April 9, 2012: Kansas Workers’ Compensation Law Update.
1. Results Of The 2012 Kansas Legislative Session.
As of April 9, 2012, while the Kansas Legislative Session for 2012 is not technically completed, it appears that there will be no significant substantive changes to the Kansas WC Act by the 2012 Legislature. The significant pro-employer revisions enacted in 2011 (see July 7, 2011 update below) remained intact, and are starting to work their way through the WC litigation system with actual administrative decisions (see discussion below) with great results for employers, TPA’s and carriers!
2. Several Initial Preliminary Hearing Appeals Board Decisions Are Effectuating On The Pro-employer Changes In Kansas’ 2011 Reform Laws, And The Results Are Dramatic And Favorable For Employers And Carriers.
Several initial Kansas Workers Compensation Appeals Board decisions interpreting and applying the 2011 Reform Laws bear out the sea change of outcomes for employers, TPA’s and carriers doing business in Kansas. Below are several examples.
RECKLESS VIOLATION OF SAFETY RULE/REGULATION DEFENSE:
Price v. Robert Todd Baker d/b/a Sunshine Lawn & Tree Service, Docket No. 1,058,417 (February 21, 2012). Claimant was a tree trimmer and sustained injury when he fell out of a tree hitting a power line and then falling to the ground. The employer provided claimant with safety equipment including a safety harness, lanyard and rope. Claimant appeared to be an experienced climber and was seen in the days prior to the accident, properly using the safety equipment. A supervisor testified that the owner had caught claimant on one occasion not using the safety equipment, and reprimanded the claimant. The employer denied claimant’s entitlement to workers compensation benefits because just after the accident, claimant was caught with his safety equipment in a position evidencing he had not been using it just prior to the fall; therefore the fall was caused by claimant failing to properly use his safety equipment.
New law K.S.A. 44-501(a)(1) provides:
Compensation for an injury shall be disallowed if such injury to the employee results from … (D) the employee’s reckless violation of their employer’s workplace safety rules or regulations. (Emphasis supplied)
The Administrative Law Judge (ALJ) awarded compensation over the employer’s defenses applying “pre-reform law” principles and old law case precedent. Basically the ALJ refused to grant the employer’s defense because the employer failed to prove that the claimant’s actions in failing to use the safety equipment did not amount to a “willful” refusal to use the safety equipment. This is in fact the way the vast majority of cases were decided under the “old law” statutory language, with the employer never able to effectuate on the defense because the hurdle to achieve the defense was place so high by the application of the requirement that the employer had to prove that the claimant’s refusal to use the safety equipment was “willful.” In practice, this “willfulness” proof requirement necessary to succeed on the old law defense was almost like having to prove the employee intended to injure himself – a threshold almost never impossible for an employer to prove.
On appeal to the Kansas Workers Compensation Appeals Board, the ALJ’s compensability award was reversed and all compensation was denied for purpose of preliminary hearing. The Appeals Board member writing the decision correctly cited to the “new law” provision quoted above and consulted other Kansas appellate court decisions for an interpretation of the proof requirements under the word “reckless.” “Reckless” conduct has been defined as conduct that shows a realization of the imminence of danger and a conscious and unjustifiable disregard of that danger. The Appeals Board member applied this lesser standard to the employer’s defense and concluded under the facts that claimant’s act of failing to use the provided safety equipment constituted a reckless violation of the employer’s workplace safety rule concerning the use of safety equipment. All compensation was denied for purposes of preliminary hearing.
Analysis of the application of this new “reckless disregard” defense: The Price case summarized above illustrates the pro-employer sea change taking place in Kansas under our 2011 reform laws. Claimant Price made a conscious decision not to use the safety equipment his employer safety rules required him to use, which resulted in him sustaining personal injury on the job. Why should the employer in this case be punished by having to pay workers compensation benefits when the cause of the accidental injury was the claimant’s conscious choice to not use the safety equipment provided by the employer? Under the “old law” principles and concepts existing in Kansas before our 2011 reforms, claimant Price would have surely been awarded benefits and the employer would consequently be penalized by having his business costs go up, simply because this claimant made the conscious decision to not use safety equipment the employer provided him, which if used, would have prevented the accident from happening. The purpose and intent of the 2011 reforms was in part to bring back some reason and sanity to Kansas workers compensation, and the Price case illustrates that the Appeals Board is in fact applying those reforms as intended.
