State News : Kentucky

2x Multiplier and Return to Work

Helton v. Rockhampton Energy, LLC (2021-SC-0248-WC)

The 2x multiplier in KRS 342.730(1)(c)2 applies to permanent partial disability benefits only where an employee “returns to work” after a work-related injury at the same or higher wages and that work subsequently ends.  To qualify as a “return to work,” there must be a cessation of work followed by a resumption of work. Continuation of work is not a return to work.

Employee suffered a work-related injury on 11/16/18. He continued working his normal job at the same or greater wages until he was laid off for economic reasons on 9/2/19. Prior to being laid off, the employer never ceased working after the injury. The ALJ awarded the 2x multiplier since he was working making the same or greater wages post-injury and was then laid off. The Board reversed finding there was no “return” to work pursuant to KRS 342.730(1)(c)(2) because there was never a cessation of work followed by a resumption. The Court of Appeals and Supreme Court of Kentucky upheld the reversal.

3x Multiplier and Inapplicability of Public Policy Exclusion

Tractor Supply v. Wells (2021-SC-0286-WC)

In Livingood v. Transfreight, LLC, the Court held that if an employee returns to work making equal or greater wages and is subsequently fired for intentional misconduct with a reckless disregard to the consequences, the employee is not entitled to the 2x multiplier as awarding same would be against the public policy rule that no claimant should profit from own misconduct. Here, the employer sought to expand this public policy exclusion to the 3x multiplier which, pursuant to 342.730(1)(c)1, applies when the claimant no longer has the physical ability to return to the pre-injury job.

The employee was injured at work resulting in restrictions that prevented her from performing her pre-injury job duties. She returned to a light duty position and was subsequently terminated for allegedly providing false information during an investigation (unrelated to workers’ comp claim).

The ALJ awarded indemnity benefits with the 3x multiplier. The employer argued that claimant was not entitled to the 3x multiplier due to her misconduct, seeking to extend the holding in Livingood.

Affirming the decision of the ALJ, the Board, and Court of Appeals, the Supreme Court of Kentucky declined to extend Livingood to the 3x multiplier. The Court found that the 3x multiplier is concerned with the finding of disability and is not tied to any condition of employment. Because the 2x multiplier is related to leaving employment, it was reasonable for the court to determine that when the job loss is due to misconduct, awarding a double benefit would be unreasonable and against public policy. Here, the employee was entitled to the 3x multiplier because she could not return to her pre-injury duties and her subsequent termination was irrelevant.

Admissibility of Out of State Physician Reports

Toler v. Oldham County Fiscal Court (2021-SC-0356-WC)

In a case of first impression, the Supreme Court of Kentucky held that a written report by a physician not licensed in Kentucky cannot be submitted as evidence in a workers’ compensation case.

Overturning the ALJ, the Board and Court of Appeals, the Supreme Court first noted that the Kentucky Rules of Evidence (“KRE”) must be followed in all proceedings before an ALJ, except as varied by statute or 803 KAR 25:010. It then stated that KRS 342.033 provides that a party may introduce direct testimony from a physician through a written medical report. The Court also referenced 803 KAR 25:010 which states a party may file evidence from two physicians in accordance with KRS 342.033, either by deposition or medical report. Holding that the written report of a physician not licensed in Kentucky was inadmissible, the Court found that the plain language of KRS 342.0011(32) defining “physician” only included those who were licensed in Kentucky. It further found that the prefatory phrase in KRS 342.011 “unless context otherwise requires” did not apply.

The Court clarified that this holding does not apply to treating physicians because the “context otherwise requires” phrase required an expanded reading of physicians when dealing with treating physicians. Therefore, a treating physician not licensed in Kentucky may provide a written opinion on behalf of an employee. 

Note this case involved the admissibility of a written report. It is arguable that a medical opinion of an out of state physician introduced by deposition testimony would be admissible. In a 2005 case, the Supreme Court of Kentucky allowed the deposition testimony of a non-physician expert on the issue of causation, specifically stating that the definition of “physician” does not preclude an ALJ from considering other types of expert testimony if it is relevant to resolving a causation question. Dravo Lime Co., Inc. v. Eakins. Also, KRE 702 allows expert testimony on relevant issues, and it seems it would violate the KRE to refuse to admit deposition testimony of qualified experts, including out of state physicians.

Even if an out of state physician opinion would be admissible through deposition, it may now be difficult if not impossible to get the claimant to see an out of state physician if not licensed in Kentucky. KRS 342.205(1), in pertinent parts, states that “[a]fter an injury and so long as compensation is claimed, the employee, if requested by a party…shall submit himself or herself to examination, at a reasonable time and place, to a duly qualified physician or surgeon designated and paid by the requesting party.” (emphasis added).

Furthermore, if a claimant has moved out of state, it appears the employer will now have to pay to have the claimant travel back to Kentucky for an examination with a Kentucky licensed physician if they wish to submit a written report into evidence.

