legaLKonnection Firm Newsletter – April 2016

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Thank you for taking the time to read our Firm newsletter. Our newsletter provides a monthly update on recent developments within our Firm, as well as in the insurance defense community.

In the News

extranews_red-webRT2COLORADO BALLOT PROPOSED AMENDMENT #69 – POTENTIAL IMPACT ON WORKERS’ COMPENSATION MEDICAL BENEFITS

Section 1332 of the Affordable Care Act (“ACA” or colloquially known as “ObamaCare”) allows a State to obtain a waiver from the ACA, if the State sets up a system that provides the same level of coverage. Amendment 69 proposes creating a single-payer system for health care in Colorado known as ColoradoCare.

Initiative 20 got on the 2016 Ballot as Amendment 69. It was authored by Irene Aguilar, M.D. who is a Democratic member of the Colorado Senate and a primary care physician. A similar attempt to migrate a state to a single payer system was tried recently in Vermont. Vermont’s Bill went through the State House and Senate. It was signed by the Governor in May 2011. In December 2014, Vermont’s Governor retracted his backing of the single payer program due to a lack of clear funding and the negative effect of the taxes on businesses. Vermont’s single payer healthcare law, although passed and enacted, has essentially been abandoned. Similar to Amendment 69, Vermont’s Act 48 purported to integrate workers’ compensation medical benefits into a universal healthcare system.

ColoradoCare would be funded by a 6.67% payroll tax upon employers and a 3.33% tax on employee income. Other income sources would also be subject to the premium tax including rents, interest, dividends, capital gains, pensions and annuities.

To read more about the implications of Amendment #69, please click here for the full article.

 

2015 ANNUAL SURVEY OF COLORADO LAW

On a brief note, Of Counsel Joseph Gren and Associates Matt Boatwright and Jessica Melson contributed the Workers’ Compensation Law section of the 2015 Annual Survey of Colorado Law. The Annual Survey contains an analysis and summary of the published appellate court decisions over the previous year and an evaluation of the impact that each decision may have upon the fields of law that each involves. This year’s survey dealt with notable cases involving expansion of the scope of the going to and coming from rule in assessing the compensability of a claim, the use of the “regular business test” in determining whether an employer is a statutory employer under the Act, and public disclosure of remuneration given to Administrative Law Judges in Workers’ Compensation. The survey is generally used by attorneys to provide an overview of recent developments in Colorado law.


 

Victory Lap

Member Joshua Brown successfully argued at the Colorado Court of Appeals in favor of overturning an ALJ’s reopening of a full and final settlement agreement in Victor England v. AmeriGas Propane and Indemnity Insurance Company of North America. In 2012 the injured worker suffered an injury to his right shoulder after slipping on ice. After two shoulder surgeries but prior to placement at maximum medical improvement, the parties in 2013 entered into a Full and Final Settlement Agreement for $35,000. The agreement used was the mandated contract required by the Division of Workers’ Compensation. Several months after the entry into the settlement agreement, the injured worker’s physician discovered a previously unknown fracture in the scapula. As a result, the injured worker filed a Petition to Reopen his settlement arguing that (1) a mutual mistake of material fact existed at the time of settlement; and (2) contending that he would not have entered into the settlement agreement if he knew the fracture existed. The ALJ agreed with the injured worker’s arguments and reopened the claim awarding medical benefits, two years of back TTD benefits and ongoing TTD benefits. The Industrial Claim Appeals Office affirmed the ALJ’s decision. However, the Colorado Court of Appeals reversed the ALJ’s decision accepting Mr. Brown’s persuasive argument that the mandated settlement agreement must be enforced as written. Particularly, the Court of Appeals determined that in the agreement, injured workers specifically waive their rights to future benefits for both known and unknown injuries that may result from the work accident. Consequently, the Court of Appeals agreed with Mr. Brown that such a waiver precluded any injured worker from trying to reopen their settlement agreement based on unknown conditions existing at the time of settlement.

Member Joshua Brown and Associate James Payonk successfully defended against a claim for permanent total disability benefits in Janine Scafide v. SkyWest Airlines, Inc. and Indemnity Insurance Company of North America, W.C. No. 4-840-879-03. Claimant was seeking permanent total disability benefits, claiming she was unable to earn wages in any capacity following an injury she suffered to her hip in 2010 which resulted in her being unable to lift more than five pounds and incapable of performing activity of any kind for more than 20 minutes. Mr. Brown introduced video surveillance footage showing Claimant running errands for more than 2 hours, lifting a fifty-pound bag of ice melt, and shoveling snow. Mr. Brown also introduced testimony from Dr. Douglas Scott who opined that Claimant’s permanent work restrictions should be modified to allow for more activity, as well as testimony from vocational evaluator Katie Montoya that Claimant was capable of earning wages in a number of different positions. The ALJ found that Claimant and her vocational evaluator lacked credibility, and instead credited the testimony of Dr. Scott and Ms. Montoya in denying Claimant’s claim for permanent total disability benefit.

 

Member Tiffany Kinder and Associate Daniel Mowrey successfully withdrew Respondents’ admission of liability in Jeanne Severson v. Waste Management of Colorado, Inc. and Indemnity Ins. Co. of NA., W.C. No. 4-966-806. This was an admitted claim for a right hip injury which was initially referred to challenge a request for authorization of a total hip replacement. Through investigation it was determined that the entire claim was questionable. Ms. Kinder proceeded to hearing on the arguments that the surgery was not reasonable and necessary, and that Respondents should be allowed to withdraw the General Admission of Liability. Ms. Kinder introduced three employer witnesses who contradicted Claimant’s version of the mechanism of injury. Relying largely on the credibility of employer lay witnesses, Judge Nemechek agreed with Respondents and granted their request to withdraw the General Admission of Liability.

 

Of Counsel Joseph Gren and Associate Daniel Mowrey received a favorable order denying maintenance medical treatment in Jennifer Barnes v. Rural Metro Corporation and ACE America Insurance, W.C. No. 4-936-966. Claimant was seeking SI joint injections with sciatic nerve blocks for maintenance medical treatment for her admitted right knee injury. Mr. Gren introduced testimony from Dr. Paz who maintained that there had not been a diagnosis of a right lower extremity peripheral nerve injury, a lumbar radiculopathy, a sympathetic mediated pain condition or CRPS. Therefore, Claimant’s right lower extremity symptoms were not causally related to her December 13, 2013 industrial injury. Mr. Gren also introduced a medical report from the DIME physician, Dr. Ginsburg, who summarized that Claimant only injured her right knee and no additional ratings were warranted. The ALJ found reports and testimony of Drs. Ginsburg and Paz to be persuasive and more credible than Claimant’s testimony and issued an Order denying the request for medical maintenance benefits.

 


 

Sexual Orientation Discrimination: EEOC Initiates its Next Title VII Challenge

A new era of discrimination lawsuits is upon employers nationwide. Last month, the U.S. Equal Employment Opportunity Commission (“EEOC”) filed its first lawsuits alleging sexual orientation discrimination under Title VII against employers in Pennsylvania and Maryland. The lawsuits are the latest step by the Commission to confirm its view that “sex” discrimination under Title VII encompasses discrimination based on sexual orientation. As with most discrimination cases filed by the EEOC, it seeks compensatory and punitive damages, as well as injunctive relief in both lawsuits.

Click here to continue reading the article.

 


Cases You Should Know

Paying for Cars, Trucks, Buses: In Morrison v. Rock Electric, Inc. and Pinnacol Assurance, W.C. No. 4-939-901 (March 9, 2016), the ICAO affirmed the ALJ’s denial of compensability of a claim for injuries suffered pursuant to an auto accident. Claimant, an electrician, deviated from his typical job route to pick up his apprentice, who was not required to be at the jobsite by the employer. Claimant was involved in an accident along the way. The ALJ found that Claimant’s transportation of his apprentice to and from work was not contemplated by the employment contract and did not confer a benefit to the employer, and that Claimant therefore was not in the course and scope of his employment at the time of the accident. Upon appeal, ICAO found that the ALJ’s findings were supported by substantial evidence. Moral of the story: If a claimant deviates from the course of their typical employment duties, for a reason that doesn’t give any benefit to the employer and wasn’t part of the employment contract, they are not in the course and scope of their employment if they get injured.

There is a Line for Every Shot: In Oldani v. Hartford Financial Services and Hartford Fire Insurance Company, W. C. No. 4-614-319 (March 9, 2016), the ICAO upheld an Order by the ALJ denying Claimant’s request for Botox injection and simultaneously denied an appeal by Respondents concerning the ALJ’s failure to address the issue of denial of all further medical care. After Claimant was placed at MMI, the parties reached a full and final settlement whereby Respondents agreed to continue to pay for all reasonable and necessary care related to her carpal tunnel syndrome. Subsequent medical opinion indicated that Claimant had developed a new condition unrelated to the original work injury and the ALJ found that Botox injections were being administered for this new condition and were therefore unrelated. Based upon this opinion, Respondents sought to deny further maintenance care but the ALJ did not address this issue because it was not endorsed as an issue for hearing. ICAO agreed, but indicated that Respondents could still contest further benefits on an individual basis or in their entirety with a new hearing proceeding. Moral of the story: Respondents can always contest the need for treatment for each and every medical condition a claimant asserts is related to the claim, and the claimant has to prove that the requested treatment is reasonable, necessary, and causally related.