PREVAILING FACTOR CAUSE DEFENSE:
In Lowrey v. USD 259, Docket No. 1,056,645 (November 21, 2011), claimant alleged he fell off of a ladder hitting and injuring his left knee. Claimant denied preexisting left knee problems or treatment, and the employer agreed it could not prove claimant suffered from prior left knee injury or pain. However, a post accident MRI of the left knee was reviewed by the authorized treating doctor, and he opined in a written report (but was not deposed) that in addition to a meniscus tear, claimant clearly had some degenerative changes going on in the left knee as shown on MRI. The doctor also wrote: “I explained to him that this is pre-existing…”
Kansas’ new reform laws contain multiple new references to a new medical causation standard (prevailing factor cause) which replaces the old “simple aggravation” rule. Under the old law “simple aggravation” rule, the only thing the claimant had to prove was that the work accident caused some “aggravation” of a pre-existing condition. This “simple aggravation” rule was almost impossible for employer’s to defend against, and prevail.
New law K.S.A. 44-508 now specifically requires the claimant must prove that the work accident is the prevailing factor causing the injury, medical condition, and disability or impairment. “Prevailing” as it relates to the term “factor” means the primary factor in relation to any other factor.
The ALJ in Lowery awarded preliminary hearing compensation benefits including the cost medical treatment, without any analysis or application of the new law statutory proof requirement that the work accident must be the prevailing factor cause of the need for treatment.
On appeal, the Appeals Board member reversed the ALJ’s award of benefits, and denied all compensation benefits including medical treatment for purpose of preliminary hearing. The basis for the denial of benefits was that claimant failed in his burden of proof of proving that the work accident was the prevailing factor cause of the need for medical treatment.
Analysis of the application of this new “prevailing factor cause” defense: The Lowery case summarized above illustrates another sea change of Kansas workers compensation – the death of the “simple aggravation” causation rule. Prior to the new reform law “prevailing factor cause” defense, it was virtually impossible for an employer to prevail on a defense that the work accident did not really cause “an injury” because the “injury” proof requirement was met by the claimant simply testifying that the work accident caused “an aggravation” of a pre-existing condition (no pain before, but pain now after the work aggravation). There is absolutely no question under the “simple aggravation” test that the outcome of claimant Lowery’s preliminary hearing would have been different, and he would have received a preliminary award of benefits. However, with the new law prevailing factor cause proof requirement, the Lowery outcome suggests to Kansas claimants that they better come to court with at least some credible medical evidence or opinion that the work accident was the prevailing or primary factor cause of the need for medical treatment, or risk that their claim will be denied for failure to meet the burden of proof requirement. This is a huge and significant pro-employer change arising from the 2011 reform laws.
3. New Director Of Workers Compensation Appointed.
Anne Haught was recently appointed to replace former Director Larry Karns, as the new Kansas Director of Workers Compensation. Anne replaces former Director Karns and continues the task of properly and fairly administering the Kansas Division of Workers Compensation in its implementation of the new law reforms.
July 7, 2011: Kansas Workers’ Compensation Law Update.
1. Results Of The 2011 Kansas Legislative Session.
Significant new pro-employer workers’ compensation law reforms passed the Kansas Legislature in 2011 and were signed into law by Governor Sam Brownback. Sweeping new pro-employer workers’ compensation laws went into effect in Kansas for dates of accident or repetitive trauma occurring after May 15, 2011.
In essence, the new law reforms sweeten the pot at the finish line for claimants by modestly increasing our maximum benefit caps (for example lifetime permanent total cap went from $125,000 to $155,000 – relatively speaking, still a very low perm total exposure). However, the new law reforms contain many new defenses which will likely act as hurdles preventing many more claimants from getting to that finish line.
In short, fewer claimants will successfully establish compensable claims, but those that do, could see slightly more money in the end. For employers and carriers, while there will be increased litigation costs on the short term effectuating all the new defenses, over the long term, these new law reforms will likely reduce the overall number of claims and costs for employers.
