TTH eNotes: Workers’ Compensation: February 2020
February 03, 2020
SIGNIFICANT PENNSYLVANIA CASE SUMMARIES
Pittsburgh Steelers Sports, Inc. v. WCAB (Trucks), No. 1257 C.D. 2018, reported (Pa. Cmwlth., filed Jan. 3, 2020, Brobson, J.)
By Lee Ann Rhodes, Esquire
In a reported opinion, the Commonwealth Court held that a professional football player was not considered to be a seasonal employee, as the terms of his contract included off-season responsibilities and provided for payment in the form of a yearly salary for performance of all such obligations, rather than payment only during the regular season.
Background: Claimant entered into an NFL Player Contract with the employer, Pittsburgh Steelers, on January 7, 2008. Claimant’s contract spanned two football seasons and was intended to begin on the date of execution, March 1, 2008. The contract prohibited claimant from playing football or engaging in any football related activities outside of his employment. Claimant filed a Claim Petition on August 4, 2011, alleging that he sustained a work-related injury to his left shoulder on August 8, 2008, during a football game in the course and scope of his employment. During litigation, the parties agreed to the scheduling of a mandatory mediation. At the mediation, the employer agreed to accept liability for claimant’s work injury and, as a result, the only remaining issue for the Judge to decide was the proper method of calculating claimant’s average weekly wage. The Judge subsequently issued a decision granting claimant’s Claim Petition. The Judge awarded claimant disability benefits in the amount of $807.00 per week, based upon an average weekly wage of $4,000.00, as calculated under Section 309(c) of the Act.
Both parties appealed the Judge’s decision to the Appeal Board. The Appeal Board issued a decision, affirming the Judge’s decision in part, modifying the decision in part, and remanding the matter to the Judge to make additional findings regarding the date of claimant’s disability and the description of claimant’s work injury. The Board affirmed the Judge’s decision with respect to the conclusion that claimant’s average weekly wage to be calculated pursuant to Section 309(c) of the Act and not Section 309(e) of the Act. (Section 309 (c) of the Act addresses the calculation of the AWW of employees whose wages are fixed by the year, while Section 309 (e) addresses the calculation of the AWW of seasonal employees.) The Board modified these calculations, in finding that the Judge should have divided claimant’s annual salary by 52 (and not 50) in order to yield an average weekly wage of $3,846.56. The Board noted that this modification did not change claimant’s compensation rate, as it would still be the maximum compensation rate of $807.00 per week. On remand, the Judge issued a Decision and Order dated February 11, 2016, which was consistent with her first decision. The employer appealed to the Board, alleging that the Judge incorrectly calculated claimant’s average weekly wage and the resulting total disability benefit rate. The Board, without addressing the merits of the appeal, remanded this matter to a different Judge on the basis that the evidentiary record was incomplete. (In a footnote, the Commonwealth Court noted that the initial Judge hearing this case had retired, so the matter was reassigned to a different Judge.) On remand, the parties agreed that the record was complete. The Judge closed the record and subsequent issued a decision on September 12, 2017. The Judge granted claimant’s Claim Petition and directed the employer to pay the claimant temporary total disability benefits at the rate of $807.00 based upon an average weekly wage of $3,846.15. In reaching this determination, the Judge found that the claimant’s proposed calculations as modified by the Board reflected a more accurate assessment of claimant’s average weekly wage as it more accurately and realistically measured what claimant could have expected to earn, had he not been injured. Both the employer and claimant appealed the Judge’s decision to the Board, which affirmed the Judge’s decision.
Legal Analysis: On Appeal to the Commonwealth Court, the sole issue was whether the Judge and the Board committed an error of law by calculating claimant’s average weekly wage pursuant to Section 309(c) of the Act. The employer maintained that claimant’s average weekly wage should have been calculated pursuant to Section 309(e) of the Act, because claimant could not possibly play football throughout the year and was, therefore, to be considered a seasonal employee. The employer, relying upon a prior decision by the Commonwealth Court in Ross v. WCAB (Arena Football League), 702 A.2d 1099 (Pa. Cmwlth. 1997), appeal denied, 724 A.2d 937 (Pa. 1998), argued that it was found that all professional football players are seasonal employees. Claimant maintained that the Board properly calculated his average weekly wage pursuant to Section 309(c) of the Act.
