State News

Update On Requirement Of Kansas Work Comp Impairment Ratings Being Based On The AMA Guides To The Evaluation Of Permanent Impairment 6^th Ed. – Latest Word From Kansas Appellate Courts For 2023. This update follows the 2021 Kansas Supreme Court decision in Howard Johnson III vs. U.S. Food Service and American Zurich Insurance Co., 312 Kan. 597, 478 P.3d 776 (2021) and several Kansas Court of Appeals decisions following, interpreting, and applying Johnson.  On January 8, 2021, the Kansas Supreme Court issued a much-anticipated decision reversing an August 2018 decision of the Kansas Court of Appeals (56 Kan. App. 2d 232, 427 P.3^rd 996), that had struck down as unconstitutional the use of the 6th Edition of the AMA Guides to the Evaluation of Permanent Impairment, for measuring permanent impairment of function of injured workers with general body disabilities under the Kansas Workers Compensation Act.  The Kansas Supreme Court held the language of K.S.A. 2019 Supp. § 44-510e(a)(2)(B) referencing the use of the AMA Guides 6th Ed. could reasonably be interpreted as a "guideline" rather than a "mandate."  Therefore, the high court found the statutory provision requiring use of the 6^th Ed. constitutional under section 18 of the Kansas Constitution Bill of Rights. The court stressed the statutory reference to the 6th Ed. did not alter the additional statutory requirement that any impairment rating must also be "established by competent medical evidence" which rendered sufficient the constitutionality of the statute as worded by the legislature when referencing the use of the 6^th Ed. in Kansas workers compensation cases.

The court went on to indicate that use of the 6^th Ed. is the starting point for a determination of permanent impairment under the statutory language for general body disability work injuries.  With this language, the Court opened the door for administrative law judges to consider use of other editions of the AMA Guides and perhaps even no edition of the AMA Guides, as long as the 6^th Ed. is at minimum a starting point.

The initial application of the Supreme Court’s Johnson decision by administrative law judges appeared to adopt the approach that Justice Stegall, writing for the Supreme Court in Johnson, delivered something for everyone in the Supreme Court’s Johnson decision.  For the employer and carrier side, the 6^th Ed. language in the statute was deemed to be constitutional and therefore retained as at least a starting point for an impairment rating analysis.  For the injured worker side, the decision is being interpreted as opening the door for formulations of rating opinions outside of the four corners of the 6^th Ed. of the AMA Guides, if the rating opinions also qualify under part-two of the legal test as “competent medical evidence.”

The statutory context of the Johnson issue of whether use of the 6^th Ed. was constitutional in relation to determining impairment for general body disability injuries under K.S.A. 2019 Supp. § 44-510e(a)(2)(B).  In Kansas, general body disability injuries are considered the exception, and scheduled disabilities as listed in the statute are considered the general rule.  A follow up question after the Supreme Court’s Johnson decision was whether in the context of scheduled injuries and disabilities found in K.S.A. 44-510d(b)(23), the requirement of using the AMA Guides 6^th Ed. in determining permanent impairment of function is constitutional, and both the starting and ending point for the analysis.  The statutory language mandating the use of the AMA Guides in K.S.A. 44-510e(a)(B) for scheduled disabilities is different than the language of K.S.A. 44-510d(b)(23) for general body disabilities.  The scheduled disability statute requires impairment of function related to a scheduled injury shall be determined using the 6^th Ed. if the impairment is contained therein.  The scheduled disability statute, K.S.A. 44-510d(b)(23), does not contain the phrase by "competent medical evidence" that the Johnson court cited in the general body disability statute.  The plain language of K.S.A. 44-510d(b)(23), the scheduled disability statute, requires the functional impairment to be based upon the 6^th Ed. There is no explicit requirement in that statutory language that the impairment rating be based upon any other criteria, including substantial competent medical evidence.

In Butler v. The Goodyear Tire and Rubber Company, OSCAR CS-00-0285-928 (WCAB May 2021) the Kansas Workers Compensation Appeals Board addressed this issue in the context of whether the plain language of the scheduled disability statute mandates the use of the AMA Guides 6^th Ed. for a shoulder injury.  The Appeals Board affirmed the ruling of the administrative law judge that the plain language of the scheduled injury statute is different than the plain language of the general body disability statute relied upon by the Johnson court.  That difference in the plain language of the scheduled disability statue was held to leave no room for the court to consider or apply any other AMA Guide edition other than the 6^th Ed. as required by the plain language of the statute.