Falling into a Deep Well of Penalties: ICAO upheld a fine imposed upon the employer in the amount of $841,200.00 for failure to maintain workers’ compensation insurance in Division of Workers’ Compensation v. Demi Hospitality, LLC, FEIN 84-1545878 (ICAO January 20, 2016). The fine was imposed pursuant to statute and court Rule for the employer’s second instance of not maintaining workers’ compensation insurance, for periods from August 10, 2006, through June 8, 2007, and September 12, 2010, through July 9, 2014. The court found that three factors must be considered when determining a fine to be imposed under the circumstances, which were: (1) the degree of reprehensibility of the misconduct; (2) the disparity between the harm or potential harm suffered and the fine to be assessed; and (3) the difference between the fine imposed and the penalties authorized or imposed in comparable cases. While upholding the fine, the court reasoned that the risk of an uninsured loss occurring increased with the amount of time the employer was without insurance, that the motel operated by the employer employed individuals in more than a sedentary capacity, that the employer could not solely rely on their insurance broker to maintain coverage and that the Rules and statutes properly define criteria for imposing a fine. Moral of the story: Employers are always responsible for ensuring they have workers’ compensation insurance coverage in place.

The Lawn Boys and the Vacuum Cleaner Solo Worker: In Aaron Hopkins v. Northwest Distribution, Inc. and Travelers Indemnity Company of Connecticut, W.C. 4-980-185-01 (ICAO February 22, 2016), Respondents argued that Claimant’s injuries were not compensable as Claimant was an independent contractor and the injuries resulted from horseplay. Claimant, employed as a door-to-door vacuum salesperson, was injured when he tripped and fell in front of the moving work van after grabbing the hat of another salesperson. The court found that Claimant was not an independent contractor because the employer, “paid the claimant individually, provided significant training, specified the time the claimant was to arrive at work and the number of days and hours to be worked, the type of clothing the claimant was to wear, the location at which he was to perform the job and specified the sales had to be made exclusively through home demonstrations and by following the nine point sales instructions developed by the employer.” The court also found that Claimant was not engaged in a substantial deviation from his employment at the time he was injured because horseplay, such as routine joking and pranks among sales team members which included throwing snowballs, pushing others into bushes, performing pull ups on trees and push-ups in the middle of the street were regular activities engaged in by salespeople and team leads would also engage in these activities. Moral of the story: Proving independent contractor status is difficult and allowing horseplay on-the-job means that injuries as a result thereof will be found compensable.

This Has All Been Wonderful but Now I’m on the Way to my PCP: In Junior Loy v. Dillion Companies and Self-Insured, W.C. 4-972-625-03 (ICAO February 19, 2016), the court addressed when a medical provider becomes an authorized treating physician (ATP). Following his injury Claimant was provided with a designated provider list, and upon contacting one of the providers thereon was informed that the doctor was not currently accepting new workers’ compensation patients. Claimant then attended an appointment with the other provider on the list, but was subsequently informed by that doctor that his claim had been denied and no further treatment could be rendered, but that he should follow up with his personal physician. The court found that this constituted a referral to Claimant’s personal physician, therefore making Claimant’s personal physician an ATP and making Respondent liable for all care provided by Claimant’s personal physician and any treatment obtained via the referral chain from Claimant’s personal physician. Moral of the story: The primary ATP is vested with great power when it comes to their referrals for medical care.

No Man, in No Men’s Land: In Youngquist Brothers v. Industrial Claim Appeals Office and Miner, (Colo. App. 2016), the Colorado Court of Appeals addressed when Colorado has jurisdiction to award benefits for an out-of-state work-related injury. The Respondent was a North Dakota employer with no contacts in the state of Colorado aside from the hiring of Colorado residents. The employer hired a Colorado resident who was injured in North Dakota within days of being hired. Section 8-41-204, C.R.S. sets fourth that Colorado has jurisdiction to award benefits for an out-of-state work-related injury if an employee was (1) hired or regularly employed in Colorado and (2) injured within six months of leaving Colorado. The Court noted that this provision does not require an employer hiring a Colorado employee to have any other contacts with Colorado. Moral of the story: If an Employer regularly hires Colorado residents, the out of state employer who may not have requested workers’ compensation insurance will be liable for injuries under the Colorado Act.

Maybe I’m Entitled to TTD After Termination Taboot, Taboot: In Archuletta v. Industrial Claim Appeals Office and Concrete Frame Associates, (March 3, 2016)(nsfop), the Colorado Court of Appeals upheld an ALJ’s finding that Claimant was entitled to TTD benefits as his wage loss was directly attributable to his industrial injury. Claimant was placed on modified duty work restrictions and continued to work following the injury. Claimant was placed at MMI and released back to full duty by his physician. Claimant was laid off due to the fact that his employer could not accommodate Claimant’s restrictions. Claimant was later removed from MMI by a DIME and awarded TTD benefits by an ALJ. Respondents relied on Section 8-42-105(3)(c) in that TTD benefits must cease as Claimant had been released to full duty work by his attending physician. was found not to apply in this claim as the statute applies to the termination of benefits and Claimant’s benefits had never started. The Court of Appeals, held that Section 8-42-105(3)(c) did not apply to Claimant’s claim because the statute could only terminate benefits that had already commenced and consequently could only be applied prospectively. Moral of the story: The statute terminating TTD benefits applies only if the benefits have begun.

COLORADO BALLOT PROPOSED AMENDMENT #69 – POTENTIAL IMPACT ON WORKERS’ COMPENSATION MEDICAL BENEFITS

Amendment 69 Colorado

Colorado State Health Care Initiative 20 (Amendment 69)

 
Background

Initiative 20 got on the 2016 Ballot as Amendment 69.  It was authored by Irene Aguilar, M.D. who is a Democratic member of the Colorado Senate and a primary care physician.  A similar attempt to migrate a state to a single payer system was tried recently in Vermont.  Vermont’s Bill went through the State House and Senate.  It was signed by the Governor in May 2011.  In December 2014, Vermont’s Governor retracted his backing of the single payer program due to a lack of clear funding and the negative effect of the taxes on businesses.  Vermont’s single payer healthcare law, although passed and enacted, has essentially been abandoned.  Similar to Amendment 69, Vermont’s Act 48 purported to integrate workers’ compensation medical benefits into a universal healthcare system.

 

Overview

 Section 1332 of the Affordable Care Act (ACA) allows a state to obtain a waiver from the ACA, if the state sets up a system that provides the same level of coverage.  Amendment 69 creates a single-payer system for health care in Colorado known as ColoradoCare.

 

Funding

ColoradoCare would be funded by a 6.67% payroll tax upon employers and a 3.33% tax on employee income.  Other income sources would also be subject to the premium tax including rents, interest, dividends, capital gains, pensions and annuities.  Certain income would not be subject to the premium tax.  Maintenance and unemployment are not subject to the tax.  In addition, the first $33,000 of Social Security or pension payments are not subject to the premium tax and the same is true for the first $60,000 for those filing jointly.  Those who are self-employed or whose income is from investments would be subject to a flat 10% of that income as a premium tax.  ColoradoCare would not be subject to TABOR (Colorado’s Taxpayer Bill of Rights) limits on new tax increases.  The premium tax would be deductible from income taxes.  The premium taxes are capped at $350,000 for individuals and $450,000 for those filing jointly.  Increased funding, if necessary, would come from members.  A “member” is someone who is 18 years old and has lived in Colorado for a continuous year.

 

Amendment 69 purports to raise 21 billion dollars by 2019.  For comparison, the 2016 total state budget is approximately 25 billion dollars.  The Amendment would nearly double State tax collection.  The projected savings to businesses and individual is supposed to come from the removed need for employer and individual contributions to private plans, reduced administrative costs from private plans and general fraud prevention.  Figures offered in support of Amendment 69 place current premium estimates for private health plans at a monthly contribution of $278 (employer) and $139 (employee) for an employee making $50,000 a year.  These figures go up to $556 and $278 monthly for an individual making $100,000 a year.  There are other ancillary purported savings from various sources based on no required co-pays or deductibles.

 

Governed

ColoradoCare would be operated by an interim board of 15 members appointed by the Governor and legislative leaders.  This board would then develop an election process to create a new Board of Trustees and to formulate rules to ensure the board’s operation.  It would also apply for the exemption from the ACA.

The interim Board would be replaced within three years with an elected 21-member Board of Trustees.  The trustees would be elected from seven state districts of comparable size.  The trustees would be charged with establishing purchasing authority for medications and medical equipment and with establishing an ombudsman’s office for beneficiaries and providers.

 

Coverage

ColoradoCare would provide a comprehensive benefit package.  It includes emergency and trauma services; primary and specialty care; hospitalization; prescription drugs; medical equipment, mental health and substance use services; chronic disease management; rehabilitative and habilitative services and devices; pediatric care, including oral, vision, and hearing services; laboratory services; maturity and newborn care; and palliative and end of life care.  There are no deductibles, or co-payments and any potential co-pay requirements would have to be approved by the Board of Trustees.  The “member” would choose a primary care provider.  A beneficiary traveling or living temporarily out of state is still covered.

ColoradoCare would serve as a supplement to Medicare.  For any other healthcare plan in effect ColoradoCare would be a secondary payer.

 

Delivery of Services

ColoradoCare will assume payment of health services.  The interim Board and the Board of Trustees are charged with implementing payment and billing systems, handling quality and value concerns and any cost saving mechanisms.