The Court first addressed the issue of whether claimant should have been considered a seasonal employee. The Court found that previous case law has held that seasonal occupations logically are those vocations which cannot, from their very nature, be continuous or carried on throughout the year, but only during fixed portions of it. The Court noted that the issue of whether a professional football player is a seasonal employee for purposes of Section 309(e) of the Act has previously been determined. In a prior decision, the Commonwealth Court concluded that the claimant, who also had signed an NFL contract, was a seasonal employee. In coming to this conclusion, the Court had considered the terms of the claimant’s NFL Player’s Contract which provided in part that the player’s obligations began at the start of the pre-season training camp and lasted until the regular season was complete, that the player could not engage in off-season employment with other football teams, that the players was to be compensated after the completion of each game, and that the player was not compensated outside of the regular season. In the prior decision, the Court reasoned that the prohibition from playing football with other entities restricted the claimant from playing football throughout the year and was evidence that the claimant was a seasonal employee. The Court cited a second decision, which dealt with a claimant who served as an arena football league player. In that decision, the Court also found that the claimant was a seasonal employee.
In the instant case, the Court found that they could not agree with the employer’s contention, based upon the prior decisions, that all professional football players are seasonal employees. The Court found that in the instant case, it had to consider the facts and terms of this claimant’s contract to determine whether this particular claimant was a seasonal employee. In that regard, the terms of employment with respect to the claimant’s contract covered two football seasons, beginning March 1, 2008 and ending on February 28, 2010 or February 29, 2010. The Court noted that claimant’s performance obligations under the contract also required him to attend all mini camps, official pre-season training camp, all meetings and practice sessions, all pre-season, regular season and post season football games, including any all star football games sponsored by the NFL. Claimant was also required to cooperate with the news media and to attend 10 assigned appearances per year on behalf of the team. By terms of the contract, claimant was also prohibited from playing football outside of his employment. The Court reasoned that in the two previous cases, it concluded that the claimants were seasonal employees because the claimants could only play football during fixed periods of time and that the claimants were prohibited from engaging in football outside of the league during the regular or off-season, and that the claimants began to receive compensation only after playing in a regular season game and therefore were only compensated during the regular season. The Court found that in the instant case, the claimant was not regulated to performing obligations during a fixed or definitive period of time. The claimant in the instant case had mandated attendance at numerous appearances, and was required to cooperate with the news media. The Court reasoned that this claimant was not limited to the performance of these activities during the regular football season.
The Court further reasoned that the lack of seasonal limitations with respect to the performance of claimant’s obligations indicated that claimant’s employment was not seasonal. The Court noted that in the instant case, the contractual terms seemed to assert control over the claimant outside of the regular season. The Court found that this was “evident” in light of the multitude of activities claimant and other football players are expected to engage in, including the mandated appearances and cooperation with the media. With respect to claimant’s compensation, the Court found that the claimant in the instant case was to be paid a yearly salary in exchange for performance of all obligations under the contract which included media appearances, the performance of which was not limited to the regular football season. The Court reasoned that the fact that compensation was received only throughout the regular season did not limit players’ obligations to the regular season especially where, as in the instant case, the player was explicitly paid for performance of all obligations under the contract. The Court reasoned that the claimant in the instant case was contracted to receive payment in weekly or biweekly installments, not just playing each regular season game. The Court further found that the terms of the contract indicated that claimant was not a seasonal employee, but an employee whose wages were fixed by the year. The Court found that the Board did not commit an error or law by calculating claimant’s average weekly wage pursuant to Section 309(c) of the Act. Accordingly, the decision of the Appeal Board was affirmed.
Takeaways: The decision of the Court in this case does appear curious, particularly in light of the two previous decisions of the Court, which also dealt with professional football players. The Court seemed to go out of its way in this case, to find that the claimant was not a seasonal employee. As outlined above, the Court made great efforts to look very closely at the terms of the claimant’s contract, particularly with respect to any and all obligations of the claimant outside of the football field and with respect to the method of payment of his salary. Given the fact that the Court took great effort to distinguish the instant case from its two prior decisions, one has to wonder if the Court would make further distinctions in a future case, if the terms of the individuals’ player’s contract was, in fact, different from the instant matter.
Any questions regarding this case can be directed to Lee Ann Rhodes at LRhodes@tthlaw.com.
Morrissey v. WCAB (Super Fresh Food Markets, Inc.), No. 486 C.D. 2019, unreported (Pa. Cmwlth., filed Jan. 9, 2020, McCullough, J.)
By Joseph J. Shields, Esquire
In an unreported decision, the Commonwealth Court affirmed the decision of the WCJ, which was affirmed by an Order of the WCAB, finding that Claimant’s Review Petition was untimely filed because it was filed more than three years after the date of her last payment of partial disability benefits.