Several notable Kansas Court of Appeals decisions in late 2021, early 2022 and 2023 illustrate that the question of whether the Johnson Court’s pronouncement that the AMA Guides 6^th Ed. is “just the starting point” is still somewhat up in the air regarding whether general body claims can be awarded impairment of function compensation based on any version of the AMA Guides other than just the Sixth Edition.

On October 1, 2021, the Kansas Supreme Court granted publication of the Court of Appeals decision in Zimero v. Tyson Fresh Meats, 61 Kan. App. 2d 1, 490 P.3d 86 (2021).  Zimero held that for a general body disability compensation claim, “any reference to the 4^th Edition for injuries occurring after January 1, 2015, is irrelevant.  The Court of Appeals rejected claimant’s argument holding that “Parties and courts do not choose between the 4^th Edition or the 6^th Edition.  The 6^th Edition is statutorily required.”

Next, on December 3, 2021, a separate panel of the Kansas Court of Appeals issued an unpublished opinion in Morris v. Shilling Construction Co., Inc., No. 123,297, 2021 WL 5751704 (Kansas Court of Appeals unpublished opinion filed Dec. 3, 2021).  The Morris opinion which appeared to affirm the Zimero position that the Supreme Court decision in Johnson while requiring that the starting point being use of the 6^th Edition and then using competent medical evidence to determine the compensable impairment, does not leave room for use of the 4^th Edition which the legislature expressly removed and replaced with the now required AMA Guides 6^th Edition.

Then on January 28, 2022, yet another panel of the Kansas Court of Appeals issued its published opinion in Garcia v. Tyson Fresh Meats, Inc., 61 Kan. App. 2d 520, 506 P.3d 283 (2022) seeming to be critical of an Appeals Board decision that did not appear to consider medical evidence which was based on the AMA Guides 4^th Edition when awarding permanent impairment of function compensation.  Zimero clearly holds that the 4^th Edition can no longer be used to determine permanent impairment while Garcia appears to hold that not considering the 4^th Edition may be reversable error.

Th most recent Kansas Court of Appeals application of the Johnson court two-part test following the published Court of Appeals decision in Garcia is the unpublished decision issued by a three-judge panel of the Court of Appeals on February 24, 2023, in Ortega v. Encore Rehabilitation Services LLC, No. 124,824 (Kan App 2023) (unpublished opinion).  In Ortega, the Court of Appeals followed part-one of Justice Stegall’s two-part test and held that it must, under Johnson, “start with the AMA Guides 6^th Ed.”  Under part-two of the Johnson test, the Ortega majority held that other competent medical evidence supported that the 6^th Ed. rating should be more heavily weighted over the claimant’s expert 4^th Ed. rating opinion.  In short, the Ortega majority more closely followed the Zimero approach but without stating that the 4^th Ed. can no longer be considered, as Zimero held.  A dissenting opinion in Ortega articulated that the case should be remanded back for additional medical evidence for a re-evaluation of the “competent medical evidence” part of the two-part legal test.

The bottom line as of 2023 is that for general body disability claims Kansas law requires that Justice Stegall’s Johnson two-part test is still controlling and in effect, and all impairment rating opinions must: 1) start by using the AMA Guides 6^th Ed.; and 2) to the extent there is deviation from the AMA Guides 6^th Ed., the impairment rating opinion must satisfy part-two of the legal test that for any medical expert impairment rating opinion not using the AMA Guides 6^th Ed., that opinion must be explained under the “competent medical evidence” prong of the test.  As a practical matter for parties currently in disability compensation litigation in general body disability claims, this situation means that it is likely medical rating opinion evidence which uses other editions of the AMA Guides, other than the 6^th Edition, will not be automatically excluded (as Zimero seemed to hold), but can be attacked factually using the “competent medical evidence” prong of the two-part test.  The practical effect of this for parties in litigation is it will likely increase the cost and scope of workers’ compensation final award litigation in Kansas.

The bottom line as of 2023 for scheduled disability claims in Kansas, is that the rating opinions must be based upon the AMA Guides 6^th Ed. or the party risks that the rating opinions will not be considered by the court in issuing a disability compensation award.