These new statutory reforms legislatively reverse the holdings of four prior appellate court decisions discussed in previous Kansas Law Updates found below: Casco, discussed below in the May 17, 2007 update was reversed by these new law reforms (this change is one of the few that is pro-employee); Bergstrom, discussed below in the September 25, 2009 update, was reversed by the new law reforms (this reform law reversal is really good for employers); and both the Redd and Mitchell cases discussed in the October 5, 2010 update, were also reversed by the new law reforms (again these new law reform reversals are pro-employer changes).
It is strong suggested that any employers, adjusters, claims professionals consult with legal counsel regarding assessing compensability and exposure of all Kansas claims with dates of accident or repetitive trauma occurring after May 15, 2011. It is a whole new ballgame in Kansas after May 15, 2011 and the changes are so sweeping and comprehensive that professional assistance is required to benefit from all the new changes.
A very brief list of some of the most significant changes includes:
- Multiple new compensability defenses including but not limited to: new definitions for accident, injury and repetitive trauma which will provide new proof requirements for injured workers; sweeping new causation defenses (prevailing factor test) which heighten the worker’s proof requirements to establish compensability; new defense where worker’s injury results from reckless violation of employer’s work place safety rules and regulations; new beefed up horseplay/fighting on the job defense; new lack of timely notice rules; new easier to establish drug/alcohol impairment defense affording more chance of success for a complete denial of benefits.
- New private insurer and self-insured employer obligation to issue written notice to all workers receiving TEMPORARY disability compensation benefits concerning fraud.
- Multiple new defenses related to preexisting conditions, impairments and prior work restrictions which allow employers/carriers more opportunity for compensation denials, subtractions and offsets.
- Multiple new defenses for employers against TTD liability where the worker has voluntarily terminated or been terminated for cause or refused accommodated work.
- Increased importance and legal support of authorized treating physician opinions over worker’s hired gun doctor opinions in TTD entitlement context.
- New average weekly wage calculation method and rules.
- New limits on, and increased proof hurdles for, workers try to establish permanent total disability compensation.
- New permanent partial disability compensation rule for calculating value of bilateral carpal tunnel syndrome and other bilateral injuries – reversing Casco decision.
- Multiple new defenses to work disability compensation claims including higher hurdles (new minimum impairment threshold) for worker to claim work disability entitlement, and elimination of work disability compensation for undocumented workers.
- Enhanced methods for employers to get slow moving or dormant cases dismissed.
- Significant new defenses to future medical benefits exposure and new ways to get future medical liability cut off.
- Several pro-worker new law changes including modestly increased benefit caps, elimination of the timely written claim statute of limitation and conversion of bilateral carpal tunnel type cases back to a general body disability allowing for work disability compensation potential.
2. New Director of Workers Compensation appointed: Larry Karns, one of the drafters of the pro-employer new law reforms, was appointed Kansas Director of Workers Compensation. This really concludes the “pro-employer” sweep of a new pro- employer set of laws, and a new pro-employer administrator to see that the new law reforms are properly and fairly administered and implemented.
October 5, 2010: Kansas Workers’ Compensation Law Update.
1. Results Of The 2010 Kansas Legislative Session.
In summary, there were no substantial changes to the law by the Kansas Legislature in 2010. The 2010 Kansas Legislative Session ended much like 2007, 2008 and 2009 with no significant legislative change or amendments to the Kansas Workers’ Compensation Act. Labor groups and the claimants’ bar continue to push to increase Kansas’ low benefit caps. Business and industry sought to decrease the cost of workers’ compensation. There were competing bills introduced, but nothing significant was passed. The end result was no legislative change favoring either side. The pro-business Republican 2010 Legislature did not aggressively move to try to change laws in favor of employers because the current Governor is a Democrat, and would likely have vetoed any sweeping reforms. That scenario is likely to change in the 2011 legislative session. Kansans will likely elect U.S. Senator Sam Brownback as the new Governor in the upcoming November 2010 election. If this occurs as is expected, both the House and Senate will be controlled by Republicans and the Governor will be Republican. Many in Kansas are projecting that this is the optimum political environment and opportunity for employers to pass pro-business legislation which would most certainly be signed into law by the next Governor. Stay tuned for updates after the 2011 legislative session ends as there most likely will be good news for employers in Kansas.