Background: Claimant suffered a work-related injury on July 19, 1996 described as a lower back strain. Claimant underwent an IRE performed on September 14, 1998 which found that Claimant suffered from a whole percent impairment of 10%. An Impairment Rating Determination Face Sheet was filed with the Bureau on October 19, 1998. On October 11, 2006, the employer issued a Notice of Change of Workers’ Compensation Disability Status on Form LIBC-764 informing Claimant that her disability status had changed to partial status beginning on July 21, 1998 based upon the September 14, 1998 IRE. On February 10, 2014, Claimant filed a Review Petition seeking to amend the NCP to include additional injuries. Claimant subsequently filed a second Review Petition alleging, inter alia, that because LIBC-764 was not filed until October 11, 2006, the effective date of the change in status should be October 11, 2006 rather than July 21, 1998 and that she was further entitled to 500 weeks of partial disability benefits as of October 11, 2006. Claimant testified that her partial benefits ended in 2008, and that she had not received any compensation benefits since that time. Claimant further testified that she was represented by an attorney at the time she received LIBC-764 and was aware that her benefits would cease 500 weeks following the 1998 IRE. The WCJ dismissed the Review Petition as untimely because it was filed more than three years after her last payment of disability benefits. Claimant appealed and the WCAB affirmed, as has the Commonwealth Court.
Legal Analysis: On appeal, Claimant argued that LIBC-764 must be filed before the 500-week period of partial disability benefits begins to run. Claimant further argued that because the employer did not file LIBC-764 until October 11, 2006, and 500 weeks after that date is June 1, 2016, her Review Petition was timely. The Commonwealth Court cited to Section 413(a) of the Act, which states that a WCJ may modify, reinstate, suspend, or terminate a notice of compensation payable … upon petition filed … if the petition is filed with the department within three years after the date of the most recent payment of compensation made prior to the filing of such petition. Section 123.105(d) of the Pennsylvania Code provides that the insurer shall provide notice to the employee on Form LIBC-764 of a change in status based upon an IRE.
The Commonwealth Court held that Section 413(a) was clear that Claimant needed to file her Review Petition within three years of the last payment of benefits, which was not done here. Claimant did not file the Review Petition until approximately six years after her last receipt of compensation benefits, making the Review Petition untimely.
The Court further rejected Claimant’s argument that the filing of LIBC-764 is a condition precedent to modifying benefits based upon an IRE, as there is no law, regulation or case that supports this contention. Finally, the Court rejected Claimant’s argument that the 500-week period should not begin to run until the Employer filed LIBC-764 on October 11, 2006 due to the humanitarian purposes of the Act. The Court found, per Claimant’s testimony, that Claimant was fully aware that her benefits would end in 2008 due to the 1998 IRE.
Any questions regarding this case can be directed to Joseph J. Shields at 570-820-0240 or JShields@tthlaw.com.
Vottero v. WCAB (Softboss and Safeguard Systems & SWIF), No. 612 C.D. 2019, unreported (Pa. Cmwlth., filed Jan. 9, 2020, Ceisler, J.)
By Timothy R. Kraeer, Esquire
The Commonwealth Court addressed the applicability of the subrogation provisions of the Act (Section 319) to the claimant’s recovery under the employer’s uninsured motorist (UM) policy and whether the appeal board correctly applied Pennsylvania law, as opposed to Delaware law under these facts.
Background: Claimant, a Pennsylvania resident, was injured in a motor vehicle collision with an uninsured vehicle during the course and scope of his employment. His employer, a Delaware corporation, accepted liability for the injury and provided medical and wage loss benefits to the claimant pursuant to Pennsylvania workers’ compensation provisions. The claimant resolved his workers’ compensation claim by way of compromise and release in the amount of $70,000. Employer reserved its subrogation rights pursuant to Section 319. In addition to his workers’ compensation claim, the claimant also filed an action in Delaware against the employer’s UM carrier and subsequently received an arbitration award of $325,000. $149,627.58 of claimant’s award was escrowed to protect employer’s subrogation interest.
Employer filed a Petition to Review Compensation Benefit Offset asserting its right to satisfaction of its lien. Claimant argued that the law of Delaware applied because his action was filed in Delaware and the UM policy was issued in Delaware. He posited that Delaware law does not provide for statutory subrogation against a UM recovery and that Section 319 applies only to recoveries against a third party.
The WCJ found that Pennsylvania law applied because claimant was a Pennsylvania resident, employed by an employer that conducted business in Pennsylvania and all litigation of claimant’s workers’ compensation benefits occurred in Pennsylvania, including the C&R that preserved employer’s subrogation right. The WCJ granted employer’s petition. The WCAB affirmed.
