only to injuries as to which disability indemnity is payable.”  Given this caveat in the law, the ultimate question is how does an employer or insurance carrier seek closure on a med-only claim?   The answer may be simpler than first thought.

 

By its very nature, a med-only claim is usually not an impactful claim of such severity to require reporting.  In fact, the Act carves out an exception to med-only claims making it easy for employers and carriers to deal with them without being bogged down in paperwork.  Section 8-43-101(1) states, “Every employer shall keep a record of all injuries that result in fatality to, or permanent physical impairment of, or lost time from work for the injured employee in excess of three shifts or calendar days and the contraction by an employee of an occupational disease that has been listed by the director by rule.  Within ten days after notice or knowledge that an employee has contracted such an occupational disease, or the occurrence of a permanently physically impairing injury, or lost-time injury to an employee, or immediately in the case of a fatality, the employer shall, upon forms prescribed by the division for that purpose, report said occupational disease, permanently physically impairing injury, lost-time injury, or fatality to the division. The report shall contain such information as shall be required by the director.”

 

The key portion of the statute deals with lost time and permanent impairment.  If neither of the requirements is met, nothing has to be reported.   If one of the criteria is met, the Act requires that the insurance carrier take a position on the claim within 20 days.  You may even receive a letter from the Division with big bold letters emblazoned on it indicating the insurance carrier has 20 days to file either a Notice of Contest or a General Admission or else Respondents could be sanctioned in the form of monetary penalties.   When the claimant reaches MMI in a med-only claim, most carriers file a FAL; however, it may be good practice to not file anything UNLESS you receive the letter in question from the Division.   Most med-only claims are closed within a few weeks or months.   When a claimant comes back months, or sometimes years later, to seek additional treatment, how does one know if the problem that is allegedly occurring is due to the original event?  A significant amount of time may have passed.  Claimant may be working for another Employer.  Should the adjuster just voluntarily admit and pay benefits?  Typically, the answer is no.

 

Given the caveat in the law that is becoming commonplace among the courts, it is recommended not to file anything in response to a treating physicians’ placement of a claimant at MMI.  This is because the carrier can always challenge the claim on causation grounds later down the road should the claimant return and want to seek additional treatment or claim that indemnity is owed.  Recall that payment of medical benefits is neither an admission nor a denial under the Act.  Even if the Respondents pay for treatment and characterize a claim as a med-only claim for purposes of payment, if no pleadings are ever filed with the Division, Respondents retain the right to file a Notice of Contest should a claimant return in the future seeking additional benefits.  At that time, Respondents can further investigate the causation of the claimant’s ongoing complaints either through a medical records review, IME, or other means such as surveillance.  Oftentimes, the mere passage of time and questioning of the claimant will give rise to answers which would allow the adjuster to deny the claim outright, even though at first the claim was payable in good faith.  The overall thought is that it is much easier to challenge causation and be cautious with a Notice of Contest for further investigation than it is to go back in time and withdraw a previously filed admission, regardless of the type of admission that it is.

 

If you have any questions regarding what next steps to take when dealing with med-only claims, please contact us.   If you get a phone call from a claimant wanting more benefits from a claim you thought was closed, please contact any of the attorneys at our firm.  We will be more than happy to chat about the facts of the particular case and devise the best strategy which will hopefully avoid the reopening of a “closed” claim.

Division Proposed Changes to W.C.R.P. Rule 17 Exhibit 5 – Cumulative Trauma Disorders

W.C.R.P. Rule 17 contains the Medical Treatment Guidelines promulgated by the Division of Workers’ Compensation. Several corresponding exhibits discuss the applicable medical criteria regarding injuries to different body parts and recommended treatment. Exhibit 5 addresses cumulative trauma disorders and the causation matrices involved in guiding physicians to assess whether an occupational disease may be work related. The Division has proposed updates to the matrices to specifically address certain scenarios facing injured workers and the applicable statutes under the Workers’ Compensation Act. Also, there have been additional journals, studies, and treatises better addressing the anatomy behind some of the cumulative trauma disorders and causation. The following will help outline some of the updates to the Guidelines proposed by the Division.

