Workers' Compensation Law Alerts
Delaware
By Paul V. Tatlow, Esq. (302-552-4035 or pvtatlow@mdwcg.com)
The Employer Is Not Entitled To A Reduction In Total Disability Compensation Payments Where Following A Compensable Injury, The Claimant Resumes Working At Concurrent Employment Since The Second Job Was Not Counted In Establishing The Average Weekly Wage.
Matthew Behornar v. Standard Distributing, Inc., (IAB # 1320260)
The claimant injured his left shoulder on April 22, 2008, while working as a driver for the employer. The injury was accepted as compensable, and the claimant began receiving compensation for total disability at the rate of $503.73 per week based on an average weekly wage of $755.56. The claimant at the time of the injury had concurrent employment with the News Journal as a part-time deliverer. He told the claim adjuster on his case about the second job shortly after his injury. By July 2009, the claimant resumed working at the job with the News Journal, but he never again worked for the employer.
The employer filed a petition for reformation of the Agreement for total disability, alleging that the claimant was no longer totally disabled as of when he resumed working at the second job, and also seeking a credit for the overpayment of total disability compared to what should have been paid for partial disability. The Board denied the petition, finding no deception by the claimant and no legal basis to either reform the Agreement or award a credit for overpayment. Importantly, the settled law in Delaware (unlike some other states such as Pennsylvania) is that wages from concurrent employment cannot be considered in establishing the average weekly wage at the time of injury. The Board, based on this precedent, reasoned that it was only fair that since the wages from the second job were not counted in fixing the average weekly wage, they must likewise be ignored for purposes of later reducing those benefits. In essence, the Board referred to this as one of those uncommon situations where a claimant can be compensated for total disability while working, albeit with a different employer.
Industrial Accident Board Overturns Utilization Review Determination And Finds That Disc Replacement Surgery Was Necessary And Reasonable Treatment For The Claimant's Compensable Back Injury.
Lee McDonough v. Southern Wine Spirits Of America, (IAB # 1321348) decided 4/15/10
The claimant sustained a low back injury on May 21, 2008, which was accepted as compensable by the employer. The claimant was paid compensation for total disability and certain medical expenses. Eventually, after failing conservative care, the claimant underwent disc replacement surgery at the L5-S1 level performed by a surgeon on February 17, 2009. The employer challenged this treatment, and the Utilization Review ("UR") found that it was not within the Healthcare Practice Guidelines.
The claimant filed a Petition to determine additional compensation due, and a de novo hearing took place before the Board. The Board overturned the UR ruling and found that the disc replacement surgery was necessary and reasonable treatment. The testimony of the treating surgeon, as the claimant's expert, was accepted as credible. That testimony noted that a discogram had confirmed that the pain emanated from the L5-S1 disc. The treating doctor testified that under the Guidelines, the claimant's options were a spinal fusion or disc replacement and that he believed the disc replacement was less invasive than a fusion and had a higher success rate. The claimant testified that following the surgery, his condition was improved, and while that fact is not dispositive to the outcome, the Board found that it supported the claimant's medical expert's theory. In rejecting the testimony of the defense expert, who said the surgery did not satisfy the criteria of the Guidelines, the Board noted that he does not even perform disc replacement surgery. The Board ordered payment of the medical bills associated with the surgery as well as a counsel fees and medical witness fees.
New Jersey
By Dario J. Badalamenti, Esq. (973-618-4122 or djbadalamenti@mdwcg.com)
Enforcement Of An Eight-Year-Old Reimbursement Obligation Between Workers' Compensation Carriers Survives Equitable Estoppel And Laches Arguments.
Kathleen Patry v. West Jersey (as self-insured) and West Jersey (as insured by Insurance Carrier), Docket No. A-0843-08T10843-08T1 (App. Div., decided January 8, 2010)
The petitioner, Kathleen Patry, sustained two work-related injuries while in the employ of West Jersey. At the time of her first injury, which occurred on November 4, 1991, West Jersey was insured by an Insurance Carrier ("the Carrier"). The petitioner sustained a second injury on October 20, 1992, at which time West Jersey was self-insured and its claims were administered by a Third Party Administrator (" the TPA"). The petitioner filed Claim Petitions with the Division of Workers' Compensation, as well as a Verified Petition to Join the Second Injury Fund, alleging that she was permanently and totally disabled as a result of her two injuries with West Jersey in combination with certain pre-existing conditions.