Analysis: Claimant’s first argument to the Commonwealth Court centered on claimant’s interpretation of Section 319 as applying only to third parties, or from the party that directly caused claimant’s injuries. The court began by reviewing the plain language of the statute and determined that the court had previously construed the language to permit subrogation from both “direct recoveries from third party tortfeasors as well as recoveries paid on behalf of or for the liability of that third party,” here the UM carrier. Claimant in effect argued to the Commonwealth Court that the UM carrier did not cause his injuries and thus Employer may not assert a subrogation lien against his UM recovery. The court determined that claimant did not raise this particular issue in his appeal to the WCAB and therefore waived that issue.
Next, the court analyzed the choice of law question. The court restated that “when faced with the issue of which state’s law should govern the disposition of a matter, a court may apply the policy of the jurisdiction most intimately concerned with the outcome of the particular litigation.”
Further, the court recognized that a state’s contacts to a particular case are measured on a qualitative scale, and “the most significant, and likely determinative, contact is the [workers’ compensation] law the parties have utilized.” Claimant argued that because his action was instituted in Delaware and because the UM policy was issued in Delaware, Delaware law must apply. Conversely, the employer argued that the more significant contacts are with Pennsylvania, including that the employer conducts business in Pennsylvania and holds a workers’ compensation policy issued in Pennsylvania issued by a Pennsylvania carrier, and all litigation surrounding the claimant’s workers’ compensation benefits occurred in Pennsylvania.
In analyzing the contacts, the court noted that all litigation related to the claimant’s receipt of workers’ compensation benefits was governed by Pennsylvania workers’ compensation law, employer conducts business in Pennsylvania and engaged the services of SWIF, a Pennsylvania carrier and the claimant resides in Pennsylvania. The court noted the only Delaware contacts included the UM policy issued in Delaware and the Delaware civil action filed by claimant.
On balance of the contacts identified, the court held that Pennsylvania law was the correct choice and that the employer is entitled to subrogation pursuant to Section 319 affirming the decision of the WCAB.
Takeaway: When a choice of law question arises in the context of an employer’s right to subrogation pursuant to section 319, the court will utilize a contacts test and focus on the quality of the contacts, not just the number of contacts. This will necessarily involve a case by case factual analysis. However, it’s clear that a claimant cannot escape an employer’s subrogation rights solely by collecting a UM insurance recovery from a policy issued in another state.
Any questions regarding this case can be directed to Tim Kraeer at TKraeer@tthlaw.com.
JBS USA Holdings, Inc. v. WCAB (Vazquez), No. 1660 C.D. 2018, unreported (Pa. Cmwlth., filed Jan. 24, 2020, Cohn Jubelirer, J.)
By Christopher L. Scott, Esquire
In an unreported decision, the Commonwealth Court made two holdings, based upon cross-appeals from the Workers’ Compensation Appeal Board. First, the Court held that a stabbing at work did not meet the standard of “personal animus” under Section 301(c)(1) for exclusion from being compensable. Second, the Court held that mere financial support to a non-biological child is not sufficient to award benefits to that child on a fatal claim petition.
Background: In February 2015, Danny Vasquez was fatally stabbed by a co-worker, who was criminally charged in the incident that led Mr. Vasquez’s widow to file for survivor benefits — which the employer, JBS USA Holdings Inc., denied, claiming that the murder was related to a “personal animus” and not work-related.
In ruling in favor of the widow and three “dependent” children, the workers’ compensation judge (WCJ) said [the assailant] showed signs of being “emotionally unstable” and ruled that “there was no evidence of record, either before this court or during the criminal proceedings, that there was any personal animosity between [the assailant] and Decedent. In fact … Employer’s own witnesses testified that [the assailant] and Decedent appeared to work well, were observed laughing and joking and often helped each other during the course of a workday.”
The Workers’ Compensation Appeal Board (WCAB) affirmed the ruling of the WCJ, in part, by granting death benefits to the widow, but reversed on the issue of benefits awarded to a non-biological child of decedent. The WCAB stated that Mr. Vasquez “needed to stand in loco parentis to” the child. The WCAB found “the record is complete devoid of any evidence to establish that [Mr. Vasquez] intended to function as the child’s [father]”.
Both the employer and the widow appealed to the Commonwealth Court, which affirmed the WCAB as to both issues.
Legal Analysis: Personal Animus: On appeal, Employer argued that an injury, to be compensable, must have occurred within the course of employment “but an injury caused by an act of a third person intended to injure the employe because of reason person to him, and not directed against him as an employe or because of his employment” is not compensable. The Commonwealth Court previously instructed in LeDonne v. WCAB (Graciano Corp.), 936 A.2d 124, 129 (Pa. Cmwlth. 2007), that the so called “personal animus” exception is a very heavy burden upon the employer.