2023 Kansas Work Comp Legislative Update.  There were no substantive Kansas work comp legislative changes of import in 2023 to the Kansas Workers Compensation Act.

2023 Rates Update.  The maximum weekly indemnity benefit rate increased to $804.00, effective for accidents occurring 7/1/2023 through 6/30/2024, based upon annual indexing to the state average weekly wage.  Likewise for the same period, the minimum weekly benefit rate for fatalities increased to $536.00.   Effective for medical travel after July 1, 2023, the medical mileage reimbursement rate increased from $.585 cents per mile to $.655 cents per mile.

© Copyright 2023 by Kim R Martens, MARTENS WORK COMP LAW LLC. All rights reserved. Reprinted with permission.

Jurisdiction of Injured Employee's Claim

Letcher County Board of Education v. Hall, (2022-SC-0313-WC, 6/15/23) not final
 
Teacher filed WC claim alleging he developed mesothelioma after being exposed to asbestos during his employment in county high school. County School Board argued that the Board of Claims, not Department of Workers’ Claims, had exclusive jurisdiction over the claim under KRS 49.070(16) which states that “any claim” against the school district for damages as a result of asbestos exposure shall be brought before Board of Claims. Rejecting this argument, the Supreme Court of Kentucky concluded that KRS 49.070(16) pertains to claims by third parties, not employees. The Court cited the purpose of the Workers’ Compensation Act to compensate injured workers for loss sustained as a result of work-related injury or disease as well as its exclusivity. Furthermore, the Court pointed out that KRS 49.020(5) requires the Board of Claims to find negligence while the Workers’ Compensation Statute requires no showing of fault.
 

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 

CHI St. Vincent Infirmary v. McCauley, 2023 Ark.App. 126. 

• Claimant injured her hip and back after tripping on a sidewalk at work. The employer denied the claim as compensable on the grounds that she was not performing employment services at the time of the injury. Claimant was a nurse supervisor whose office was not equipped with basic office supplies, but she had the option of ordering supplies through the department secretary. Instead, because it was unclear when she would receive those supplies, she decided to purchase her own supplies and bring them to the office in her car. On her lunch break, she went to her car to retrieve the items and tripped on the sidewalk. The ALJ found that the Claimant was going to her car for her own sole benefit and convenience because she was retrieving nonessential, nonwork related items.

• The Full Commission reversed the ALJ, finding that the Claimant was performing duties which at least indirectly benefitted the employer. 

• On appeal from the employer, the Court of Appeals affirmed. The Court cited case law stating that an injury suffered by an employee while on break is compensable if the employer has imposed some duty or requirement on the employee to be fulfilled during a break. Moncus v. Billingsley Logging, 366 Ark. 383, 235 S.W.3d 877 (2006). The Court pointed to Claimant’s testimony that, as a nurse supervisor, she was still “technically on duty” and subject to being called back to work during her lunch break despite the employer noting it would be “very unusual.”

The rules for recording and taping IMEs in New Jersey became much clearer with the June 15, 2023, New Jersey Supreme Court ruling in DiFiore v. Pezic, (Nos. A-58/59/60-21) (087091). While the case involved three separate civil court defense exams, there is no reason that the principles set forth in this consolidated decision will not be applied to workers’ compensation cases.

The basic rule in this case is that if the examinee (petitioner) wishes to record or tape an examination, counsel for petitioner needs to make a request of respondent. Although the case does not discuss physician recording of examinations, it would seem that the same rule should apply to physicians.  The Supreme Court reviewed the three separate cases where objections were made by the defense to allowing third parties to attend an IME or to record an IME. The Court said, “We therefore hold that if a plaintiff seeks to bring a neutral third-party observer to a Rule 4:19 exam (defense medical examination), or to audio or video record the exam, plaintiff’s counsel should notify defendant. If defense counsel opposes the third-party observation or recording, the parties should meet and confer in an effort to reach agreement.  Failing an agreement, defendant can move for a protective order under Rule 4:10-3 to bar the observation or recording.”

In the three cases at issue in DiFiore, two involved objections to bringing a third party to the examination and one involved recording a psychological examination. One plaintiff had a cognitive disorder, and another had a language barrier. In the case involving a neuropsychological exam, the neuropsychologist refused to conduct the examination if it would be audio-recorded. A protective order was sought in that case. The Supreme Court said that the burden of seeking a protective order is on the defendant, not on the plaintiff.