 

AMENDMENT 69 AND INTEGRATION OF WORKERS’ COMPENSATION MEDICAL COVERAGE

Amendment 69 integrates workers’ compensation medical coverage into ColoradoCare.  ColoradoCare offers this as an overall cost savings, citing statistical data affixing a 59% medical cost component for benefits paid under the workers’ compensation system.

 

General Considerations

Colorado Workers’ Compensation

Under Colorado workers’ compensation laws, an employer must obtain coverage for workers’ compensation insurance by becoming self-insured, obtaining coverage through a commercial insurer, or through the quasi-governmental entity, residual market insurer, Pinnacol Assurance.  Medical benefits are part of the benefit package provided under Colorado’s workers’ compensation system. Medical benefits are the most expensive component of the benefit package, accounting for over 50% of the total workers’ compensation costs to employers and carriers.  Workers’ compensation is an exclusive remedy to an injured worker.  The injured worker cannot pursue the case in District Court against an employer so long as the employer has complied with the Colorado Workers’ Compensation Act.

 

Medical Care in Workers’ Compensation vs. ColoradoCare

There is no coordination between the proposed Amendment 69 and the Colorado Workers’ Compensation Act.  ColoradoCare simply steps in as a payer for work injuries.  By the same token, there is no coordination between recovery for injuries from a third party.  ColoradoCare simply has recovery rights against third parties, presumably for amounts paid as a result of injury.  Therefore, workers’ compensation third party recovery rights remain intact for benefits not covered under ColoradoCare.

Medical benefits under workers’ compensation are different than those provided under ordinary health insurance.  Workers’ compensation is an event-based coverage, meaning that coverage is dependent on the event of a work injury and extends first so long as treatment continues to cure and relieve the effects of the injury to a point that treatment plateaus.  Medical coverage is then extended for modalities to maintain claimant’s level of function.  The goal of medical treatment under workers’ compensation is to get the worker back to work as quickly as possible and at an optimal level of function. The injured worker has no payment obligation for medical care.  Under the circumstances, the employer and carrier are the primary stakeholders in the workers’ compensation system.  Colorado allows the employer to maintain a degree of medical management of workers’ compensation claims that includes selecting the authorized treating physician in the first instance.  Barring a change of physician that same physician serves as a gatekeeper, making necessary referrals and medically managing the claim to a point of maximum medical improvement and, in certain circumstances, determining a medical impairment for claimant’s injury or condition.  Providers under the Colorado Worker’s Compensation Act generally follow medical treatment guidelines established for most injuries or conditions and are reimbursed under a medical fee schedule aligned with the services provided.

Health insurance is treatment based and extends for the length of the coverage without regard to the cause of the injury, or condition. Health insurance coverage is significantly less structured in approach to care and providers are reimbursed under different systems and rates. Further, there is less emphasis on treatment directed at an individual’s level of function.

Medical providers under the workers’ compensation system generally have accreditation as level I or level II.  This training emphasizes treatment for functional gain and returning the injured worker to work within safe parameters.  Many of these medical care providers are experts in occupational medicine and\or are board certified in physical medicine and rehabilitation.  These providers have a working familiarity with medical treatment guidelines that are designed to foster the goals of treatment directed at functional improvement and returning an injured worker back to work.  Further, only level II providers can provide a medical impairment rating for work injury or occupational disease.  Treatment by a non-level II primary care physician would require a referral to a level II physician to provide a medical impairment rating.  Given the circumstances, integrating medical care under ColoradoCare, with less emphasis on functional improvement and returning an injured worker back to work, will likely extend and increase the cost of this care.

The cost and duration of medical care is also directly tied to increased indemnity cost per claim.  Without emphasis on returning to work within restrictions potential entitlement to wage replacement benefits will increase. In addition, an injured worker’s eligibility for indemnity benefits is capped depending on the amount of medical impairment assigned for an injury or occupational disease.  To the extent an injured worker uses amounts under the applicable cap as wage replacement benefits, it may prevent the injured worker from receiving a full award of medical impairment benefits.  It is likely that incorporating medical care for work injuries or occupational diseases under ColoradoCare will have the indirect effect of creating increased exposure for indemnity benefits on these claims.  There is evidence of this from Vermont where private carriers were either unable, or unwilling, to offer an insurance product to cover indemnity benefits for Vermont’s workers’ compensation system without having medical benefits controlled under that system.

 

Safety Incentives in Workers’ Compensation vs. ColoradoCare

Workers’ compensation insurance premiums are a function of gross wages paid under specific job classifications and factored by an experience modifier.  Therefore, there is strong incentive for employers to maintain a safe workplace, reducing work injuries and occupational diseases.  This, in turn, reduces premiums by lowering the experience modifier.  Integration of workers’ compensation medical benefits into a universal health care system reduces or eliminates employer incentive to ensure a safe workplace as there is no financial ramification tied to a higher experience modifier.

 

Indemnity Obligations Under the Colorado Workers’ Compensation Act

Notwithstanding Amendment 69’s integration of medical benefits into ColoradoCare, other benefits under the Colorado Workers’ Compensation Act are still required to be covered by employers.  These benefits include wage replacement, medical impairment, disfigurement and dependent benefits. ColoradoCare does not integrate or eliminate these other benefits.  Therefore, passage of Amendment 69 would require a mixed model benefit package, with publicly funded medical benefits provided under a different regulatory structure combined with privately funded benefits through a different insurance product.  In an official report to the Vermont Legislature from Vermont’s Director of Healthcare Reform dated January 15, 2016, this type of mixed model is discussed.  Private carriers in Vermont determined that private indemnity coverage required a new insurance product to cover indemnity portions of workers’ compensation claims.  Private carriers operating in Vermont were not interested in offering this product due to the connection between the lost ability to manage the medical component of the work injury or occupational disease and the resulting indemnity obligations.  Removing medical management of the claim would likely increase the amount of indemnity owed on that same claim.

 

Legal Issues Regarding Integration of Workers’ Compensation Medical Benefits into ColoradoCare

 

HIPPA

In general, the HIPPA privacy rules do not apply to workers’ compensation insurers, administrative providers or employers.  These entities are allowed access to otherwise private records to coordinate medical care and to deal with work-related issues, like restrictions and return to work options.  In Colorado, there are close connections between medical care providers, employers and workers’ compensation carriers and/or self-insured employers.  The employer selects the authorized providers for work injuries in the first instance and forms are generated for return to work options.  In addition, there are specific provisions for a change in medical care provider and authorization to treat for a work injury or occupational disease.  Amendment 69 does not address these matters.  Presumably, the entities involved in workers’ compensation matters would remain immune from HIPPA privacy issues, particularly in light of medical treatment and return to work issues connected to wage replacement benefits and permanent total disability benefits.

 

Exclusive Remedy

Colorado has a very strong exclusivity provision that immunizes employers from a lawsuit filed by an employee for a work injury or occupational disease.  This is part of the trade-off under the workers’ compensation no-fault system.  Removal of medical benefits as part of the benefit package under the workers’ compensation system could, through other legislation or interpretation of the exclusivity provision, erode or eliminate workers’ compensation as an exclusive remedy.  Amendment 69 does not address exclusive remedy concerns.

 

ERISA

The Employee Retirement Income Security Act (ERISA) is a federal statute that regulates private-sector, employer-sponsored benefit plans, including health care coverage.  ERISA protections specifically supersede any and all state laws in so far as they may now or hereafter relate to any employee benefit plan.  29 U.S.C. 1144(a).  Workers’ compensation is an exception to this preemption clause, meaning that states have the right to regulate workers’ compensation.  Once medical benefits under workers’ compensation are integrated into a single payer system, medical benefits may no longer be offered for the purpose of complying with the workers’ compensation benefit package and may now be preempted by ERISA laws.  There is no clear precedent over this issue and Amendment 69 is silent on this issue.

 

Treatment and Medical Impairment Under the Colorado Workers’ Compensation Act

Section 8-42-101, C.R.S. of the Colorado Workers’ Compensation Act requires every employer to supply certain medical benefits, including certain conditions for supplying those benefits given the nature of employment and the condition.  Further, it identifies accreditation process as a requirement for a physician to provide primary care and to provide an evaluation for potential impairment of an injured worker.  ColoradoCare would be the payer for work injuries.  Amendment 69 is silent as to its overall effect on the Colorado Workers’ Compensation Act.  Therefore, integration of the medical benefit component in the workers’ compensation system into ColoradoCare would likely require large-scale revision of the Colorado Worker’s Compensation Act, including revision of statutes and rules regarding physicians and determination of medical impairment.

 

Multi-Jurisdictional Employers

Workers’ compensation laws differ from state to state.  Currently, different state requirements and interpretations of when an injury or occupational disease is work-related creates risk for liability for uninsured loss for employers doing business in multiple jurisdictions.  Integration of medical benefits into ColoradoCare compounds this problem.  By its terms, a “member” is someone at least 18 years old, who has lived in Colorado as a primary resident for one continuous year.  Colorado has one of the fastest-growing populations of any state in the country and many of those individuals are moving to Colorado for employment.  If one of these individuals, 18 years old or older, is hurt at work but not a “member” of Colorado Care, that individual would not be eligible for medical coverage for a work injury.  This would leave the employer obligated to fill the gap in coverage or be subject to penalties as an uninsured employer.