 

The current version of the cumulative trauma Medical Treatment Guidelines were revised on September 16, 2010 and became effective on October 30, 2010. These Guidelines helped provide a framework to better address causation and clarified primary and secondary risk factors associated with some of the disorders. Physicians could now have a somewhat clear roadmap to address primary and secondary work factors in the workplace and narrow down whether an injured workers’ alleged condition was causally related to their job duties. Among the issues that were clarified were tasks such as keyboarding, mousing, the use of hand tools, and the repetitive task cycles and durations of each of activities in which an injured worker may be exposed to in the workplace.

 

When assessing causation, the Division’s Guidelines indicate the following:

Cumulative trauma related conditions (CTC) of the upper extremity comprise a heterogeneous group of diagnoses which include numerous specific clinical entities including disorders of the muscles, tendons and tendon sheaths, nerves, joints and neurovascular structures. The terms “cumulative trauma disorder”, “repetitive motion syndrome”, “repetitive strain injury”, “myofascial pain” and other similar nomenclatures are umbrella terms that are not acceptable, specific diagnoses. The health care provider must provide specific diagnoses in order to appropriately educate, evaluate, and treat the patient. Examples include: de Quervain’s disease, cubital tunnel syndrome, and lateral/medial epicondylitis (epicondylalgia).

Many patients present with more than one diagnosis, which requires a thorough upper extremity and cervical evaluation by the health care provider. Furthermore, there must be a causal relationship between work activities and the diagnosis (See, Section D.3 Initial Diagnostic Procedures, Medical Causation Assessment). The mere presence of a diagnosis that may be associated with cumulative trauma does not presume work-relatedness unless the appropriate work exposure is present. Mechanisms of injury for the development of cumulative trauma related conditions have been controversial. However, repetitive awkward posture, force, vibration, cold exposure, and combinations thereof are generally accepted as occupational risk factors for the development of cumulative trauma related conditions. Evaluation of cumulative trauma related conditions require an integrated approach that may include ergonomics assessment, clinical assessment, past medical history and psychosocial evaluation on a case-by-case basis.

The normal working age population may often have non-specific pain complaints that require minimum treatment and may be considered part of the normal aging process. When pain continues or a complete history indicates a potential for other diagnoses, a medical workup may be necessary to screen for other diseases. However, in cases where there is no specific diagnosis and corresponding work related etiology, the work-up should generally be performed outside of the workers’ compensation system.

When applying the algorithm in Exhibit 5, the first step requires the physician to establish the diagnosis for the patient. Once completed, the second step requires the assessing physician to obtain the injured workers’ job duties and clearly define the specific tasks involved. The physician may require a jobsite evaluation to determine each task. The third step focusses on each specific job duty and whether it classifies as a primary or secondary risk factor. Primary and secondary risk factors both involve measuring force and repetition over different periods of time.

 

Currently, if neither a primary or secondary risk factor are present in the job duties of the injured worker, the condition is presumed to not be work related. If there are one or more identifiable primary risk factors, and the risk factor is physiologically related to the diagnosis, then the condition may be work related. If the primary risk factor is not physiologically related with no secondary risk factors, then again the condition is likely not work related. Once a physician arrives at identifying secondary risk factors, the fourth step in the algorithm goes a bit further and requires the physician to identify diagnostic-based risk factor tables to narrow down causation. There are several non-work related factors in assessing causation, such as the patients’ age, gender, whether the patient uses tobacco products, etc., that help in determining a non-work related cause.

 

Most of the algorithm and causation criteria remain unchanged in the Division’s latest proposals. Only certain portions have been revised to take into consideration particular nuances in the primary and secondary risk factors. One of the proposed changes to the Guidelines indicates that in the case of an aggravation or exacerbation of a pre-existing condition, the physician will now need to make an individualized causation decision based on the presence of other accompanying conditions. The physician must take each patient on a case by case basis.