2. Significant New Legal Changes In 2010 Continue To Come From The Kansas Supreme Court.
Two recently released Kansas Supreme Court opinions will likely continue to push employer workers compensation costs up. Last year’s update regarding the Bergstrom case predicted increased employer settlement and award disability compensation costs. While there are no official statistics published yet, most employers, observers and practitioners would agree that the effect of the Bergstrom decision discussed in 2009’s update increased employer settlement and disability compensation award payments.
Two new decisions issued by the Kansas Supreme Court in September, 2010 will likely continue to push up employer workers compensation costs. These new decisions are very lengthy and space allows for only a very brief summary.
In the most pro-claimant outcome, the Kansas Supreme Court in Redd v. Kansas Truck Center, No. 101,137 (September 10, 2010), ruled that for multiple injuries to a single scheduled member (such as a wrist and elbow surgery on the same arm) the workers compensation judge must now make separate awards for each injury to that scheduled member. The practical result of this decision is that before a wrist and elbow injury would be computed based on a combined impairment to the full arm. Now, instead of one award for both injuries to the full arm, there will be two separate awards issued from the one accident. It is possible that in some fact situations, this new “multiple award” decision will actually compute to a lower actual cost to the employer. Employers and adjuster are cautioned to seek advice of counsel to update exposure estimates on currently pending and new scheduled injury claim.
Redd also set forth a new rule regarding $50,000 “functional impairment cap.” The new rule says that the cap does not apply where the worker has been paid even the slightest amount of TTD benefits. Thus, in certain circumstances, an employer will want to carefully evaluate potential challenges to TTD benefit entitlement where the claimant is a high wage earner and potentially subject to future application of the cap.
Finally, Redd clarified that the new “appellate standard of review” for the appellate courts which allows for more scrutiny of the fact findings of the Workers Compensation Appeals Board applies to Board decisions issued after July 1, 2009. For any appeals to the Court of Appeals or Supreme Court from Board decisions issued prior to July 1, 2009, the more limiting “substantial competent evidence” standard from the old statute is still applicable.
Turning then to the other new Kansas Supreme Court decision in Mitchell v. Petsmart, Inc., No. 99,528 (September 10, 2010), we find a “mixed benefit” opinion from the Court with elements that are both favorable and unfavorable to employers. The pro-employer ruling in Mitchell is the smack down by the Supreme Court of the often championed argument by claimants that the administrative regulation (K.A.R. 51-7-8) which allowed for, in the computation of permanent disability compensation benefits, a subtraction of the number of weeks of TTD benefit already paid to the claimant. The claimant’s bar has for several years tried to argue for a statutory interpretation that would effectively allow for double-dipping – taking TTD benefit weeks and then also taking PPD compensation for those same weeks. The Kansas Supreme Court affirmed the position long held by employers and carriers that the regulation preventing double dipping is clearly within the authority granted by the statutory language.
The remaining two Mitchell rules are characterized here as negative to employers and carriers because they fly in the face of the plain language of the workers compensation act and will likely increase employer and carrier defense litigation costs because they will increase workers compensation litigation costs. The first of these two rulings is the re-establishment of the “bright-line rule” for determining date of accidental injury in repetitive use micro-trauma injury claims such as carpal tunnel syndrome cases. The re-established “bright-line rule” for determining date of accidental injury is “the last date worked.” At first glance this would appear to be a helpful clarification of the very confusing and cumbersome statutory legal test. The problem is that this new “bright-line rule” for determining date of accidental injury is not found in, and is contrary to, the plain language of the statutory test. So, the administrative law judges are now faced with the decision, in every repetitive use injury case, of deciding which rule to follow – the “bright-line rule” of last date worked as provided by the Mitchell decision, or the plain language of K.S.A. 44-508(d) which does not contain as one of the choices, the last date worked, as a date of accidental injury. Clearly this will cause less certainty and more litigation.