 

Existing Claims

There is no provision in Amendment 69 for how existing claims would be integrated into ColoradoCare.  ColoradoCare would simply assume responsibility for payment of medical benefits for injuries arising out of or within the course and scope of employment.  This is a substantive change in the law and would be given prospective application.  Therefore, integration of medical benefits into ColoradoCare creates a different payer, but is unclear as to what it does to the status of any existing medical care provider for any existing workers’ compensation claim.

 

Litigation

Passage of Amendment 69 and the integration of medical benefits into ColoradoCare will spawn significant litigation over the issues identified above.  This litigation would not be limited to hearings in the Office of Administrative Courts, but would involve District Court actions in both the state and federal systems over a myriad of potential situations.  This litigation will be a significant cost to employers in Colorado and will potentially disrupt “… the quick and efficient delivery of disability and medical benefits to injured workers at a reasonable cost to employers.”  Section 8-40-102, C.R.S.

 

ELECTION LANDSCAPE

The Initiative vs. Legislative Process

Initiative 20, (appearing on the 2016 Ballot as Amendment 69), is an example of Colorado’s flawed initiative process.  Initiative 20 needed only 86,492 signatures to get on the Ballot, but received 158,831 signatures.  This demonstrates the ease with which it got on the Ballot and a level of support for Amendment 69.

Amendment 69 is really in the form of a new statutory act.  Ordinarily, such legislative proposals take the form of a bill with a legislative sponsor, committee assignment, public comment and discussion and debate that allows for amendment, etc., before it is passed and potentially enacted by signature of the Governor.  Amendment 69 would never have appeared in ordinary legislative process as it appears on the Ballot.  Instead, as an initiative, Amendment 69 is non-legislation that alters the Colorado Constitution through a simple popular vote.

Outlook

The proponents of Amendment 69 spent a great deal of money getting it on the Ballot and may not have the resources to advocate further for its passage.  Virtually all business organizations oppose Amendment 69 for reasons identified above.  Further, former Democratic Governor Bill Ritter, and current Democratic Governor John Hickenlooper do not support Amendment 69.  Very limited polling data shows stronger than expected support for this Amendment.  In this unique election cycle, it is difficult to forecast whether or not this will pass since it is connected to the demographics of the people coming out to vote.

Sexual Orientation Discrimination: EEOC Initiates its Next Title VII Challenge

A new era of discrimination lawsuits is upon employers nationwide.  Last month, the U.S. Equal Employment Opportunity Commission (“EEOC”) filed its first lawsuits alleging sexual orientation discrimination under Title VII against employers in Pennsylvania and Maryland.  The lawsuits are the latest step by the Commission to confirm its view that “sex” discrimination under Title VII encompasses discrimination based on sexual orientation. As with most discrimination cases filed by the EEOC, it seeks compensatory and punitive damages, as well as injunctive relief in both lawsuits.

Furthermore, with these lawsuits currently pending, the EEOC has also recently issued guidance on gender identity and sexual orientation discrimination.

What You Should Know About EEOC and the Enforcement Protections for LGBT Workers and

Addressing Sexual Orientation and Gender Identity Discrimination in Federal Civilian Employment

This guidance is all stemming from last year’s EEOC decision in Baldwin v. Department of Transportation where the Commission held for the first time that a claim of discrimination, on the basis of sexual orientation, necessarily involved sex-based considerations under Title VII because sexual orientation discrimination: (1) inevitably involves treating employees differently because of their sex; (2) is associational discrimination on the basis of sex; and (3) necessarily involves discrimination based on gender stereotypes, including employer beliefs about the person to whom the employee should be attracted.

As such, with the filing of the two recent lawsuits in Pennsylvania and Maryland, the EEOC is seeking to have two separate courts agree with its guidance on sex-based considerations. In the first challenge, the Commission alleges that a Pennsylvania-based health care company subjected a gay male employee to harassment because of his sexual orientation.  The lawsuit alleges that employee’s manager repeatedly referred to him using various anti-gay epithets and made other highly offensive comments about his sexuality and sex life.  The employee complained to the clinic director, but the director allegedly refused to take any action to stop the harassment.  The employee eventually quit.

In the second challenge, the EEOC alleges that a lesbian employee at a recycling company was harassed by her supervisor because of her sexual orientation.  The supervisor purportedly made comments about the employee’s sexual orientation and appearance on a weekly basis.  The employee purportedly complained to the general manager and called the company’s hotline about the harassment.  She was fired just a few days after she raised complaints.

Take Away: Plaintiff firms are taking notice and it is expected that sexual orientation based discrimination suits will increase over the next year or so, particularly pending the outcome of the recent lawsuits.  Consequently, employers should prepare for the EEOC to continue its focus on investigating sexual orientation and gender identity claims and should address these types of discrimination in training materials and handbooks.  In the end, employers should treat any such complaints of discrimination just as it would for other Title VII based discrimination complaint raised internally.

legaLKonnection Firm Newsletter – March 2016

newsletter_LK-header-badge2016

Thank you for taking the time to read our Firm newsletter. Our newsletter provides a monthly update on recent developments within our Firm, as well as in the insurance defense community.

In the News

Lee + Kinder, LLC is very proud to have three of its own recognized by Super Lawyers as outstanding in their field: Katherine M. Lee, 2012-2016 Super Lawyer, Joshua D. Brown, 2014-2016 Rising Star, and Joseph W. Gren, 2014-2016 Rising Star.

 

Super Lawyers selects attorneys using a patented multiphase selection process. Peer nominations and evaluations are combined with third-party research. Each candidate is evaluated on 12 indicators of peer recognition and professional achievement. Selections are made on an annual, state-by-state basis. The Rising Stars list is developed using the same patented multiphase selection process used for the Super Lawyers list; however, to be eligible for inclusion, a candidate must be either 40 years old or younger, or in practice for 10 years or less. Under this rigorous selection process, only the top 5% of lawyers in a state are named to the Super Lawyers list, and only the top 2.5% to the Rising Stars list.


Victory Lap

Of Counsel Sheila Toborg and associate Stephen Abbott successfully defended Respondents’ interests at a full-contest hearing in Brougham v. Spectrum Wireless Solutions and Liberty Mutual, W.C. 4-961-481-03 (February 29, 2016). Claimant suffered a seizure on the job and sustained injuries when he hit his head on the ground. ALJ Lamphere found that Claimant’s injury was idiopathic in nature and denied his claim for benefits.

 

 

Of Counsel Joseph Gren had a successful month with several big wins. Mr Gren, and associate Matt Boatwright, successfully defeated two compensability claims alleged by the same Claimant in Speed v. United Parcel Service and Liberty Mutual Insurance, W.C. Nos. 4-983-398 and 4-958-598. Claimant claimed a back injury as a result of a slip and fall at the employer’s facility. Claimant subsequently alleged a neck, arm, and brain injury as a result of a second slip and fall on ice in the company parking lot. Mr. Gren litigated both claims at the same hearing and introduced evidence, which ALJ Cannici found to be persuasive, that no work-related event had occurred in either claim.

Mr. Gren and associate Dan Mowrey, also received a Summary Order denying compensability for a carbon monoxide poisoning claim in Jennifer Barnes v. Rural Metro Corporation and ACE America Insurance, W.C. No. 4-983-123. Claimant claimed that she was exposed to carbon monoxide from the exhaust of her ambulance while in the course and scope of her employment. Mr. Gren introduced testimony from Claimant’s co-worker that discredited Claimant’s story. Mr. Gren also introduced expert medical testimony and a medical report proving that Claimant was not subjected to carbon monoxide poisoning. ALJ Jones found Dr. Bernton’s testimony and the medical report to be more credible than Claimant’s testimony and issued a Summary Order denying and dismissing the claim.


 


Legislative Update 2016

The 2016 legislative session is half over. The deadline for introduction of bills has come and gone; however, late bill introduction is very common. This is a brief summary of some of the introduced legislation of interest to clients:

Workers Compensation

Right now there are no pending bills regarding workers’ compensation. It is anticipated that there will be a bill introduced regarding first responders and compensability of posttraumatic stress disorder. A joint bill arising from discussions between Pinnacol Assurance, WCEA and CSIA is also a possibility, along with a bill from Pinnacol Assurance to allow it to establish a separate corporate entity that could write policies outside of Colorado.

Other Bills of Interest – Follow this link to read the entire article.

 


Cases You Should Know

Show Me the Money: In Brown v. Apollo Group, Inc. and Travelers Indemnity Company, (W.C. 4-905-547 (January 21, 2016 ICAO), ICAO held the ALJ erred when he prevented the Claimant from cross-examining Respondents’ medical expert on the amount of money earned for performing IMEs and testifying on behalf of Respondents. However, because the ALJ allowed Claimant to cross-examine the expert regarding the percentage of defense work he performed, ICAO held that there was no prejudicial error to justify a reversal of the ALJ’s Order. Moral of the story: Expert witness fees are fair game for cross-examination. Claimant attorneys often attack Respondents’ experts in an attempt to show prejudice and bias.