Before the WCJ, there was testimony from six different witnesses that all testified they did not observe any problems between Mr. Vasquez and his assailant. The only incident between the assailant and Mr. Vasquez occurred earlier that same morning when the assailant, for unknown reasons, jumped on top of Mr. Vasquez while he was sitting in a chair at work. Further, the Court held that assailant’s statements to the police that Vasquez was “messing with [him] for years” and that “[s]omeone told [assailant] that [Vasquez] broke into [assailant’s] locker and took pictures of [assailant]”, even if true, were connected to work activities to stem from personal animus.
In short, the Court affirmed the original holdings of both the WCAB and the WCJ that the Employer failed to meet its heavy burden to show that the assailant killed Mr. Vasquez for reasons personal to him and unrelated to work.
Dependency: Decedent’s widow filed a cross appeal on behalf of her child, a non-biological child of decedent, arguing that the WCAB’s reversal of the award of benefits was in error. Under the WC Act, compensation is available to children of the decedent and the term “children” is defined to include “step-children, adopted children and children to whom [decedent] stood in loco parentis.” Here, the child at issue was not a step-child nor an adopted child. The Commonwealth Court found that Ms. Vasquez did not meet her burden to show that Mr. Vasquez stood in loco parentis for this child.
The Court looked to case law to define what the term “loco parentis”. The indicia utilized included “disciplining, preparing meals, engaging in leisure activities, selecting clothing and obtaining medical care”, over and above the “mere voluntary assumption of financial support.” Hertz Corp. v. WCAB (Johnson), 724 A.2d 395, 397 (Pa. Cmwlth. 1999).
While the WCJ found that Mr. Vasquez did claim the child on his tax return and was the sole source of financial support for the child, the Court concluded that this evidence was insufficient to warrant an ward of benefits where the record was completely devoid of the other factors regarding whether he was in loco parentis for this child.
Takeaway: It is even clearer from JBS USA that the burden to prove the affirmative defense of “personal animus” in the workplace is a heavy one and to prevail, an employer will need to clearly show that the impetus for attack needs to be completely separated from employment. In regard to children of decedents who are not natural born children, step-children or adopted children, a showing will need to be evidence and a record made that there was more than just financial support given to the child. There will need to be evidence that decedent acted like a parent with care, time and attention in order for there to be an award of benefits. Employers may be able to defend by showing a lack of care, time and attention to a minor child.
Any questions regarding this case can be directed to Christopher Scott at CScott@tthlaw.com.
Workers’ First Pharmacy Services, LLC v. Bureau of Workers’ Compensation Fee Review Hearing Office (Gallagher Bassett Services), No. 901 C.D. 2018, reported (Pa. Cmwlth., filed Jan. 16, 2020, Leavitt, P.J.).
By Justin D. Beck, Esq.
In a reported opinion, the Commonwealth Court held that an insurer had wrongly refused to pay for an injured worker’s compound cream prescription, as the work injury had been accepted and no utilization review was filed pertaining to the treatment, and that, accordingly, a fee review petition filed by a pharmacy was not premature.
Background: There, the claimant had been injured in 2016, with the same recognized by the employer via a Medical-Only Notice of Temporary Compensation Payable (which presumably converted to a Medical-Only Notice of Compensation Payable). In June 2017, the pharmacy dispensed a compound cream to the claimant, billing the employer $4,869.99. The employer subsequently denied payment for the stated reason that the “diagnosis [was] inconsistent with the procedure.” Thereafter, in August 2017, the pharmacy filed a fee review application.
In the interim, the claimant and the employer pursued litigation related to the work injury; in May 2017, the claimant filed a penalty petition, alleging that benefits had been unilaterally stopped as of January 2017 (n.b. it is never explained why benefits were stopped) and in June 2017, the employer filed a termination petition, alleging a full recovery. Also in July 2017, the claimant filed a review petition, seeking to amend the controlling description of injury contained in the NTCP. In the course of those proceedings, the parties resolved the claim via a compromise and release agreement, which was approved by the WCJ in August 2017.
However, in October 2017, the Bureau’s Medical Fee Review Section acted upon the pharmacy’s fee review petition which had been filed the same day as the C&R was approved. The Medical Fee Review Section held that the employer was obligated to reimburse the pharmacy $4,455, plus interest. The employer requested a de novo hearing, arguing that the compound cream had never been adjudicated as related to the work injury, and thus, the pharmacy’s fee review application was premature. Concluding that liability for the compound cream had never been established by either the employer’s acceptance or a determination by a WCJ, the Hearing Office determined that the pharmacy’s fee review petition was premature. The Hearing Office thus vacated the Medical Fee Review Section’s fee determination and dismissed the employer’s request for a hearing.
