March 2012 Workers’ Compensation Law Update

Dr. Donovan and Friends!  Organized Crime In The Workers’ Compensation System?

Allstate Insurance Company and its affiliates recently filed suit against a number of providers.  William Donovan, M.D., Lorenzo Farolan, M.D., Omar Vidal, M.D., David Dent, D.O., Northshore Orthopedics Association, and Memorial MRI are on the hot seat.  The claims asserted are for racketeering, conspiracy, and fraud.  The complaint alleges that certain law firms and chiropractors associated with them referred patients to the defendants’ enterprise, which converted minor soft-tissue bodily injury claims into major medical claims through inter-enterprise referrals.  The plaintiffs claim that patients were referred to Memorial MRI for MRIs, which were reviewed by a specified radiologist, who embellished the findings to justify referral to Northshore Orthopedics for neurodiagnostic testing (conducted by a specified neurologist, who also embellished the results to justify additional testing and procedures), additional MRIs, surgical injections including ESIs, and additional orthopedic consultations, typically ending with a surgical recommendation.  The suit is currently pending in the U.S. District Court for the Southern District of Texas in Houston.

Watch this case!!  Case To Proceed Against Carrier For Obstruction of Workers’ Comp Claim

The Federal 8th Circuit Court of Appeals ruled that an employee may proceed on a suit against an employer and it’s workers’ compensation carrier for the intentional obstruction of a claim.  Despite conflicting statements, the carrier denied compensability of the claim.  The court found that there are genuine issues of material fact regarding whether the employer intentionally obstructed the employee’s receipt of benefits by making false statements and delaying payment of benefits for 17 months.  Nunn v. Noodles & Company; Zurich American Insurance Co., No. 11-1531 (8th Cir. Ct. 2012), decided March 22, 2012.

Nurses Playing Doctor?

House Bill 915 includes proposed amendments to several sections of the Texas Occupations Code that would allow  qualified advanced practice registered nurses to apply to the board for “prescribing and ordering authority.”  Approved applicants would be authorized to: (1) prescribe, procure, administer and dispense “dangerous drugs and controlled substances;” (2) diagnose, prescribe, and institute therapy or referrals of patients to other providers; and (3) plan and initiate a treatment plan that includes ordering and prescribing medical devices and equipment, nutrition, and diagnostic and supportive services, including home health care, hospice, physical therapy and occupational therapy.  The legislation requires the board to adopt rules to establish any specialized education or training a registered nurse must have to qualify.  The rules must require completion of 3,600 hours of practice as an advanced practice nurse with authority to carry out or sign prescription drug orders, and must establish a system for assigning identification numbers to nurses who meet the requirements.

Division Prepares For Implementation of Pharmacy Closed Formulary For Legacy Claims

On February 6, 2012, the Division issued a memo reminding system participants that beginning on September 1, 2013, legacy claims will also be subject to the closed formulary, requiring preauthorization before a pharmacy can fill or dispense drugs excluded from the closed formulary.  Carriers are required to identify all legacy claims that have been prescribed a drug excluded from the closed formulary after September 1, 2012 and send notice to the employee, prescribing doctor, and pharmacy.  The Division is urging all affected parties to begin the process well in advance of the deadlines to avoid last minute complications.

Efforts to Curb Drug Abuse Raise Privacy Concerns

Prescription Access Texas, a database maintained by the Texas Department of Public Safety, will go online this summer, allowing registered physicians, pharmacists and law enforcement officials  access to the agency’s records of who is prescribing, filling, and buying controlled substances.  During next year’s legislative session, Texas lawmakers will consider requiring doctors and pharmacies to check the database before writing or filling prescriptions for controlled substances.  While concerns have been expressed that this would be a violation of patient privacy, the DPS says the data will be used to identify fraud in an effort to curb prescription drug abuse and prevent accidental overdose, which have increased dramatically in recent years. To see the full article, go to http://dfw.cbslocal.com/2012/02/10/doctor-shopping-database-concerns-privacy-advocates.

Enforcement Actions for 2011 Posted

As usual, the vast majority of enforcement actions were against carriers, and most of the sanctions imposed against health care providers were for failure to timely file or properly complete required forms and reports, but a few doctors were sanctioned for complaints related to the quality of care.  But there are a few exceptions.  Dr. Quoc Thai Nguyen of Houston was fined $2,500 for ‘failure to provide health care consistent with public health, safety, and welfare.”  Dr. Alexander Orlov of Lufkin was removed from the workers’ compensation system due to an undisclosed criminal offense.  Dr. Anthony Francis Valdez of El Paso was ordered to cease and desist from participating in the WC system for providing services to injured workers after he was denied admission to the ADL.  Dr. James Crockett of Marlin was removed from the system for “providing diagnoses and treatments found to be improper, unfair and/or unreasonable and not supported by documentation and/or physical examination of the employee.” Dr. Edward Wolski of Denton was fined $5,000 for filing unwarranted complaints against system participants.  Another highlight: Vista Hospital of Dallas was fined $18,000 for “submitting charges for services not furnished,” among other things. A full list of the enforcement actions can be viewed  at www.tdi.texas.gov/news/2012/news20129.html.

Revised Forms For Requesting Change of Treating Doctor and Advance of Benefits

The Division revised DWC Form-047 (employee request for advance of income benefits) and Form-053 (employee request to change treating doctor, non-network claims).  The revised versions of these forms can be downloaded from the TDI’s website.  Previous versions of these forms will no longer be accepted after June 1, 2012.

Congratulations Are In Order!

Jane Stone with Stone Loughlin & Swanson and Steve Tipton with Flahive Ogden & Latson were recently named  Fellows of the College of Workers’ Compensation.  The College of Workers’ Compensation Lawyers is a national organization that was established to honor those attorneys who have distinguished themselves in their practice in the field of workers’ compensation, demonstrating their commitment to furthering the objectives of the College through scholarship, teaching, lecturing, and/or distinguished published writings on workers’ compensation or related fields of law.