 

Good Writing is Clear Thinking Made Visible: In Garcia v. Swift Foods Company and Zurich American Insurance, Co. W.C. 4-679-322 (February 11, 2016 ICAO), the ALJ dismissed Respondents’ Motion for Summary Judgement (MSJ) because the language noted in a Stipulation was unclear. In this case, Claimant timely filed a Petition to Reopen. The parties subsequently filed a Stipulation indicating that Claimant’s Application for Hearing endorsing the issue of Petition to Reopen was withdrawn and all other issues were reserved. Several years later, Claimant refiled the Petition to Reopen based on an alleged worsening of condition. Respondents filed a MSJ arguing that Claimant withdrew the prior Petition to Reopen and the updated pleading was not timely filed within the six-year statute of limitations. ICAO denied the MSJ because there was a factual dispute regarding whether the Stipulation constituted a withdrawal of the issue of Petition to Reopen or preserved the right to file a Petition to Reopen based on a worsening of condition. Moral of the story: Stipulations are enforceable agreements, but can only be enforced to the extent of what they state. Be clear and be concise in written agreements with Claimants.

 

No Time for DIME Means No Time for MMI: In Mohammed v. Cargill Meat Solutions and American Insurance Group Plan, W.C. 4-951-860 (January 27, 2016 ICAO), ICAO reversed the ALJ’s order which granted additional medical benefits after MMI. Claimant was placed at MMI and ongoing medical treatment was denied. Instead of pursuing a DIME to challenge MMI, Claimant went to a new physician seeking additional medical treatment that he believed was necessary to reach MMI. The ALJ found that the additional treatment was causally related to the work injury and reasonably necessary to attain MMI. ICAO reversed this Order holding the ALJ lacked authority to resolve the issue of MMI without a DIME. Moral of the story: Parties are not permitted to indirectly attack determinations of MMI without first pursuing a DIME.

 

Parking Lots…Of Course It’s Compensable. In Rodriguez v. Pueblo County, W.C. No. 4-911-073 (ICAO January 21, 2016), Claimant clocked out to attend a union meeting. After the union meeting Claimant was walking through the employer’s parking lot to go home when she slipped and fell and was injured. The ALJ determined Claimant’s injury did not arise out of her employment duties as she was engaged in personal matters when she was injured. Claimant appealed. ICAO reversed the ALJ concluding that any alleged personal deviation ended when Claimant exited the building to return to her car in the employer’s parking lot. The Panel noted that Colorado appellate courts have held that injuries sustained while walking through the employer’s owned, maintained, or provided parking lots arise out of employment because the employer is required to furnish safe means to and from work. Thus, such injuries in parking lots are an incident of employment. Moral of story: Most injuries occurring in employer parking lots before or after work are compensable.

 

No Forwarding Address? No Problem. In Stoewer v. Douglas Colony Group, W.C. No. 4-937-085 (ICAO January 21, 2016), Respondents mailed the FAL to opposing counsel at his previous address. Claimant’s counsel untimely objected to the FAL. The ALJ determined the objection was untimely and the issue of PPD was closed pursuant to the FAL because Claimant received a copy of the FAL. Even though Respondents had notice of opposing counsel’s new address, he failed to update his address with the Division. ICAO reversed and held that due process is violated when the attorney of record, through no fault of his own, is denied notice of critical determinations in his client’s case. This applies to copies of admissions. Additionally, Respondents had notice of opposing counsel’s new address and there was no requirement that the new address be on record with the Division. Moral of the story: When in doubt, send pleadings to the attorney’s or claimant’s (if pro se) known address and address of record. This may be different from the address on file with DOWC, but if you have notice of the new address, use it.

 

And You Think Your Job Stinks…. In this bizarre and somewhat disturbing case, Claimant sought TTD benefits for a compensable claim. Respondents asserted the affirmative defense of termination for cause. The ALJ determined Respondents failed to prove Claimant had performed a volitional act leading to his termination. The ALJ listed a number of facts to support the Order. Of significance, Claimant’s direct supervisor testified that he often engaged in “pranks” with his employees which included: shooting golf balls at employees from a potato gun; building and detonating bombs in vehicles and irrigation ditches where employees were working; putting his feces in employees’ lunches; and defecating on employees’ heads as they worked in irrigation ditches. Claimant brought information regarding the direct supervisor’s conduct to managers. Claimant reported he was afraid for his and coworkers’ lives and that he had reported complaints regarding his direct supervisor to head supervisors for eight years but nothing was done. Claimant was ultimately terminated for “insubordination” for refusing to communicate with his direct supervisor. The ALJ determined Claimant did not precipitate the employment termination by a volitional act which he would reasonably expect to result in the loss of employment. Instead, it appeared that the alleged insubordination was pretext for firing him given that the actions of the direct supervisor were not grounds for termination. W.C. No. 4-976-398. Moral of Story: The court will consider the nature of the employer’s conduct using an objective standard when assessing whether a claimant’s termination resulted from a volitional act or some other reason. The reasons can be independent from the work injury if Claimant did not exercise control over the situation leading to the separation.

Legislative Mid-Session Update 2016

The 2016 legislative session is half over. The deadline for introduction of bills has come and gone; however, late bill introduction is very common. This is a brief summary of some of the introduced legislation of interest to clients:

Workers Compensation

Right now there are no pending bills regarding workers’ compensation. It is anticipated that there will be a bill introduced regarding first responders and compensability of posttraumatic stress disorder. A joint bill arising from discussions between Pinnacol Assurance, WCEA and CSIA is also a possibility, along with a bill from Pinnacol Assurance to allow it to establish a separate corporate entity that could write policies outside of Colorado.

Other Bills of Interest 

Senate Bill 16–056

This bill broadens the protections of the state whistleblower laws by including state employees disclosing information that is not subject to public inspection under the Colorado Open Records Act, when the disclosure is made to state entities that are designated as whistleblower review agencies. This bill is in the Judiciary Committee.

Senate Bill 16–070

This bill prohibits an employer from requiring any person, as a condition of employment, to become or remain a member of a labor organization, or to pay dues, fees or other assessments to a labor organization or to a charity organization or other third-party in lieu of a labor organization. Further, any such agreement violates these prohibited activities and are deemed void. This bill was originally assigned to the Business, Labor & Technology committee. After several amendments, the bill passed out of Senate and was sent to the House where it is assigned to State, Veterans & Military Affairs and will likely die.

House Bill 16-1002

In 2009 a bill passed known as the Parental Involvement in K-12 Education Act. This allowed an employee subject to the Family Medical Leave Act to take leave from work to attend various academic activities with, or for, the employee’s child. The leave was limited to 6 hours per month and 18 hours in any academic year. The employer was allowed to restrict the use of the leave in cases of emergency for the employer, or where the employment situation could endanger a person’s health or safety if the employee were absent. Further, the leave was limited to 3 hour increments at any time and required the employee to submit written verification from the school of the activity. The bill had a sunset provision repealing it effective September 1, 2015. This bill re-creates the 2009 bill with a couple of changes. It expands the type of academic activities to include attendance with school counselors. It also requires school districts and charter schools to post information about this statute on their websites. This bill was assigned to the Education committee in the House and eventually passed through the House without amendment. When introduced into the Senate it was assigned to State, Veterans & Military Affairs where it was postponed indefinitely.

House Bill 16 – 1078

This bill concerns whistleblowing protection for public employees not employed directly by the state. The bill prohibits county, municipality or local education providers from imposing disciplinary action against an employee for statements made by the employee about the local government that the employee believes shows a violation of state or federal law, a local ordinance or resolution, or a local education policy provider regarding waste, misuse of public funds, fraud, abuse of authority, mismanagement or danger to the health or safety of students, employees or the public. The bill would allow the employee to file a written complaint with the Office of Administrative Courts alleging some form of disciplinary action that the employee believes violates the whistleblower protection and would allow the employee to seek injunctive relief and damages. If the employee loses at the administrative hearing level, the employee would still have the ability to file a civil suit District Court. This bill was introduced and assigned to the local government committee in the House where an amended version was referred to appropriations. As there will be a fiscal note attached to the bill and given the Office of Administrative Courts involvement, the bill stands virtually no chance of passing.

House Bill 16 1114

This bill eliminates current employment verification standards requiring an employer to attest that it verified the legal work status of an employee and has not knowingly hired an unauthorized alien. It additionally eliminates the requirement for an employer in Colorado to submit documentation to the director of the Division of Labor in the Department of Labor and Employment that demonstrates the employer complied with federal employment verification requirements. This bill was assigned to Business Affairs and Labor where no activity has been taken and it will likely die.

House Bill 16 – 1154

This bill purports to clarify the definition of “employer” to only include a person that possesses the authority to control an employee’s terms and conditions of employment and has the ability to actually exercise that authority directly. The bill eliminates a franchisor from being considered an employer of a franchisee’s direct employees unless the franchisor has control over those employees. This bill was assigned to Local Government where no activity has been taken and it will likely die.

House Bill 16 – 1202

Current law requires employers to examine the legal work status of any newly hired employee within 20 days by using paper-based forms for identification. This bill would require employers to participate in the Federal e-verification program to determine work eligibility for newly hired employees. It then requires the employer to maintain documentation of this practice and submit it to the director of the Department of Labor and Employment. If an employer fails to do this it would be subject to a fine of up to $5000 for the first offense and up to $25,000 for the second offense, along with suspension of the employer’s business license for up to 6 months for continued offenses. This bill was assigned to the State, Veterans & Military Affairs where it was postponed indefinitely and will likely die.

legaLKonnection Firm Newsletter – February 2016

newsletter_LK-header-badge2016

Thank you for taking the time to read our Firm newsletter. Our newsletter provides a monthly update on recent developments within our Firm, as well as in the insurance defense community.

In the News
Congratulations to Joseph Gren on his recent admittance to the Arizona State Bar for the practice of law.