The other carrier unfriendly language in Mitchell which is likely to increase defense litigation costs is the language purporting to create a new barrier for carriers to litigate their disputes as to liability for payment of benefits in the workers compensation litigation. The purported new rule is that where there are two or more carriers with separate coverage periods spanning the claimed repetitive use injury claim, those carriers will now be forced to take their “carrier verses carrier” dispute to the local district court for determination. Workers compensation judges are purportedly allowed to issue “joint and several liability” orders against multiple carriers in a claim. The result is that both carriers are jointly and severally liable for all the benefits ordered paid to the claimant. This can, and likely will, create significant confusion and problems for carriers in assessing their exposure and reserves. There are also multiple potential pitfalls to good companies who are assessed joint and several liability with not-so-good companies who are chronically late or tardy in paying benefits. It is totally conceivable that Insurance Company A which diligently pays its compensation claims will be assessed penalty awards for the late payments of Insurance Company B. Furthermore, to try to get out from this situation, Insurance Company A must purportedly file a separate action in a state district court to adjudicate its liability to pay benefits to claimant. The obvious first question is where did this new rule come from and what statutory authority exists for a compensation judge to order “joint and several liability?” The answer is that there is no statutory authority in the plain language of the Kansas Workers Compensation Act and, in fact, the Kansas Supreme Court technically dodged this question in the Mitchell decision saying that the precise issue of statutory authority for joint and several liability was not properly raised and preserved by the parties in Mitchell. In summary, this joint and several liability exposure combined with the directive to take your carrier verses carrier disputes to district court is bound to create new and additional confusion and litigation in currently pending and new workers compensation repetitive use injury claims.
3. Update On Kansas’ Move To Mandate ODG Guidelines.
The 2009 update below, asked the question of whether Kansas was on the verge of mandating the ODG (Official Disability Guidelines). The answer in 2010 was no, Kansas did not mandate use of the ODG in workers compensation.
As reported below, it appeared in late 2009 that a push was being made to mandate the use of the ODG through the Kansas Medical Fee Schedule update. However, it turned out that the push to “mandate” use of the ODG did not go forward and was not included in the January 1, 2010 Kansas Medical Fee Schedule update. Any move to “mandate” use of the ODG in Kansas will likely occur via legislative changes in 2011. Stay tuned for updates after the 2011 legislative session.
4. New Interim Kansas Director Of Workers Compensation.
In September, 2010, Kansas Division of Workers Compensation Director, Paula Greathouse, resigned and Assistant Director Seth Valerius was appointed as Interim Director to replace her.
September 25, 2009: Kansas Workers’ Compensation Law Update.
1. Results Of The 2009 Kansas Legislative Session.
In summary, there were no substantial changes to the law by the Kansas Legislature in 2009. The 2009 Kansas Legislative Session ended much like 2008, with no significant legislative change or amendment to the Kansas Workers Compensation Act. Labor groups and the claimants’ bar attempted to increase Kansas’ low benefit caps. Business and industry attempted to hold the line and avoid any legislative roll back of the Kansas Supreme Court’s sweeping 2007 employer friendly strict constructionist decision in the Casco case, discussed below in the 2007 summary. The end result was no legislative changes favoring either side. The predominantly pro-business Republican 2009 House and Senate resisted any attempts to amend the workers compensation laws so as to avoid any change in the law which would have the effect of increasing workers compensation costs to Kansas businesses, as they are already struggling in tough economic times.
2. SIZZLING HOT NEW TOPIC IN KANSAS – New judicially created increase in permanent disability compensation exposure for employers and carriers under Kansas law.
On September 4, 2009 the Kansas Supreme Court issued a sweeping decision in Bergstrom v. Spears Manufacturing Company et. al. (http://www.kscourts.org/Cases-and-Opinions/opinions/supct/2009/20090904/99369.htm) which will have an immediate impact on current exposure estimates in many pending, and future, general body disability injury cases. The Kansas Supreme Court’s split decision in Bergstrom continues the same analytical movement departing from prior judicial precedent via a re-examination of previous statutory construction efforts, similar to what was seen in the 2007 Casco decision (discussed below). However, the practical outcome of this version of the judicial statutory construction tsunami is the opposite of the outcome of Casco – Casco created an immediate reduction in work disability compensation exposure for employers, whereas Bergstrom will likely create an immediate increase in the work disability compensation exposure for employers.
Highly summarized, Bergstrom was a production janitor for a manufacturer of plastic plumbing parts. She sustained a back injury (general body disability claim) after picking up a heavy garbage can. Her employer tried to provide her with accommodated work within her restrictions after her injury.
Unfortunately, claimant continued to experience pain during the several attempts to return to work and on the last attempt was only able to work three hours and then had to quit, according to her, due to the pain caused by the accommodated work activities. She left work and was subsequently terminated by the employer.