 

Another proposed change is the increased amount of force but reduced task cycles and durations as primary risk factors. Force and repetition, coupled with duration, now require six hours of the use of two pounds of pinch force or ten pounds hand force 3 times or more per minute. The secondary risk factors have been reduced from 4 hours to 3 with the same two pounds of pinch force or ten pounds of hand force 3 times or more per minute. The physicians will have to apply the same steps in the algorithm to reach their conclusions; however, the specific criteria for primary and secondary risk factors have been updated based on the latest studies and literature. These are not the only changes to the Guidelines. Certain other updates have been made depending on the specific primary or secondary risk factor being addressed, (i.e. awkward posture, computer work, the use of handheld vibratory power tools, and cold working environments).

 

When a claimant alleges a particular occupational disease in which Exhibit 5 of the Medical Treatment Guidelines will be applied to determine causation, it is best to seek an Independent Medical Examination with a physician knowledgeable in applying the causation matrix. As part of the investigation of the claim, the IME physician should also be provided with a specific job description or worksite evaluation to properly identify each of the job duties that the injured worker performs. Most treating physicians will only obtain direct knowledge of the injured workers’ job duties directly from the injured worker. This oftentimes provides a skewed perception of the specific job duties, which in turn skews the overall analysis by the physician. The treating physician may find a claim to be work related when it should not be if the algorithm was properly applied.

 

If the IME physician has the specific job description/ergonomics assessment, coupled with medical records to establish the proper diagnosis, the physician will be in a better position to properly apply the causation matrices and provide a solid framework for reaching a causation determination. The IME physicians’ report can then be sent to the treating physician to properly assess causation and provide treatment to the injured worker or, in some cases, prevent treatment from being provided to the injured worker when it is not work-related, thus saving on medical costs.

 

The proposed changes to Rule 17 are not yet in effect. These are proposed changes but no rule making hearing has been announced. We suggest checking the Division website periodically. Once the changes do go into effect, we will make an announcement and let you know what changes were approved.

 

For additional questions regarding updates to the Medical Treatment Guidelines or recommendations when confronted with a particular issue on causation, please contact the attorneys at Lee + Kinder LLC.

Investigation of Outstanding Medicaid Liens in Workers’ Compensation Claims

The Colorado Department of Health Care Policy and Financing, through its Medicaid program, is responsible hcpffor collection of outstanding liens for the state.   This department is in charge of disbursement of state funds to indigent citizens in need of medical benefits.  Oftentimes, a claimant will pursue medical benefits through the department if they qualify.   This may be true even when a claimant has a current workers’ compensation claim on file with the Division of Labor.  Qualification for a particular program, through the state funded Medicaid partnerships, involves several criteria.  If a citizen qualifies, benefits may be paid regardless of the current status of a workers’ compensation claim.   The Medicaid department will assert its lien, (referred to as a “recovery right”), against the claimant and the workers’ compensation claim.

A lien usually arises at one of two points in the workers’ compensation litigation.  The first such instance occurs when a claim is denied by the carrier and the claimant chooses to pursue medical benefits through the applicable Medicaid programs.   These claims usually involve substantial forms of medical treatment, (i.e. surgeries), in which time is of the essence and a claimant cannot wait for resolution of compensability and causation issues in their workers’ compensation claims.  The claimant may choose to obtain the surgery through the authorized treating physicians or through their own personal care physician.  Should the claim be found compensable by an ALJ, it is important to distinguish between the benefits provided and through which physicians the claimant received treatment.   Regardless of the legal arguments to be made, Medicaid will assert its right of recovery against the benefits paid and will await resolution of the claim before doing so.