 

Lee + Kinder LLC is proud to be a sponsor of the 7th Annual PWC Bowling Cup on February 19th. Good luck to all the teams!

 

 

Member Joshua D. Brown was the guest presenter at this month’s Colorado Self-Insured Association’s meeting. Mr. Brown presented on the topic of workplace bullying and the potential liabilities that may result, both in workers’ compensation and in general employment practices. As a hot topic issue, workplace bullying is gradually increasing social interest through proposed legislation by various lobbying groups across the county. Mr. Brown provided an overview of the proposed legislation that exists in other jurisdictions, along with recommendations on how employers both nationwide and in Colorado can adequately protect themselves against potential liability.


Victory Lap

Member Tiffany Kinder and Associate Kelsey Bowers were successful on a recent Motion for Summary Judgement in Josue v. Anheuser-Busch, Inc. and ACE American Insurance Company, WC 4-954-271 (January 26, 2016). The Court agreed with Respondents’ argument and dismissed Claimant’s Application for Hearing endorsing the issue of over-payment with prejudice. ALJ Jones upheld the over-payment asserted in the Final Admission of Liability and ordered Claimant to repay the over-payment of $16,222.32.

 

Of Counsel Joseph Gren and Associate Daniel Mowrey were also successful on a Motion for Summary Judgment in Meza v. Bayou Well Services, Inc., and Liberty Mutual Group, W.C. 4-929-946 (January 29, 2016). The issue was whether Claimant received the FAL. Opposing counsel claimed Liberty Mutual did not properly serve the FAL on them when it was originally filed with the Division but admitted to receiving it six months later. Respondents asserted that Claimant’s counsel received a copy of the FAL and failed to object within 30 days of receipt. ALJ Cannici granted Respondents’ Motion for Summary Judgment noting Claimant’s counsel received a copy of the FAL, though months after the date of the original FAL, and that Claimant did not object to FAL when served a second time. Thus, the claim is closed administratively, and Claimant cannot reopen on the grounds of fraud or mistake.

 


 

History of Workers’ Compensation Law: Part IlI: Emergence of the Modern-Day System

This is the final piece of the three-part series surveying the history of workers’ compensation. Prior to 1911, an individual residing in the United States, regardless of their state residency, who suffered a workplace injury could only recover damages by utilizing traditional tort based law. In other words, an injured worker would need to sue their employer and claim the employer’s negligence or intentional conduct caused the subsequent injury. The employer could raise defenses such as contributory negligence or assumption of risk to bar the receipt of monetary damages. This system was often cumbersome, time-consuming, unpredictable, and expensive for both the employer and employee. Click here to continue reading this article

 


Cases You Should Know

Attack of the carpeted floor – A personal risk we face daily: In Miles v. City and County of Denver, W.C. 4-961-742 (December 15, 2015), the ALJ found that a Claimant stepped forward with her leg on level, unremarkable carpet without twisting. The Claimant experienced a pop, and MRI imaging showed a torn meniscus. The ALJ found that the Claimant’s pre-existing degenerative knee condition contributed to the injury, was necessarily personal in nature, and that the knee condition did not combine with any special hazard of employment. ICAO agreed, noting that the Claimant’s injury did not constitute an “unexplained fall,” since the ALJ had found that the Claimant’s injury was caused at least in part by the Claimant’s idiopathic knee condition, and that the injury necessarily stemmed from a personal risk, not from her employment. Moral of the Story: Just because an employee was injured at work does not necessarily mean the injury is compensable.

AWW is a magic number: In Defrece v. 20/20 Theatrical, W.C. No. 4-920-455 (December 7, 2015), Claimant sought to reopen his claim on the basis that an ALJ erred in calculating AWW. ICAO stated the issue of AWW may be reopened pursuant to C.R.S. §8-43-303 in case of a mistake in fact or law. Because the authority to select an alternative method for computing AWW is discretionary, an AWW calculation by an ALJ may not be set aside unless it amounts to an abuse of discretion. Moral of the Story: Since an ALJ has wide discretion regarding the method of AWW calculation, mere disagreement with the ALJ’s method does not constitute a mistake and is not a basis for reopening.

Getting in the door is easy…getting benefits once you’re in is hard. In Mitchem v. Donut Haus #2, Inc., W.C. No. 4-785-078 (December 28, 2015), Claimant sought review of an ALJ’s order denying and dismissing her request for authorization of certain maintenance care benefits in a claim where Respondents had filed a Final Admission of Liability admitting for a general maintenance care award. ICAO clarified that there is a different evidentiary standard for determining whether a Claimant is initially entitled to a general maintenance award versus determining whether a Claimant has proven entitlement to a specific medical benefit when Respondents have already admitted to a general award. A Claimant seeking initial entitlement to a general award is subject to the substantial evidence standard while a Claimant seeking entitlement for a specific benefit under a general award is subject to the preponderance of evidence standard. Moral of the Story: A Claimant seeking entitlement to a general maintenance care award faces a lower evidentiary burden than a Claimant seeking entitlement to a specific maintenance medical benefit.

If the ATP isn’t under duress, odds are good the referral is legit. In Sackett v. ICAO, et al. (Colo. App. 2015) (nsfop), ICAO reversed an ALJ’s holding that an Authorized Treating Physician’s (“ATP”) referral of Claimant to her Primary Care Provider (“PCP”) was valid on the basis that the ATP did not employ independent medical judgment. Rather, the referral appeared to be the product of a nonmedical decision made in response to Claimant and her attorney’s request that she see her PCP in the event of a contested claim. The Colorado Court of Appeals reversed ICAO, recognizing a broad definition of the term independent medical judgment. The appellate court stated, “In our view, independent judgment may take many forms, so long as the physician determines, without undue outside influence, that a referral is in the injured worker’s best interest.” Moral of the Story: Independent medical judgment is an amorphous concept—if the ATP finds the referral in the Claimant’s best interest, the referral likely is valid.

All work and no TPD makes Johnny a dull boy: In Edgar v. Halliburton Energy Services, W.C. 9-971-336-01 (December 22, 2015), Claimant sustained a compensable injury and was placed on work restrictions that did not allow him to perform his pre-injury job duties requiring heavy lifting. He found subsequent employment within his work restrictions but at a lower wage. On appeal, Claimant was awarded TPD benefits because the panel determined his economic wage loss was caused by the by the work injury. The panel reasoned that once a Claimant establishes a disability in the sense that the injury impairs his or her ability to perform his regular job duties, the right to temporary disability benefits is measured by Claimant’s wage loss, because physical restrictions caused the injury to affect the Claimant’s prospects for finding alternative employment. Moral of the story: If there is a causal link between the industrial injury and the subsequent wage loss, TPD must be awarded.

Time waits for no one: In Muro-Rios v. Ashley Manor, LLC, W.C. 4-964-081 (December 22, 2015), Claimant was denied a claim for TTD benefits based on the termination statutes after suffering work-related injuries on September 17, 2014. The question posed by the termination statutes, C.R.S §§8-42-105(4) and 8-42-103(1)(g), is whether Claimant is responsible for the termination of employment. Claimant was hired in 2008 and at the time of hire, he represented that he was a lawful permanent resident and an alien authorized to work by submitting a driver’s license and a Social Security card. Shortly after Claimant’s injury, the employer discovered that Claimant’s Social Security number was invalid and asked Claimant to provide information to remedy the issue. Claimant failed to do so and was terminated. The ALJ and Appeal panel found that Claimant’s false submission of a Social Security card, and then later failure to correct the matter, constituted volitional acts and he was responsible for his termination on October 21, 2014, six years later after submitting the false information. Moral of the story: The remoteness of the volitional act does not necessarily affect the application of the termination statutes.

Double-dipping in the sweet spoils of Comp: In Keel v. ICAO et al. (Colo. App. 2015) (nsfop), the Colorado Court of Appeals addressed double-dipping in multiple states’ workers’ compensation systems. Section 8-42-114, C.R.S. sets forth that Colorado workers’ compensation benefits may be offset by 50% of out-of-state benefits paid for the same injury. Those benefits paid in another state for the same injury may not be credited toward the Colorado benefits. Moral of the story: As a result, since different states provide different offsets for other states’ workers compensation benefits, a Claimant may strategically file a claim in one state first so that he or she may benefit from the more generous offset provision of another state in a later claim for the same injury.

ICAO’s punting game: Appealing a decision requires an award denying or awarding benefits: In Taylor v. Alpine Management, W.C. 4-959-907, (December 22, 2016), a Claimant brought a claim against a respondent company alleging that the company was a statutory employer. The ALJ found that the respondent was not the Claimant’s employer at the time of injury, and dismissed the respondent from the claim, but no specific benefits were awarded or denied. The Claimant appealed the decision. ICAO declined to address the merits of the order on the basis that the order was interlocutory. Moral of the story: § 8-43-301(2), C.R.S., provides grounds for appeal only of those orders that award or deny benefits.

History of Workers’ Compensation, Part III, Emergence of the Modern-Day System

This is the final piece of a three-part series surveying the history of workers’ compensation. Prior to 1911, an individual residing in the United States, regardless of their state residency, who suffered a workplace injury could only recover damages by utilizing traditional tort based law. In other words, an injured worker would need to sue their employer and claim the employer’s negligence or intentional conduct caused the subsequent injury. The employer could raise defenses such as contributory negligence or assumption of risk to bar the receipt of monetary damages. This system was often cumbersome, time-consuming, unpredictable, and expensive for both the employer and employee.