The pharmacy appealed to the Commonwealth Court, which has now vacated and remanded.
Legal Analysis: On appeal, the pharmacy argued that (1) the Hearing Office erred in dismissing the employer’s request for a hearing, as its fee petition was not premature in light of the fact that the employer had not requested utilization review of the treatment; and (2) a violation of due process resulted where the pharmacy had no mechanism to challenge the employer’s refusal to reimburse it for the compound cream. Moreover, in a supplemental brief requested by the court, the pharmacy posited that Armour Pharmacy II established that the Hearing Office may address the threshold question of whether a compound cream is related to an accepted work injury. Notably, although the court offered no analysis with regard to this latter argument, it is clear that the same was not found to be persuasive.
The court began its analysis by noting that, pursuant to Section 301(f.1)(5) of the Act, “all payments to providers for treatment provided pursuant to [the Act] shall be made within thirty (30) days of receipt of such bills and records unless the employer or insurer disputes the reasonableness or necessity of the treatment….” Further, “a provider who has submitted the reports and bills required … and who disputes the amount or timeliness of the payment from the employer or insurer shall file an application for fee review with the department no more than thirty (30) days following notification of a disputed treatment or ninety (90) days following the original billing date of treatment.”
The court further indicated that, pursuant to Section 301(f.1)(6) of the Act, an employer may challenge the reasonableness or necessity of a particular treatment, and may suspend payment to the provider during such time period. However, such process does “not decide” the “causal relationship between the treatment under review and the employe’s work-related injury.” 34 Pa. Code § 127.405(a). Indeed, the fee review process presupposes that liability has been established. 34 Pa. Code § 127.251. In Nickel v. WCAB (Agway Agronomy), 959 A.2d 498 (Pa. Cmwlth. 2008), the court had held that a fee review is premature where: (1) the insurer denies liability for the alleged work injury; (2) the insurer has filed a request for utilization review; or (3) the 30-day period allowed for payment has not yet elapsed.
Turning to the matter before it, the court indicated that liability for the claimant’s work injury had already been established. Pursuant to Crozer Chester Medical Center v. Department of Labor and Industry, Bureau of Workers’ Compensation Health Care Services Review Division, 22 A.3d 189 (Pa. 2011), to question liability for the compound cream treatment, the employer could have filed a modification petition to “change the scope of the accepted work injury” or sought utilization review. However, the employer had done neither. The court emphasized that “[the claimant] may be under treatment for an array of medical problems, only some of which relate to the work injury. It is for the Utilization Review Organization to sort this out.” Curiously, the court rejected the employer’s denial of payment of the basis that the “diagnosis is inconsistent with the procedure,” characterizing this as “just another way of stating that the compound cream was not a reasonable or necessary ‘procedure’ for treating the claimant’s ‘diagnosis,’ i.e., a shoulder sprain.”
The court held that the Hearing Office had erred, as the employer’s non-payment did not fit any of the three exceptions to the rule (identified above) that it must pay an invoice within 30 days. Moreover, the employer had not filed a modification petition to revise the claimant’s accepted work injury, and did not seek utilization review. The employer had, however, expressly accepted liability for the claimant’s work injury in the nature of a right shoulder strain both in the NTCP and C&R Agreement. While the employer contended that the compound cream was not related to the accepted shoulder sprain, and that its liability must be established in a claim petition proceeding, the court rejected such reasoning, holding instead that the work injury had been accepted, limiting the sole question to “whether the compound cream was reasonable and necessary for treatment of the accepted work injury.” This, it stated, was an issue for utilization review.
For these reasons, the court found that the employer was obligated to seek utilization review upon receipt of the pharmacy’s invoice, which would have suspended its liability. It concluded that the Hearing Office had erred in finding the pharmacy’s fee review petition premature, as the employer had accepted liability for the work injury and failed to challenge the reasonableness or necessity of the compound cream at issue. Accordingly, the court vacated the determination of the Hearing Office that the pharmacy’s fee review petition was premature and remanded for a decision on the merits of the fee review determination.
Takeaway: The outcome of the case appears to have turned on the court’s questionable proclamation that, “if the compound cream was prescribed for a non-work-related injury of Claimant, a fortiori it is not reasonable or necessary for treatment of her accepted work injury.” This statement might reasonably be criticized as conflating the separate and distinct concepts of (1) causal connection; and (2) reasonableness and necessity – with the latter operating only in the sphere of established or presumed causal relationship. Accordingly, and until further clarification is provided by either the Commonwealth or Supreme Courts, it is submitted that carriers and employers should continue to follow their current protocols where denying payment of medical bills on either causal connection or reasonableness and necessity grounds, as the longevity and/or integrity of the court’s holding remains uncertain.