There are numerous places throughout KRS Chapter 342 and the applicable regulations that could be impacted by this decision, including regulations governing Utilization Review (“UR”) and Medical Fee Disputes. UR is currently being regulated by an emergency regulation while the new regulations work their way through the regulatory approval process. 803 KAR 25:195E defines “physician” as defined by KRS 342.0011(32). It further provides that “only a physician shall issue an initial utilization review denial.” (emphasis added). Final UR decisions also needed to be issued by a “physician.” Do UR denials now need to be made only by Kentucky licensed physicians? Can the UR decisions be admitted into evidence in medical fee disputes (“MFD”) if the physician is out of state? The DWC is working on current regulations to govern UR and MFD, so we anticipate the new regulations will provide clarification and guidance on these issues. Also, a Petition for Rehearing has been submitted to the Supreme Court requesting clarification on the impact this decision will have on the UR process. We will monitor closely and keep you updated on any developments.

Sixty-Day Submission Requirement for Medical Bills Applies Only Post-Award

Wonderfoil, Inc. v. Russell (2020-SC-0301-WC)

The Supreme Court of Kentucky held that the Board and Court of Appeals properly reversed the ALJ’s ruling that certain medical expenses were not submitted timely, holding that the 60-day deadline for submission of medical expenses by an employee only applies post-award. 

The Supreme Court of Kentucky reasoned that pre-award application of the 60-day deadline found in 803 KAR 25:096 would contradict other regulations requiring disclosure of unpaid medical bills during litigation. It cited a prior Board opinion, Brown Pallet v. Jones, which held that the 45-day deadline for submission of bills by medical providers found in KRS 342.020 only applies post-award. The Court also cited its earlier decision in R.J. Corman Railroad Construction v. Haddix holding that the requirement that employers pay medical bills within 30 days only applies post-award.

The Court explained that the claimant is still required to submit unpaid medical expenses in its Notice of Disclosure which must be filed within 45-days of the issuance of the Notice of Filing Application. Furthermore, the claimant then must turn over new medical expenses within 10 days of receiving same. And claimant must bring copies of unpaid medical bills and expenses to the Benefit Review Conference and failure “may” constitute a waiver to claim payment for those bills.

Exclusive Remedy and Up-the-Ladder Immunity

Cunningham v. Kroger Limited Partnership I (2021-CA-0704-MR)

Plaintiff worked for Penske, who agreed by contract to receive freight for Kroger Limited Partnership II (“KLP II) and deliver said freight to KLP II and to facilities of all KLP II’s divisions, subsidiaries or affiliates. Plaintiff was injured while making a delivery to Danville Kroger store, which is owned and operated by KLP I, a limited partner of the Kroger Company. KLP II is a subsidiary of the Kroger Company.

Plaintiff received workers’ compensation benefits from his employer, Penske. Plaintiff then filed civil suit against KLP I alleging negligence and seeking damages for medical expenses, lost wages and pain and suffering. The Court of Appeals affirmed the lower court decision granting KLP I summary judgment as an up-the-ladder employer immune from tort liability.

Application of 3x Multiplier to Injuries Sustained on Two Separate Occasions

Apple Valley Sanitation, Inc. v. Jon Stambaugh (2021-SC-0227-WC)

The employee sustained two separate work injuries, returning to work after the first injury until a subsequent injury 12 weeks later, after which he did not return to work. The employee was performing his pre-injury job except for a light duty restriction during 6 of the 12 weeks. The employee submitted a physician report stating he lacked the physical ability to perform his pre-injury job. The ALJ awarded benefits for both injury dates enhancing both by the 3x multiplier.

The employer argued that it was erroneous to enhance the award for the first injury date by the 3x multiplier because the employee returned to work performing the same job after the first injury. The Supreme Court of Kentucky affirmed the award of the 3x multiplier, finding that the employee’s continued work did not constitute a return to work reflecting a capacity to continue pre-injury work for the indefinite future.

Psychological and Psychiatric Conditions

Time Warner Cable, Inc. v. Smith (2020-SC-0580-WC)

The Supreme Court of Kentucky held that a Claimant's testimony is competent evidence as to his psychological medical condition, which the ALJ can rely on when determining the extent and duration of a disability. Here the claimant presented medical reports assessing physical and psychological impairments due to the work injury. The psychological report failed to assess restrictions based on the psychological condition. The ALJ noted that the physical injury and physical restrictions alone did not render the claimant permanently and totally disabled. Relying on the claimant’s testimony as to the affect his psychological condition had on his ability to work, the ALJ  found the claimant permanently and totally disabled and the Supreme Court affirmed.

Should you have any questions or wish to discuss any related matters, please contact us at your convenience.

H. Douglas Jones, Esq. – djones@jsbattorneys.com, 859.594.4200

Margo Menefee, Esq. – mmenefee@jsbattorneys.com, 859.594.4200