The ALJ initially awarded a permanent total disability award ($125,000). The Appeals Board ultimately reduced this permanent total award to a much smaller dollar award limited to claimant’s 10% functional impairment, on the rationale that Bergstom did not make a “good faith effort” to continue working in the accommodated position provided by the employer. The Bergstrom majority threw out the “functional impairment” only award of the Board, and remanded the case back to the Board for what is likely to be a significant increase in the permanent disability compensation award owed by the employer.
The rationale of the Bergstrom majority was that the functional only award by the Board relied on the same inaccurate assumption made by previous judicial interpretations, that the work disability statute contained an implicit “good faith job search effort” requirement on the injured worker. The majority opinion stated that it could not find anywhere in the plain language of the work disability statute, a “good faith” requirement imposed upon claimants by the legislature. The majority opinion noted that the plain language of the statute contains no explicit requirement from the legislature that claimants are required to attempt to work or look for work.
This of course raises the question, to even the most casual observer, of to what degree the Kansas Supreme Court now expects the Kansas legislature, when writing or amending statutes, to set forth explicitly in the plain language of the statute, basic societal norms and applicable common law principles. Here the obvious societal norm is a mitigation of damages requirement – that workers are expected to be able to show a good faith effort in returning to work before asking for an award of benefits because they are not working.
Common sense would appear to dictate that at some base level, the Kansas Supreme Court should allow certain commonly agreed to societal norms and legal principles to be “read into” statutes, including the societal norm that able bodied individuals are expected to work and if they voluntarily choose to avoid work, even the “plain language” of our laws should not be read to allow or require the disability compensation system to reward behavior amounting to sloth. The Bergstrom majority’s analysis and “strict constructionist” fervor appear to divorce the application of common sense from the act of construing statutory language.
According to the Bergstrom majority decision, the Court will not read into the statute something not readily expressed therein. The dissenting opinion written by Chief Justice McFarland expressed the view that the result of the judicial exercise of statutory construction analysis must always occur in the context of respect for the established judicial principle of stare decisis (adherence to judicial precedent so as to promote stability and predictability in the law). Chief Justice McFarland asserted that the majority opinion “cavalierly” overruled a 15-year-old statutory construction that the law implicitly requires of a claimant “a good faith job search effort” for no other reason than it (the current Court majority) would have interpreted the statute differently had if been faced with the issue in the first instance.
The immediate effect of this decision is to require all employers and carriers to reevaluate their current and future exposures to pending work disability compensation awards. For those employers and carriers in the midst of defending a case on the basis that the claimant did not make a good faith effort to seek employment or accept a light duty accommodated job offer within the restrictions, those defenses may now be useless, and the exposure to benefits much higher.
It is anticipated by most observers that the 2010 Kansas Legislature will now be asked by business and industry interests to look into possible statutory revisions which will re-impose a good faith requirement on claimants. It is also anticipated that labor interests will counter this with resistance at re-imposing the good faith requirement, and at the same time ask the legislature for a long overdue increase in overall benefit compensation caps. The clear conclusion is the next legislative session is likely to include multiple opposing and competing demands from polar opposite interest groups, all in the context of a continued strained economic environment. Stay tuned for more updates on this topic!
3. H1N1 Flu Virus – Employers Get Ready To Respond To Possible Workers Compensation Claims Arising From Claimed Employer Exposure To The H1N1 Flu Virus.
QUESTION: Are employees who contract H1N1 flu virus entitled to workers compensation benefits under Kansas law?
ANSWER: Probably not, depending upon the facts. The defense would argue the claim would fall under the Occupational Disease (OD) Act. In Kansas, prerequisites to a compensable OD claim include: 1) The condition is not an ordinary disease of life to which the general public is or may be exposed outside of the particular employment and which only generally exposes the employee in the work environment; 2) Exposure from a work environment where there is attached a particular and peculiar risk of such disease which distinguishes that employment from other occupations and employments, and where the risk of getting the disease is greater than the otherwise general risk of getting the disease, and 3) That the disease was actually contracted while engaging in work activity.
THEORIES OF COMPENSABILITY TO WATCH FOR: (1) Accidental injury theory that there is a distinct single traumatic exposure and there is some neutral or increased risk associated with the employment that makes the exposure to H1N1 work related. (2) Occupational Disease theory which focuses on the “means of transmission” in making the exposure to the H1N1 virus occupational.