Any questions regarding this case can be directed to Justin D. Beck at JBeck@tthlaw.com or (412)-926-1441.
SIGNIFICANT NEW JERSEY CASE SUMMARIES
Vincent Hager v. M&K Construction, A-0102-18T3 (N.J. Super. Ct. App. Div. 2020).
By Deborah B. Richman, Esquire
In a case immediately approved for publication, the Superior Court, Appellate Division has affirmed the ruling of a Judge of Workers’ Compensation ordering that a respondent must reimburse a petitioner for purchase of medical marijuana prescribed for chronic pain due to a work-related injury.
Background: In 2001, Vincent Hager, Petitioner, was injured at work on a construction site when a truck delivering concrete dumped its load onto him. He underwent treatment to his lower back, including a 2003 lumbar laminectomy and decompression and a 2011 two-level lumbar fusion. He was prescribed a myriad of opioids and pain medications including OxyContin, Oxycodone, Valium and Lyrica. The medications did not control Petitioner’s “chronic debilitating pain” as Petitioner’s pain management doctor opined that his long-term opiate medications had likely caused hyperalgesia (excessive sensitivity to pain) and that he would be unable to return to work in any capacity in the future. As an alternative to the opioid treatment, Petitioner started treating with a hospice and palliative care physician who is also certified by the State of New Jersey to prescribe medical marijuana. Petitioner was approved for the medical marijuana program. The medical marijuana provided some relief from his incessant pain, he was sleeping better and he had stopped taking Oxycodone. Petitioner was paying $616.00 out-of-pocket per month for two ounces of marijuana. He petitioned the court to order Respondent to reimburse him for his out-of-pocket costs for the medical marijuana. The Judge ordered Respondent to reimburse Petitioner for the cost of the medical marijuana and any related expenses.
Respondent appealed arguing that the Judge could not order Respondent to reimburse Petitioner for medical marijuana because the Federal Controlled Substances Act (CSA), 21 U.S.C. § 841, which makes it a crime to manufacture, possess or distribute marijuana, preempts the New Jersey Compassionate Use of Medical Marijuana Act (MMA), N.J.S.A. 24:6I-1 to -29, because it is impossible to comply with both statutes. Respondent further argued that the Judge’s order violates the CSA because it requires Respondent to aid and abet Petitioner’s possession of an illegal substance; that the workers’ compensation carrier should be treated like a private health insurer, which is not required under the MMA to cover the costs of medical marijuana; and, the Judge erred in failing to consider whether medical marijuana is a reasonable and necessary form of treatment under the Workers’ Compensation Act.
Legal Analysis: The Superior Court, Appellate Division affirmed the Judge’s decision. It considered the Supremacy Clause of the U.S. Constitution, finding that because the order does not require Respondent to possess, manufacture or distribute marijuana, but only to reimburse Petitioner for his purchase of medical marijuana, there is no conflict between the CSA and MMA. Furthermore, Respondent’s compliance with the order does not establish the requisite intent and active participation necessary for an aiding and abetting charge as Respondent is not purchasing or distributing the medical marijuana on behalf of Petitioner. As Respondent is not a private health insurer, the plain language of the MMA does not exclude the workers’ compensation carrier from reimbursing the cost of medical marijuana. Finally, the Court found that it was evident that the Judge weighed the alternative legal modalities of treatment available to Petitioner.
Takeaway: Is the reimbursement of a petitioner’s out-of-pocket costs for medical marijuana a legitimate work-around which removes any positive conflict that would trigger preemption, or is reimbursement for purchase of a Schedule 1 controlled substance under the CSA essentially the same as the workers’ compensation carrier paying the medical marijuana bill directly? In approving the decision for publication, the Superior Court, Appellate Division has created binding precedent of the former and therefore the case is almost certain to be considered by the Supreme Court due to the substantial constitutional question involved regarding the conflict preemption issue under the Supremacy Clause of the U.S. Constitution.
Questions regarding this case can be directed to Deborah B. Richman, Esquire, at (215) 564-2928 or DRichman@tthlaw.com.
The Plastic Surgery Center v. Malouf Chevrolet-Cadillac, Inc., (A-78/79/80-18) (082502).
By Deborah B. Richman, Esquire
The Supreme Court of New Jersey has affirmed the ruling of the Superior Court, Appellate Division that medical providers have six years to file Medical Claim Petitions.