The Carrier, TPA and the Second Injury Fund all conceded that the petitioner was permanently and totally disabled. On March 31, 1999, an Order of Total Disability was entered by the Judge of Compensation declaring the petitioner to be permanently and totally disabled under N.J.S.A. 34:15-12b. In relevant part, the Order provided that the Carrier would manage and pay for the petitioner's continued medical care and the TPA would reimburse the Carrier for 50 percent of the costs of same.
In a letter dated April 2, 1999, from the Carrier to the TPA, the Carrier inquired as to the name of the person with the TPA whom the Carrier should contact were there any questions or difficulties in obtaining reimbursement from the TPA for the petitioner's medical costs. There was no further communication between the Carrier and the TPA until an April 10, 2007, letter from the Carrier to the TPA seeking reimbursement of 50 percent of the over $1 million in costs which the Carrier had incurred to date in connection with the petitioner's ongoing medical care. The TPA did not respond to the Carrier's correspondence. On January 18, 2008, the Carrier moved to enforce the court's March 31, 1999, Order. In response thereto, the TPA filed a Certification in Opposition. Following oral argument, the Judge of Compensation granted the Carrier's Motion and on September 17, 2008, issued an Order to Enforce, instructing the TPA to bring itself into compliance with the court's March 31, 1999, Order.
On appeal, the TPA argued that the Carrier's claim for reimbursement should have been denied pursuant to either the doctrine of equitable estoppel or the doctrine of laches. The Appellate Division affirmed the Judge of Compensation's ruling. In finding that the defense of equitable estoppel was inapplicable, the Appellate Division relied on Knorr v. Smeal, 178 N.J. 169 (2003). In Knorr, the court held that equitable estoppel is designed to prevent a party from "disavowing its previous conduct where that conduct amounts to concealment or misrepresentation of material fact; where the conduct was intended to be acted upon by the adverse party; and where the adverse party does in fact rely thereon in good faith in prejudicially changing its position."
The Appellate Division found that Scibal presented no evidence that NJM either concealed or misrepresented the costs or reimbursements it sought, or that NJM wanted or should have expected Scibal to act in reliance to NJM's silence. As to the issue of detrimental reliance, Scibal had not shown that it relied on NJM's silence to its own detriment. In fact, at the time of oral argument, Scibal showed only potential prejudices which might have ensued from its reliance on NJM's silence, rather than evidence of any actual prejudice. The Appellate Division concluded that Scibal's argument that equitable estoppel bars reimbursement must fail because Scibal had not proven any of the key elements necessary for an equitable estoppel defense.
As to the doctrine of laches, the Appellate Division relied once again on Knorr. The Knorr Court held that "the doctrine of laches is invoked to deny a party enforcement of a known right when the party engages in an inexcusable and unexplained delay in exercising that right to the prejudice of the other party."
"The core equitable concern in applying laches," the Knorr Court concluded, "is whether a party has been harmed by the delay." Here, the Appellate Division found that the record was absent any such evidence of harm. "Scibal has not offered any facts to prove that it was prejudiced by NJM's eight-year silence," the Appellate Division reasoned, "and the workers' compensation court appropriately acknowledged that the passage of time alone, without evidence of prejudice, is not a sufficient basis for a laches defense."
The Composite Employment Incidents Test: When May The New Jersey Division Of Workers' Compensation Invoke Jurisdiction?