4. Is Kansas On The Verge Of “Mandating” Use Of The “ODG” (Official Disability Guidelines)?
Is Kansas on the verge of “mandating” the use of the Official Disability Guidelines? The “Official Disability Guidelines” as announced by the Work Loss Data Institute, are the prevailing evidence-based authority on expected disability and appropriate medical treatment in workers’ compensation and non-occupational disability cases.
A December 19, 2007 Work Loss Data Institute public relations release proclaimed: “The Kansas workers’ comp regulatory agency, the Department of Labor, Division of Workers’ Compensation (DWC), has adopted Work Loss Data Institute’s “Official Disability Guidelines – Treatment in Workers’ Comp (ODG) as the standard of reference for evidence-based medicine used in caring for injured workers.” (Emphasis supplied).
The Kansas Division of Workers’ Compensation web site has posted, as of this date, the following statement concerning the ODG: “The Official Disability Guidelines – Treatment in Workers Compensation (ODG), published by the Work Loss Data Institute (WLDI), is to be recognized as the primary standard of reference, at the time of treatment, in determining the frequency and extent of services presumed to be medically necessary and appropriate for compensable injuries under the Kansas Workers’ Compensation Act, or in resolving such matters in the event a dispute arises.” (Emphasis supplied).
The above rather “mandatory” sounding description on the Division’s web page of what Kansas “recognizes” concerning the ODG, does not entirely square with what the Kansas Statutes, Administrative Regulations and published Fee Schedule currently have to say on the subject.
First, there is no reference or mention anywhere in Kansas Workers Compensation Act or Kansas Administrative Regulations relating to workers’ compensation, to Kansas adopting or recognizing the ODG. Second, if one goes to the current 2008 Kansas Medical Fee Schedule (next to be revised January 1, 2010), one finds on page two, itemized paragraph number “10” the following statement regarding the ODG: “The Official Disability Guidelines-Treatment in Workers Compensation (ODG) that is published by the Work Loss Data Institute (WLDI) has been adopted as the primary standard of reference for evidence-based medicine used in caring for injured workers. Medical treatment guidelines are not requirements, nor are they mandates; they are to provide advice to help those who make health care decisions regarding the care of injured workers.” (Emphasis supplied).
Clearly the Fee Schedule paragraph quoted above has a specific statement indicating that the ODG is not a requirement or a mandate; instead it is merely advisory. This language means anyone in Kansas can chose to use the ODG, or ignore the ODG. As a practical matter in workers compensation litigation before administrative law judges across the State of Kansas, the ODG has not been a source or reference typically used or consulted to assist in the adjudication of medical disputes between employers and claimants before Kansas workers’ compensation administrative law judges. However, this may be about to change.
At the September 2009 Annual Division of Workers’ Compensation Seminar, there was significant buzz among attendees concerning whether there will be some attempt in the final version of the soon to be revised Kansas Medical Fee Schedule which will go into effect January 1, 2010, to change the current “ODG is only advisory” language, to language making the ODG “mandatory” and “required.” Another avenue to watch for change is whether proposals will be submitted in the upcoming legislative session to add statutory changes to the Workers Compensation Act explicitly mandating and requiring the use of the ODG in Kansas Workers Compensation. Stay tuned for more updates on this topic!
May 17, 2007: Kansas Workers’ Compensation Law Update – Significant 2007 Pro-Employer Change To Kansas Workers’ Compensation Law From The Kansas Supreme Court, But Not From The Kansas Legislature.
1. Results of the 2007 and 2008 Kansas legislative session.
The 2007 and 2008 Kansas Legislative Sessions ended with no significant legislative change or amendment to the Kansas Workers’ Compensation Act. Controversial provisions put forward in past legislative sessions by both management and labor went nowhere in 2007 or 2008.
2. The 2007 Kansas Supreme Court dramatically reverses its 1931 decision of Honn v. Elliott, 132 Kan. 454, 295 Pac. 719 that was the foundation for the “parallel injury rule” that for 76 years served as the basis for bilateral upper-extremity and lower extremity disabilities to be compensated as a general body disability, instead of separate scheduled disabilities.