In 1911, the State of Wisconsin passed the first statutory law specifically addressing workers’ compensation entitlement benefits. The goal ofWisconsinAct the act was to create an efficient system to adjudicate claims while reducing legal hurdles for the injured worker thus creating a predictable system where the employer could foresee limited monetary risks. The Wisconsin system created a “no-fault” legal system in which the injured worker would no longer need to prove that the employer engaged in some type of culpable negligent or intentional conduct. According to the Wisconsin Department of Workforce Development, “the intent of the law was to require an employer to promptly and accurately compensate a worker for any injury suffered on the job, regardless of the existence of any fault or whose it might be.” The legislation provided for wage loss benefits, cost of medical treatment, disability payments, and payment for vocational rehabilitation training.

The legislation also eliminated an injured workers’ right to seek damages historically available through the tort system. As discussed in part two of the series, by 1911 the general public had become more concerned about the deplorable and often unsafe working conditions in factories across the nation. The Wisconsin Workers’ Compensation Act barred the injured worker from pursuing non-economic damages awarded by juries, including pain and suffering and loss and enjoyment of life. Similar to today’s ubiquitous state-based worker’s compensation acts, the Wisconsin Act enumerated the specific type of damages an injured worker could receive, thereby duly preventing the injured worker from requesting a jury to adjudicate damages. The judge adjudicating workers’ compensation claims, as a finder of fact, could not award benefits beyond the provided benefits in each respective act. The Wisconsin Act, while providing for specific benefits and shifting liability to the employer under the no-fault system, also provided employer’s with protection by limiting the scope of damages and removing the question of damages from unpredictable juries.

In the decade following the Wisconsin Act, nearly every state in the union promulgated some form of a workers’ compensation act. Mississippi was the last state to pass an act, but did so by 1948. Interestingly, as Gregory Guyton points out in his “Brief History of Workers’ Compensation,” the medical profession did not receive the worker’s compensation system with open arms. Medical professionals generally viewed worker’s compensation as a form of socialized medicine. According to Guyton, when the Social Security disability insurance act was created in the 1930s, disability based medicine expanded becoming lucrative for medical professionals. On the heels of the respective disability acts, the American Medical Association published the first guides to the evaluation of permanent impairment in order to develop a method to provide compensation evaluations. In Colorado, the legislature has decided to continue using the third edition of the AMA Guides to permanent impairment. The guide is currently available in six editions.

Given the volume of claims in any one state for benefits, each state may elect to create administrative agencies to adjudicate workers’ compensation claims. Colorado, for example created the Office of Administrative Courts in 1976 to hear an array of limited subject matter cases, including workers’ compensation. Prior to that time, the District Court handled worker’s compensation claims. Any individual working in workers’ compensation is familiar with the respective administrative system and ministering the claims. As the American workforce changes in age, and disability laws, including the ADA, become more pervasive in the work environment, there are open questions as to whether disability acts or managed health care administered by the federal government will substitute various aspects of workers’ compensation. For now, the workers’ compensation model most are familiar with will remain stable, subject to changes made by each respective legislation.

legaLKonnection Firm Newsletter – January 2016

Lee + Kinder LLC

Thank you for taking the time to read our Firm newsletter. Our newsletter provides a monthly update on recent developments within our Firm, as well as in the insurance defense community.

In the News

With the Stock Show in town, many of the members of the Colorado Cattleman’s Association were also visiting for the midwinter meeting at the Renaissance Hotel. As a part of the midwinter meeting the Colorado Cattleman’s Association held a legal symposium. Of Counsel Frank Cavanaugh attended on behalf of Lee + Kinder, LLC to meet members and discuss the legal services Lee + Kinder, LLC provides.


Victory Lap

Of Counsel Joe Gren successfully defended two claims this month. In Hardy v. Wendy’s of Colorado Springs and Traveler’s Casualty Insurance Company of America, W.C. 4-974-734 (January 14, 2016), Mr. Gren defended Claimant’s worker’s compensation claim. Claimant alleged an industrial injury to his right shoulder following an electric shock. Mr. Gren successfully argued that Claimant’s need for right shoulder treatment was not caused by Claimant’s allegation that he was shocked by a live wire. The ALJ found Respondents’ expert opinions persuasive and credible that Claimant’s symptoms, and need for medical treatment, were due to his preexisting injuries. Mr. Gren also presented witness testimony from a fellow coworker who stated that Claimant was never shocked by the wire. The ALJ denied and dismissed Claimant’s claim.

Mr. Gren also received a favorable judgement from ALJ Lamphere in Good v. Evraz, INC., NA W.C. No. 4-929-785. The ALJ found that conversion of Claimant’s scheduled lower extremity impairment to impairment of the whole person was not warranted. Mr. Gren successfully argued that while Claimant may experience the occasional limp, his low back and hip pain was not related to the asserted limp. The ALJ was persuaded that Claimant’s low back and hip pain was a consequence of being substantially de-conditioned and having to return to full duty. Claimant’s request for conversion of his 16% scheduled right knee impairment to the corresponding 6% whole person rating was denied and dismissed.

Member Joshua Brown successfully argued in favor of striking penalties as an issue for hearing in two prehearing conferences. In Vasquez-Cabrera v. Olsons Greenhouses of Colorado and American Zurich Insurance, W.C. No. 4-972-192, Claimant sought penalties for “unreasonable denial of prior authorization” in response to Respondents’ denial of treatment for an injury the authorized provider felt was unrelated to the claim. Claimant acknowledged that there was no specific request for treatment that had been denied. The PALJ struck the issue of penalties on the basis that no particular penalty had been specified in the pleading, as required under the Act. The PALJ denied Respondents’ motion to pursue attorney’s fees for having to prepare for an unripe issue, ruling that simply because an issue was stricken on grounds of inadequacy does not necessarily mean that it is unripe. In Skoll v. Prime Sight Associates and Colorado Casualty C/O Liberty Mutual Insurance, W.C. No. 4-960-091, the PALJ struck penalties on the same basis, failure to plead the issue with specificity. However, the PALJ in Skoll granted Respondents’ motion to preserve the issue of attorney’s fees for later determination at hearing, ruling that whether the issue endorsed by Claimant was ripe or not was a factual matter that required determination by an ALJ and was not appropriate for determination at prehearing.

Associate Mathew Boatwright successfully defended against a contested claim for an alleged knee injury in Graffis v. United Parcel Service and Liberty Mutual Insurance, W.C. No. 4-978-066 (December 31, 2015). Claimant alleged that he suffered an aggravation of a preexisting condition while walking to deliver a package. Respondents’ expert testified that, while there was a preexisting, non-related condition that could have been aggravated from Claimant’s work duties, there was no specific work-related mechanism to indicate that the onset of pain was more likely than not related to Claimant’s work duties. Respondents argued that merely walking, absent some special hazard of employment, is not a sufficiently work-related activity to result in a compensable injury. ALJ Peter Cannici agreed, and denied and dismissed the claim.

Associate Jessica Melson successfully defended a claim for conversion of the shoulder. Claimant testified that due to his industrial shoulder injury he has pain in his neck and pectoral area which disrupted his sleep. Therefore, since his symptoms extended beyond the shoulder injury, his scheduled impairment should convert to a whole person rating. Ms. Melson presented Claimant’s medical records where he specifically denied neck pain, pain beyond the shoulder, or difficulty sleeping. ALJ Turnbow found Claimant’s testimony not credible and denied his request for conversion. Dennis Craig v. Courtesy Motors, CO and Republic Indemnity, W.C. 4-966-802 (December 24, 2015).


Personnel Files in Colorado: Who owns the file and what privacy interests are involved?

This is a question that I repeatedly see throughout the year and it comes in a variety of contexts. Often times, employers who may have recently terminated an employee, are suddenly posed with a request from that former employee for his/her personnel file. Sometimes, within a workers’ compensation or other employment related claim, the worker is seeking copies of the personnel file in an effort to bolster his or her claims. Click here to continue reading the article.


Cases You Should Know

Sometimes You Can Break the Rules and Get Away With It: In American Furniture Warehouse v. Industrial Claim Appeals Office and Flores (December 3, 2015)(nsfop), the Colorado Court of Appeals upheld an ALJ’s finding that Claimant did not willfully violate a safety rule of the employer when he failed to tether himself while loading from a platform. Though the employer had a safety rule requiring its employees to tether themselves to an anchor when loading from an elevated position, Claimant neglected to tether himself because he felt he was too large to fall through the gap from the platform to the floor. Relying upon case precedent that “willful” means acting with deliberate intent or with knowledge that an injury is likely to result from disregard of a rule, the ALJ found that Claimant’s failure to use the tether did not amount to willful disregard of the safety rule. See City of Las Animas v. Maupin, 804 P.2d 285 (Colo. App. 1990); see also Johnson v. Denver Tramway Corp., 171 P.2d 410 (Colo. 1946). The Court of Appeals affirmed, finding that the ALJ’s opinion was legitimately based upon inferences drawn from circumstantial evidence and substantially supported by the evidence in the record.

An Independent Contractor Might Be Your Employee: In Precision Home Buildings, LLC v. Industrial Claim Appeals Office and Venancia De La Paz Herrera (October 22, 2015)(nsfop), the Colorado Court of Appeals affirmed an ICAO decision which found, contrary to the ALJ, that Respondent Precision was a statutory employer. Precision operated as a general home building contractor and hired Conceptos, the painting company subcontractor for which Claimant was working when he was injured. Both entities were uninsured. Though Precision had no employees and did not engage directly in any home construction, the Court found that, under the “regular business” test, Precision regularly contracted out painting work. As contracting painting projects to complete homes was part of its regular business, Precision was found to be a statutory employer of the injured worker.