Gerald Catalano v. United Parcel Service, Docket No. A-3845-08T3 (App. Div. decided March 9, 2010)
In April of 2000, the petitioner, a resident of Staten Island, New York, applied for a full-time position with United Parcel Service ("UPS") as a package delivery driver. The petitioner's interview and requisite physical examination were conducted at UPS's Edison, New Jersey, facility which handled the application process for all Staten Island employees. On July 24, 2000, the petitioner was hired by UPS via a telephone call to his home in Staten Island. The petitioner soon underwent a mandatory 30-training period, which included a one- to two-week driving class at UPS's Tinton Falls, New Jersey, facility and on-the-job training with experienced drivers in Staten Island. Following the successful completion of his training and a probationary period, the petitioner was assigned the status of permanent employee with UPS working exclusively in Staten Island. Although the petitioner's mandatory union membership with the International Brotherhood of Teamsters was through its local in Hillside, New Jersey, he reported to his supervisors, received route assignments and job duties and picked up his paychecks at UPS's main Staten Island facility.
On October 28, 2003, and August 9, 2004, the petitioner sustained injuries to his low-back during his Staten Island route. The petitioner filed actions in the New York Division of Workers' Compensation and received temporary disability benefits and medical treatment pursuant to the New York statute. The petitioner then filed claim petitions with the New Jersey Division of Workers' Compensation for his October 28, 2003, and August 9, 2004, injuries in an attempt to obtain permanent disability benefits which are unavailable under the New York statute. UPS moved for dismissal of the petitioner's New Jersey claims for lack of jurisdiction. Following trial, the Judge of Compensation dismissed the petitioner's claims with prejudice, concluding that there was no compelling reason to invoke New Jersey's jurisdiction. The petitioner appealed, arguing that New Jersey had sufficient contacts with the employment relationship to exercise jurisdiction.
In affirming the Judge of Compensation's ruling, the Appellate Division relied on Williams v. Port Authority, 175 N.J. 82 (2003), in which the Supreme Court cited the following factors to be considered in determining whether an employee has sufficient contacts with the New Jersey Division of Workers' Compensation to warrant jurisdiction:
[1] the place where the injury occurred;
[2] the place of making the contract;
[3] the place where the employment relationship exists or is carried out;
[4] the place where the industry is localized;
[5] the place where the employee resides; or
[6] the place whose Statute the parties expressly adopt by contract.
"We are satisfied," the Appellate Division concluded, "that the composite employment incidents present a most compelling identification of the employment relationship with [the State of New Jersey.]" Here, both accidents occurred in New York; the employment contract was made in New York when the petitioner accepted the job with UPS via a phone call to his home in Staten Island; and the petitioner resides in New York. Further, all of the petitioner's route assignments and job duties emanated from UPS's main Staten Island facility. The Appellate Division found unconvincing the petitioner's argument that the Judge of Compensation should have placed greater emphasis on his assignment to a union local in Hillside, New Jersey, to establish contact with New Jersey for jurisdictional purposes. "The mere fact that the union, within its sole prerogative, assigned Petitioner to a New Jersey local," the Appellate Division reasoned, "does not detract from the clear evidence that Petitioner's employment relationship with UPS was carried out in New York."
Is Psychiatric Disability Resulting From Notice Of Termination Of Employment A Compensable Injury Under The New Jersey Workers' Compensation Statute?
Eudoxia Iatridis v. Georgeson Shareholders, Docket No. A-0284-08T, N.J. Super. Unpub. LEXIS 692 (App. Div., decided March 31, 2010)
On March 6, 2003, the petitioner slipped and fell on the premises of her employer, suffering a tear of the posterior horn of the medial meniscus of her right knee. The petitioner underwent a course of medical treatment and was cleared to return to work in or about mid-July of 2003. Despite her medical clearance, the petitioner refused to report for work, claiming that her injuries had not resolved and that she was incapable of performing her job duties. Her employment with the respondent was soon thereafter terminated.