In Casco v. Armour Swift-Eckrich, 283 Kan. 508, 154 P.3d. 494 (2007 Kan. LEXIS 235), the Kansas Supreme Court issued a dramatic reversal of its own precedent, abandoning the 76 year old “parallel injury rule” that originated from its 1931 decision in Honn v. Elliott. In summary, the practical significance of Casco is it will likely result in an immediate and significant reduction in the disability compensation cost for employers of many pending and future bilateral upper-extremity and lower-extremity claims.
In place of a detailed technical legal analysis of the sweeping Casco decision, this limited discussion will focus on the likely practical effect this new change in the law will have on your existing and future bilateral upper-extremity and lower-extremity disability claims.
But first, in an effort to quell the shrill “sky is falling” cries from the claimant’s bar, that the Casco decision has tilted the earth off its axis, and eviscerated the essential “grand compromise” forming the basis for the entire Kansas Workers Compensation Act, remember what Casco does not change. Casco does not change the unlimited lifetime right to payment of all causally related, reasonable and necessary, medical expenses, for all bilateral upper and lower extremity injuries, free of any co-payments or deductibles for injured workers. Casco does nothing to ease the burden on employers of the cost of lifetime medical expenses for these injuries. What the Kansas Supreme Court has said Casco will accomplish is bringing everyone back to a point that was originally intended by the legislature when it established the “schedule” of disabilities as the general rule, and “non-scheduled disabilities” (general body disabilities) as the exception for permanent partial disability compensation.
As a practical matter, the real issue involved here is whether “work disability” compensation benefits are available to injured workers with bilateral upper and lower extremity injuries. Prior to Casco, the routine bilateral carpal tunnel syndrome injury to a high wage earner in Kansas, such as a highly paid aircraft industry worker who does not return to work after the injury, would typically expose the employer to a maximum $100,000.00 permanent partial general body “work disability compensation” award. Under Kansas law, a general body disability award qualifies at minimum for an award based on the functional impairment, but that functional impairment percentage is but the compensation floor, for the potential ultimate compensation award. Work disability compensation far in excess of the amount generated by the functional award would become available to the injured worker if he/she was not working at the time of the regular hearing, and that loss of employment was due to their bilateral carpal tunnel injury and disability.
A common pre – Casco 2007 work disability compensation award for a high wage aircraft or other industrial worker with bilateral carpal tunnel syndrome, which generates a 10% whole body impairment rating from the doctor, where the worker could not return to work after being issued permanent work restrictions, would be something similar to the following benefit computation: 415 maximum weeks of compensation x 50% work disability = 207.5 compensable weeks x $483 maximum compensation rate = $100,222,50. This amount would automatically be reduced down to the $100,000.00 cap for any permanent partial general body disability.
While upper-extremity injuries generate “scheduled disabilities” under the Kansas statute, following the 76 year old pre – Casco “Honn precedent,” workers compensation administrative law judges would never have given the time of day to an argument by an employer that permanent disability compensation for bilateral carpal tunnel syndrome should be limited to that available to two separate scheduled disabilities. The pre – Casco bilateral carpal tunnel syndrome awards would have almost always been calculated based on the much more economically generous general body work disability compensation entitlement formula.
After Casco, that same aircraft worker with a bilateral carpal tunnel syndrome injury with a functional impairment rating of 10% to each upper-extremity would likely receive something similar to the following permanent disability compensation benefit computation: Right Upper-Extremity: 190 maximum weeks x 10% impairment = 19 compensable weeks x $483 maximum weekly compensation rate = $9,177.00; Left Upper-Extremity: 190 maximum weeks x 10% impairment = 19 compensable weeks x $483 maximum weekly compensation rate = $9,177.00. Adding together the right and left awards would result in a total permanent scheduled disability compensation award of $18,354.00.
In summary, this hypothetical illustrates that the pre – Casco bilateral carpal tunnel syndrome disability compensation award would likely cost the high wage paying employer $100,000.00 in permanent disability compensation benefits; whereas, under the Casco separate schedule disability compensation award, the same set of injuries would cost the employer $18,354.00.
One post Casco caveat regarding single injury (as opposed to repetitive micro-trauma injury) bilateral carpal tunnel and other similar combination extremity disability claims – under the plain language of the Kansas permanent total disability compensation statute, such combination disability claims could potentially, under certain fact situations, be