Background: In 2012, the Legislature amended N.J.S.A. 34:15-15 to grant the Division of Workers’ Compensation exclusive jurisdiction over medical provider claims for payment of services rendered to injured employees. Because the Legislature was silent on the statute of limitations to bring same, it remained unsettled until now how long medical providers had to bring their claims. Prior to the amendment in 2012, medical providers filed such claims in Superior Court and had no obligation to participate in their patients’ pending workers’ compensation cases. As the medical claims were filed in the Superior Court, medical providers enjoyed a six year statute of limitations for suits on contracts. Since the Legislature changed the jurisdiction of the medical provider claims to the Division, it was questionable whether medical providers were subject to the same two year period in which petitioners could bring a claim, or continued to enjoy the six year statute of limitations for suits on contracts. The Superior Court, Appellate Division held that the statute of limitations was six years. Respondents filed Petitions for Certification with the Supreme Court of New Jersey which were granted by the Court.
Legal Analysis: The Supreme Court in a per curiam opinion, affirmed the Superior Court, Appellate Division substantially for the reasons set forth in the lower court’s opinion. Because the Legislature remained mute on the issue of the statute of limitations of bringing medical claim petitions within the Division, the Court looked to legislative intent. It determined that the fact that the Legislature did not simply express that the Act’s two year time bar would apply to medical provider claims is persuasive of its more likely intent to leave the time limit as it was: six years. Further, the Court determined that to assume the statute of limitations for claimants, two years from the date of injury, would be nonsensical, with the result that the window in which medical providers would be able to assert their claims would sometimes expire before their claims accrued. The Court acknowledged that it is not unlikely that an employee might be treated by a medical provider for a period greater than the two year period following the work injury, or not even begin treatment with the medical provider until two years had passed. The Court also nixed the idea that the two year time limit on medical provider claims should begin on the date of service rather than the date of the claimant’s injury as it is contrary to the plain and unambiguous language of N.J.S.A. 34:15-51.
Take Away: Now that the statute of limitations for medical claim petitions has been defined as six years from the date of service, defendants may see an increased demand for payment on older dates of service and potentially an increase in the number of Medical Claim Petitions filed.
Questions regarding this case can be directed to Deborah B. Richman, Esquire, at (215) 564-2928 or DRichman@tthlaw.com.
SIGNIFICANT NEW JERSEY STATUTORY DEVELOPMENT
New Law Requires All Insurance Carriers and Self-Insured Employers Paying a Formal Dependency Award for Public Safety Workers to Provide Information to the New Jersey Division of Workers’ Compensation-Office of Special Compensation Funds Regarding the Identities and Contact Information of Said Dependents and the Correct Calculations For the Supplemental Benefits
By Deborah B. Richman, Esquire
On June 17, 2019, N.J.S.A. 34:15-95.6 was signed into law, which provides supplemental benefits to the dependents of public safety workers. A public safety worker is defined as a member, employee, or officer of a paid, partially-paid or volunteer of a police department, force, company, or district, including the State Police or a first aid or rescue squad. The supplemental benefits are to be paid by the Second Injury Fund.
The law requires all insurance carriers and self-insured employers responsible for the payment of workers’ compensation death benefits to the dependents of public safety workers to provide the NJ Division of Workers’ Compensation – Office of Special Compensation Funds with the identities and current mailing address of those dependents, with a copy of the formal award of dependency benefits and the calculation of the supplemental benefits to be paid by the Second Injury Fund, no later than the 60th day after the date on which it is determined that the payment of supplemental benefits to these dependents is required. Public Safety Worker Data Summary Forms have been posted on the Division’s website for completion to assist in this process.
Failure to timely provide the requested information, including the correct calculation of benefits, to the Office of Special Compensation Funds resulting in an incorrect amount of benefits, shall result in the insurance carrier or self-insured employer’s liability for payment of the supplemental benefits. It is also the responsibility of the insurance carrier or self-insured employer to obtain all Social Security benefit information before completing the calculation for supplemental benefits. To aid and assist in the calculation of benefits, a Supplemental Benefits Calculation Form has been posted in the Division’s website.
The new legislation only provides for payment of supplemental benefits to dependents who were formally awarded dependency benefits by a Judge of Workers’ Compensation in New Jersey. The Second Injury Fund will not pay supplemental benefits to those dependents receiving a voluntary tender of dependency benefits directly from the insurance carrier or self-insured employer unless the payments are converted to a formal award by a Judge.
Any questions can be directed to Deborah B. Richman at 215-564-2928 x 8502 or at DRichman@tthlaw.com.