The petitioner filed a claim against the respondent with the Division of Workers' Compensation alleging orthopedic disability arising out of the partial loss of function of her right knee, as well as depression and chronic adjustment disorder caused by her resulting inability to work. At trial, the petitioner was awarded permanent disability of the right leg. However, the Judge of Compensation determined that the petitioner's claimed psychiatric disability was not a result of an accidental injury arising out of and in the course of her employment - i.e., her right-knee injury - but, rather, was caused by the termination of her employment. As such, the Judge of Compensation found that the petitioner's psychiatric allegations were not compensable and dismissed same for failure to sustain the burden of proof. On appeal, the petitioner argued that even if her termination was the cause of her psychiatric disability, it provided sufficient grounds to give rise to a finding that her psychiatric disability arose out of and in the course of her employment.
In affirming the Judge of Compensation's findings, the Appellate Division relied on Goyden v. State Judiciary, 256 N.J. Super. 438 (App. Div. 1991) and Cairns v. City of E. Orange, 267 N.J. Super. 395 (App. Div. 1993). In Goyden, the Appellate Division held that for psychological injuries to be compensable, there must be evidence of objectively stressful working conditions which are characteristic of or peculiar to the particular workplace. The Appellate Division amplified the peculiarity aspect of this test in Cairns, a case involving allegations of psychiatric injury arising out of the receipt of a layoff notice. The Cairns' Court held that:
[B]y "characteristic of" or "peculiar to" is meant conditions that one engaged in a particular employment would view as creating a likely risk of injury that distinguishes it from the usual run of occupations. Those conditions must cause the disease as a natural incident of either the occupation in general or the place of employment.
Based on the Goyden and Cairns holdings, the Appellate Division reasoned that in the instant case the appropriate focus in assessing the petitioner's termination of employment was whether the precipitating events were peculiar to her workplace or held some essential relation to her work or its nature. The Appellate Division found that neither requirement had been met. "The risk of employment termination is so universal," the Appellate Division concluded, "and an emotional response to notice of termination so predictable, that this particular cause and effect relationship could not have been envisioned to be compensable." Accordingly, the Appellate Division held that:
[I]n the absence of evidence of a clear legislative intent to require payment of workers' compensation benefits for disability caused by varying personalized responses of employees to bona fide personnel decisions that alter an employee's work status, we are constrained to conclude that the burden of providing compensation to such employees may not be imposed upon an employer.
Pennsylvania
By Francis X. Wickersham, Esq. (or 610-354-8263 or fxwickersham@mdwcg.com) and G. Jay Habas, Esq. (814-461-7802 or gjhabas@mdwcg.com)
The Pennsylvania Supreme Court Holds That A Furlough Allowance Is Not A Severance Benefit And, Therefore, The Employer Is Not Entitled To A Credit For It Against Workers' Compensation Payments Under Section 204 (a) Of The Workers' Compensation Act.
Gary Kelly v. W.C.A.B. (US Airways Group, Inc.); 50 W.A.P. 2008; decided April 9, 2010; by Justice Baer
The claimant, a member of the passenger service employees' union, sustained a work injury to his right knee. The claimant filed a Claim Petition seeking partial disability benefits for a limited period of time and total disability benefits thereafter. For reasons unrelated to the claimant's injury, the employer had furloughed the claimant pursuant to a collective bargaining agreement ("CBA") between the employer and its passenger service employees. As a result of the furlough, the claimant began receiving a furlough allowance based on accumulated years of service. Under the terms of the CBA, the claimant had the right to be recalled to a position with the employer within four years, with seniority intact. In fact, the claimant was eventually recalled to a part-time position.
In the underlying litigation, the only issue in dispute was whether the employer was entitled to a credit for the period of time that the claimant received workers' compensation payments and the furlough allowance. The employer took the position that it was entitled to the credit under §204(a) of the Act. According to the employer, the furlough allowance was a "severance benefit," which entitled it to the credit. The claimant, however, argued that the furlough allowance was not a severance benefit due to the employer's ability to recall the claimant to work. The Workers' Compensation Judge and the Workers' Compensation Appeal Board awarded the employer the credit; however, the Commonwealth Court reversed.