The second such instance occurs when a claimant has received medical benefits through the state funded Medicaid program and the treating physician finds a particular treatment to either be related to the claim, (or not related to the claim). The benefits are disputed through the workers’ compensation process, and the claimant obtains treatment without waiting for resolution of the workers’ compensation issues.   In this example, the opinions from the treating physicians will be important in determining liability for the outstanding lien.  If a treating physician deems the medical benefits to be related to the claim, and the claim is resolved through a settlement or other means, the carrier will be liable for payment of the lien.   Recovery of the lien cannot be shifted by the parties in the workers’ compensation claim.  However, if the treating physicians deemed the treatment to be non-work related, the carrier may be able to dismiss any causes of action by providing the opinions of the physicians to the proper investigative authorities within the department.

 

Legislative Authority

Colorado’s Medicaid programs derive their authority from one main portion of section 25.5 of the Department of Health Care Policy and Financing Act.  Section 25.5-4-301(5)(a), C.R.S. states, “When the state department has furnished medical assistance to or on behalf of a recipient pursuant to the provisions of this article, and articles 5 and 6 of this title, for which a third party is liable, the state department shall have an automatic statutory lien for all such medical assistance. The state department’s lien shall be against any judgment, award, or settlement in a suit or claim against such third party and shall be in an amount that shall be the fullest extent allowed by federal law as applicable in this state, but not to exceed the amount of the medical assistance provided.”

Additionally, section 25.5-4-301, C.R.S. states, “When the applicant or recipient, or his or her guardian, executor, administrator, or other appropriate representative, brings an action or asserts a claim against any third party, such person shall give to the state department written notice of the action or claim by personal service or certified mail within fifteen days after filing the action or asserting the claim. Failure to comply with this subsection (6) shall make the recipient, legal guardian, executor, administrator, attorney, or other representative liable for the entire amount of medical assistance furnished to or on behalf of the recipient for the injuries that gave rise to the action or claim. The state department may, after thirty days’ written notice to such person, enforce its rights under subsection (5) of this section and this subsection (6) in the district court of the city and county of Denver; except that liability of a person other than the recipient shall exist only if such person had knowledge that the recipient had received medical assistance or if excusable neglect is found by the court. The court shall award the state department its costs and attorney fees incurred in the prosecution of any such action.”   (Emphasis added)

Lastly, section 25.5-4-301(5)(b) states, “No judgment, award, or settlement in any action or claim by a recipient to recover damages for injuries, where the state department has a lien, shall be satisfied without first satisfying the state department’s lien. Failure by any party to the judgment, award, or settlement to comply with this section shall make each such party liable for the full amount of medical assistance furnished to or on behalf of the recipient for the injuries that are the subject of the judgment, award, or settlement.”

These three portions of the statute are important to remember prior to resolving any workers’ compensation claim.  Specifically, if the carrier or the insured has any knowledge that Medicaid paid for any potential treatment in connection with the workers’ compensation claim, the carrier must investigate and contact the Department of Health Care Policy and Financing to inquire about any potential liens.  The duty to investigate is not on Medicaid or the State of Colorado, but rather the duty rests with each party to the workers’ compensation claim.   Failure to notify Medicaid prior to resolution of the workers’ compensation claims will cause the outstanding balance to become due and owing in full unless a separate argument can be made regarding the medical benefits provided to the claimant recipient.  This is the case regardless of any language placed into any agreements, stipulations, settlements, or the like that are agreed upon between the parties.

 

Recommendations

The carrier and the Employer, (either through counsel or individually), should always investigate whether any Medicaid liens exist at the state level.   Outstanding Medicaid liens differ from other liens due to the duty imposed on the carrier through statute.  Failure to investigate any outstanding liens could lead to potential reopening of claims long after they have been resolved.  Investigation could happen in a number of ways.  The simplest way involves contacting the department in writing and providing the identifying information of the claimant to search for any liens.  The department will usually respond within a few days notifying the carrier of any issues.    However, this manner may be problematic for adjusters especially in light of the volume of claims at any given time.  If counsel is assigned, the inquiry can be made by email or through general discovery pending on a litigated claim.  Discovery responses from the claimant can reveal receipt of any benefits through Medicaid or otherwise.

For more information about specific Medicaid issues on any workers’ compensation claims and recovery of liens, please feel free to contact us.   References about the Colorado Medicaid programs can be found here.