When You Really Do Need A Doctor’s Note: The ICAO found that a release to regular employment has to come from the attending physician and that an ALJ does not have discretion to challenge such a release to regular employment. Connie Andrews v. School District RE-1 Valley and Pinnacol Assurance, W.C. 4-887-035-02 (ICAO, December 4, 2015). In this claim, Respondents appealed an Order from the ALJ that found the claimant’s reasons for leaving her multiple jobs were not relevant to her entitlement to temporary disability benefits, and that a treating physician’s release of the claimant to regular employment was “not credible.” The ALJ had ordered Respondents to pay temporary disability benefits for the wage loss from her three jobs, finding her reasons for leaving each of them irrelevant. ICAO remanded the claim to the ALJ for additional findings, requiring the claimant to prove by a preponderance of the evidence that her inability to earn wages was related to her work injury. The ICAO ordered the ALJ to make factual findings as to which of the claimant’s physicians was the attending physician and adhere to the opinion of the attending physician regarding the claimant’s return to regular employment.

Shouldering the Load: In Velvet Serena v. SSC Pueblo Belmont Op Co. LLC., and ACE American Insurance, W.C. 4-922-344-01 (ICAO December 1, 2015), the ICAO was addressing an ALJ’s finding that the claimant was entitled to an additional 10% scheduled impairment rating for each of her shoulders as a result of the claimant undergoing bilateral shoulder decompression surgeries. ICAO agreed with respondents argument that the AMA Guides only provide for such an “extraordinary rating” when the surgery involved is an arthroplasty. ICAO similarly rejected the claimant’s argument that her decompression surgeries resulted in “derangement of a body part,” and therefore was entitled to an additional impairment rating based on the Director’s Impairment Rating Tips. The ICAO found that a decompression surgery is not an arthroplasty, and therefore the claimant was only entitled to an impairment rating based on range of motion loss.

Per Diem – Allowance or Wage?: In William Stonebraker v. American Merchandising Special and Liberty Mutual Insurance, W.C. 4-959-213 (ICAO, December 1, 2015), the ICAO found that Claimant’s Average Weekly Wage (AWW), for the purposes of calculating the payment of temporary benefits, is to be based on payments from the employer which exclude those made for per diem reimbursement purposes. Claimant worked as a field service representative and would travel to various locations using his personal vehicle. Claimant was paid on an hourly basis and was reimbursed for the approximate cost he incurred for using his personal vehicle. The ALJ applied the definition of wages set forth in C.R.S. § 8-40-201(19)(c). That paragraph specified that “no per diem payment shall be considered wages under this subsection (19) unless it is also considered wages for federal income tax purposes. The ALJ excluded the reimbursement payments from the calculation of Claimant’s wages. ICAO affirmed noting that the fixed and variable reimbursement payments were not subject to withholding for income taxes pursuant to IRS guidelines.

Personnel Files in Colorado: Who owns the file and what privacy interests are involved?

This is a question that I repeatedly see throughout the year and it comes in a variety of contexts. Often times, personnel-file-28116_960_720employers who may have recently terminated an employee, are suddenly posed with a request from that former employee for his/her personnel file. Sometimes, within a workers’ compensation or other employment related claim, the worker is seeking copies of the personnel file in an effort to bolster his or her claims. Additionally, employers receive requests from plaintiffs or third-parties seeking copies of personnel files concerning witnesses or company representatives. Consequently, employers are often placed in a decision whether or not to disclose this information and if there are any privacy issues with disclosing the information.

While the Colorado Supreme Court and Court of Appeals have not definitively addressed this issue head on, there is support for the conclusion that personnel files are property belonging to the employers and not the employees. In Corbetta v. Albertson’s Inc., it was the first time the Colorado Supreme Court addressed the issues of personnel files and privacy interests. The case involved a suit by a customer of Albertson’s alleging a variety of claims arising out of the plaintiff cracking several teeth on a pebble in a spinach salad she purchased. As part of discovery, plaintiff requested the entire employment files of the store manager, all assistant managers and all deli employees. Albertsons objected to the disclosure of these files invoking a right to privacy argument of the employees. The trial court ordered production of the files and concluded that while the personnel files were the property of Albertsons, disclosure was appropriate under the circumstances.

The Supreme Court overturned the trial court’s decision noting primarily that it did not appropriately balance the privacy interests involved and make appropriate factual findings and conclusions in addressing those privacy interests. However, the Supreme Court, in this decision, did not overturn the conclusion of the trial court that the personnel files were the property of the company. Accordingly, employers can rely on this decision for the conclusion that personal files are company property and not the property of the specific employee. Furthermore, while the Supreme Court did provide a right to privacy balancing test for determination of whether a personal file can be disclosed, the Court later in In re District Court, Cty and County of Denver revised this test, which now is the current law.

The case of In re District Court, Cty and County of Denver involved a former client of a law firm suing for legal malpractice and breach of fiduciary duties. As part of discovery, the former client requested financial information of the law firm members. The Supreme Court determined that when discovery requests implicate right to privacy interests:

  • The requesting party must first prove that the information requested is relevant to the subject of the action;
  • If shown relevant, then the party opposing the request must show that it has a reasonable expectation that the requested information or materials is confidential and will not be disclosed;
  • If the trial court finds that there is a legitimate expectation of privacy in the materials, the burden then shifts back to the requesting party to prove either that disclosure serves a compelling state interest or that there is a compelling need for the information AND that the information is not available from other sources.

There are other issues that implicate personnel files. First, employers are not required to give employees access to their personnel records. Access to personnel files and the information they contain should be restricted. Only authorized employees, supervisors or managers should be permitted to access personnel records on a “need to know” basis. Second, records regarding confidential, sensitive information unrelated to job performance, such as regarding citizenship, garnishments and any medical condition that could cause someone else to conclude the employee has a communicable disease (e.g., HIV), should be maintained in separate, confidential files. For example, if an employee suffers a workers’ compensation claim, it is highly recommended that a separate file be created to avoid confidential and private information being contained within his or her personnel file, such as medical reports.

Take Away

Personnel files are the property of the employers and thus, it is recommended that outside the scope of litigation, any such request for disclosure be denied. When requests are made as part of litigation or insurance claims, it is imperative that the right to privacy issue be properly considered and that the litigants requesting the information properly meet their burdens before a trial court.

EXTRA EXTRA! RULE 16 CHANGES COMING SOON!

 
One of Lee + Kinder LLC’s primary goals is to educate our clients and keep them apprised of changes in Colorado law.

 


 

There are changes coming to Workers’ Compensation Rule of Procedure 16 that will be effective January 1, 2016.
The changes to the rule are noted in RED below.

WCRP 16-9(B) requires a provider to submit a written request for prior authorization with supporting medical documentation when:

(1) The service exceeds recommended limitations under the medical treatment guidelines,
(2) The medical treatment guidelines require prior authorization,
(3) The services identified within the medical fee schedule is requiring prior authorization, or
(4) The prescribed service is not identified in the medical fee schedule.

WCRP 16-10(A) requires the payer notify the provider and the parties in writing of any contest to the prior authorization within seven business days from the date of receipt of the request, including a certificate of mailing.

If the prior authorization request is from an authorized treating provider and includes reasoning and relevant documentation that the treatment is related to the work injury, the payer cannot deny based on relatedness without a medical review of the request.

 

WCRP 16-10(B)(1) now requires the following for a seven-day medical records review:

  • The medical records review must be done by a physician or healthcare professional LICENSED IN COLORADO, and

  • The medical records review must be done by a provider in the SAME OR SIMILAR SPECIALTY, who would typically manage the medical condition, procedures or treatment being reviewed, and

  • The medical reviewer must be LEVEL I OR LEVEL II ACCREDITED by the State of Colorado.

 

WCRP 16(10)(E) provides that failure to timely comply with the denial requirements results in automatic authorization for payment unless:

  1. A hearing is requested within the seven business day time frame; and
  2. The provider is notified about that the request for prior authorization is being contested and the matter is going to hearing.

 

SHOW CAUSE ORDERS AND POTENTIAL PENALTIES ON RULE 16 MEDICAL RECORD REVIEWS:

WCRP 16-10(F) provides, “Unreasonable delay or denial of prior authorization, as determined by the Director or an administrative law judge, may subject the payer to penalties under the Workers’ Compensation Act.”

Recently, the Director has issued show cause orders to payers as a result of complaints by injured workers over disputes regarding medical care. The Director has issued orders requiring payers to show cause as to why a request for prior authorization was denied, when the procedure/treatment in question fell within the Colorado Medical Treatment Guidelines. The Director stated that a response that the matter is set for hearing will not suffice as “good cause” or provide a competent response to a show cause order. The Director expects a substantive response to any show cause order he issues.

Potential changes to Rule 16 that are still under consideration by the Director include: a medical review panel whose opinion regarding authorization would need to be overcome by clear and convincing evidence, and a requirement that payment be made subject to potential reimbursement in the event that a denial is upheld.

This article is intended to provide information only and not as a substitute for legal advice. If you have specific questions or cases that you would like to discuss, please contact the attorneys of Lee + Kinder, LLC for further guidance.

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