The Pennsylvania Supreme Court affirmed the decision of the Commonwealth Court, finding that severance benefits are payable only when a worker's employment has been completely and permanently terminated. The Court noted that the furloughed employee is not dismissed from employment but, rather, maintains an employment relationship with the employer that is held in abeyance due to an employer's lack of work or funds. The Court said that to hold otherwise would result in an expansion of the scope of §204(a) and provide a credit for a type of benefit that does not fall within the ordinary definition of severance benefits. The Court also noted that the CBA demonstrated that the furlough allowance was created as an accrued benefit, similar to sick leave or vacation leave. The furlough allowance was something the claimant would have been entitled to regardless of whether he had been injured, and an employer cannot force the employee to bear the costs of his work-related injury by exhausting his accrued furlough allowance. It is the employer, not the claimant, which is liable for compensation for a claimant's work-related injury.
When Is "Payment" Of Compensation Made Pursuant To A Temporary Notice Of Compensation Payable So As To Require Five Days Notice To Stop Payment?
Barrett v. W.C.A.B. (Vision Quest National), No. 984 C.D.2009, filed November 5, 2009; by Judge Leavitt
This case involved the situation where a Notice of Temporary Compensation Payable was issued to a claimant along with a check in payment of the initial wage loss. The employer then decided that the injury was not disabling and issued a stop payment on the check. The claimant received the check and deposited it and did not learn of the stop payment until the bank advised her. The employer subsequently issued a Notice Stopping Temporary Compensation Payable ("NSTC") and a Notice of Denial ("NCD"). The claimant then filed a Penalty Petition, claiming that the employer violated §406.1(d)(5)(i) of the Act by failing to issue the NSTC or NCD within five days of the payment. The employer contended that it was not subject to that provision of the Act because it never issued any payment to the claimant.
The Workers' Compensation Judge and Appeal Board denied the Penalty Petition, and on appeal, the claimant argued that the Workers' Compensation Judge erred in finding that the employer did not make a "payment" to the claimant. The Commonwealth Court held there was no error as "payment" was never issued since a "payment" is conditioned upon the actual receipt of funds; if the transfer does not occur, then payment is never made.
Commonwealth Court Clarifies That A Utilization Review Challenge To Physical Therapy Treatment Need Not Name Each Individual Therapist Who Provides Treatment.
MV Transportation v. W.C.A.B. (Harrington), (Pa. Cmwlth. 2010); No. 974 C.D. 2009; filed February 25, 2010; by Judge Leavitt
Since the decisions in Schenck v. W.C.A.B. (Ford Electronics), 937 A.2d 1156 (Pa. Cmwlth. 2007), and Bucks County Community College v. W.C.A.B. (Nemes), 918 A.2d 150 (Pa. Cmwlth. 2007), employers have been faced with the challenge that a Utilization Review request must be provider-specific and does not apply to treatment rendered by providers other than the one named. In this case, the Commonwealth Court has identified an exception to that principle in the case of physical therapy treatment. Recognizing that physical therapy treatment is prescribed by a physician and may be carried out by different therapists, the court found that it is not reasonable to require an employer to name each individual therapist as a "provider." Likewise, separate UR challenges to the same course of therapy could lead to inconsistent results as to its reasonableness and necessity.
In MTV Transportation, the court held that when making a UR request for physical therapy prescribed by a doctor and administered in that doctor's facility, the employer must name the doctor prescribing the physical therapy and the facility where the claimant receives that therapy. The court noted, however, that there might be cases where the challenge is to the physical therapist's treatment itself rather than the doctor's prescription of it. Likewise, the court's rationale should apply to physical therapy not provided at the doctor's facility. This holding is significant as it allows a single UR challenge to physical therapy treatment rather than multiple reviews of treatment from different therapists.
A Workers' Compensation Judge's Decision Crediting Medical Testimony That Included A Description Of Injury Beyond That Described In The Notice Of Compensation Payable Is Binding In A Subsequent Termination Petition.
Paz y Mino v. W.C.A.B. (Crime Prevention Association), No. 41 C.D. 2009; filed February 26, 2010; by Judge Cohn Jubelirer
In this case, the Commonwealth Court reinforced the recent Supreme Court decision in Cinram Manufacturing, Inc. v. W.C.A.B. (Hill), 975 A.2d 577 (Pa. 2009), that a Workers' Compensation Judge may expand the scope of the accepted injury without a Claim Petition where there was an inaccuracy in the identification of injuries at the time the employer issued the Notice of Compensation Payable. The court held that a Workers' Compensation Judge's finding in a Termination Petition that implicitly expands the description of injury by crediting medical testimony as to additional injuries are binding in a subsequent Termination Petition.
In that case, the employer had filed a Termination Petition, which was denied, and the Workers' Compensation Judge's decision credited the employer's physician that the work injury aggravated the claimant's pre-existing spinal stenosis as well as L4-5 radiculopathy. In a subsequent Termination Petition, a different Workers' Compensation Judge granted the petition without considering that the prior Workers' Compensation Judge's decision had implicitly enlarged the description of injury to include the additional injuries. On appeal, the court ruled this was error and remanded the petition.
Of note is that the court also held that a carrier could obtain an offset against future compensation owed for the amount of wage loss benefits paid when it did not know that the employer continued to pay the claimant's salary as to permit the claimant to receive both payments is unjust enrichment and an impermissible double recovery.
The Medical Provider's Failure To Provide The URO With The Password To Access Encrypted Medical Records Does Not Satisfy The Requirement Of Section 127.464 To Provide The URO With The Claimant's Medical Records.
Shaw v. W.C.A.B. (Melgrath Casket Co.), 1871 C.D. 2009; filed April 21, 2010; by Judge Cohn Jubelirer
The Commonwealth Court affirmed a decision of the Workers' Compensation Appeal Board that a medical provider's mailing of a CD-ROM with the claimant's complete records, whose contents were inaccessible to the URO due to an encrypted password that was not provided to the URO, fails to satisfy the requirement of Section 127.464 of the Bureau regulations that the medical provider under review supply the medical records of the claimant.
The medical provider sent the CD-ROM to the URO in a timely fashion but failed to include the password that would permit the records to be reviewed. The URO called the doctor's office twice to report that the CD could not be downloaded and that the doctor had to provide paper medical records. The doctor failed to respond to the call. The URO returned the unviewed CD-ROM to the doctor but made no further attempts to call the doctor. Without the claimant's medical records, the URO issued a determination under Section 127.464(a) that the healthcare was unreasonable and unnecessary because the doctor failed to supply the requested records.
On appeal, the claimant argued that the medical provider satisfied the requirement to supply the claimant's medical records within 30 days of the request and that it was the URO's failure to request the password to the records that precluded their review. The court noted that the regulations clearly imply that the medical provider must supply medical records in a useable format that allows the URO to engage the review process. The purpose of the regulations is thwarted if a medical provider fails to send useable and readable records to the URO. The doctor was found to have acted unreasonably in failing to inform the URO of the password and in not returning the calls about the encrypted records.
Employer Subject To Penalty For Continuing Nonpayment Of Medical Expenses While Litigating Petition To Review URO That Found Medical Treatment Reasonable And Necessary.
Scranton School District v. W.C.A.B. (Carden); 1567 C.D. 2009; filed March 12, 2010; by Judge Butler
The employer challenged the imposition of a penalty for violating the Act for failing to pay medical bills which were determined by a Utilization Review to be reasonable and necessary during the time that the employer's UR Review Petition was in litigation. The employer argued that Section 306(f.1)(5) of the Act specifically provides for suspension of payment to medical providers if the employer disputes the reasonableness and necessity of the treatment. The Board and the court rejected this position, holding that Sections 127.208(e) and 127.208(g) of the regulations specifically provide that the insurer shall pay the disputed treatment if the URO determines that the medical treatment is reasonable and necessary, and additionally holds that the filing of a petition for review does not further suspend the obligation to pay for the treatment. The court noted that the interpretive regulations are given controlling authority unless clearly erroneous, which is not the case since they were viewed by the court to be consistent with the statute.