The practice of seeking a protective order is not likely to spread to workers’ compensation given that there are about 100,000 active claim petitions in the Division and literally hundreds of thousands of IMEs done each year by a fairly limited number of physicians.  Judges are already handling enormous numbers of cases daily, so parties will simply work out the requests to record.   Many IME doctors already assume that recording is frequently being done without a request being made. There may also be IME doctors who are now recording examinations as well without a request being made. The rule of this case is that a request must be made to record; otherwise, the recording will not be evidentiary. This rule will almost certainly be applied to physicians as well as examinees.  The Supreme Court and the Appellate Division in DiFiore noted that the advent of smart phones makes it easy to unobtrusively record an examination.   

While some may long for the old days when recording examinations was unheard of, those days are long gone. There may be positives that emerge from the practice of seeking consent to record. The rumor mill is often busy with comments that a certain doctor only spent one minute conducting the medical examination, or a certain claimant told the IME doctor that he or she had no complaints whatsoever. Recorded exams done by consent will provide answers and slow down the rumor mill. The Division should consider some basic rules for all practitioners to follow in requesting consent to record either by the physician or examinee or both.

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John H. Geaney, Esq., is a Shareholder and Co-Chair in Capehart Scatchard's Workers’ Compensation Group.  Mr. Geaney concentrates his practice in the representation of employers, self-insured companies, third-party administrators, and insurance carriers in workers’ compensation, the Americans with Disabilities Act and Family and Medical Leave Act. Should you have any questions or would like more information, please contact Mr. Geaney at 856.914.2063 or by e‑mail at jgeaney@capehart.com.

Written by: Tracey Jones

Philip A. Baddour was confirmed by the General Assembly to serve a second term as a commissioner.

The 28th Annual North Carolina Industrial Commission Workers’ Compensation Educational Conference will be held October 4 through 6, 2023 at the Raleigh Convention Center.

New Mediation Rules Regarding Participation

The Supreme Court of North Carolina has approved amendments to the Rules for Mediated Settlement Conferences and Other Settlement Procedures in Superior Court Civil Actions, which went into effect May 1, 2023. Among the amended Superior Court mediation rules is Rule 4, which governs attendance at Superior Court mediations.

Attendance at Industrial Commission mediations is governed by Rule 104 of the Industrial Commission’s mediation rules (11 NCAC 23G .0104). Paragraph (b) of Rule 104 provides that the attendance method for Industrial Commission mediations shall be the same as the attendance method set forth in Rule 4 of the Rules for Mediated Settlement Conferences and Other Settlement Procedures in Superior Court Civil Actions. Therefore, the Rule 4 amendments affect the way the attendance method will be determined in Industrial Commission mediations beginning May 1, 2023.

Under the Rule 4 amendments, if all parties and the mediator agree on the mediation attendance method (which can be remote, in-person, or a hybrid of the two where some parties are participating remotely while others are together in-person), then the mediation will be held using the agreed-upon attendance method. If an agreement on the attendance method cannot be reached, then attendance will be in-person unless the mediator has designated in the Dispute Resolution Commission’s Mediator Information Directory that he or she will only conduct remote mediations. However, in all cases, a party who is required to attend the mediation may file a motion with the Industrial Commission Dispute Resolution Coordinator asking that a different method of attendance be ordered. For example, a party who wishes to participate remotely but does not object to others participating in-person may file a motion requesting an order allowing a hybrid of remote and in-person attendance at the mediation.

This is a change to the rules in that the previous default method of attendance when agreement could not be reached was remote. This new change makes the default attendance in person. It is too early to tell how the Industrial Commission will rule on Motions submitted from either side regarding remote attendance.

Written by: Kyla Block

Prescription medications can be a stumbling block when it comes time to resolve a workers’ compensation claim. Insurance carriers often have preferred vendors they utilize to obtain favorable prescription costs or negotiated agreements with pharmacies, leading to less expensive medical exposure during the pendency of claims. However, claimants are often unable to benefit from these cost savings once their claim has been settled. This becomes a problem for both sides when trying to resolve a claim. The claimant is unsure of the price his/her medications will cost, causing them to demand a higher settlement value and making the overall process more expensive. It consequently costs defendants more to resolve the claim if they are able to do so.

Enter Mark Cuban CostPlus Drug Company. Co-founded by Dr. Alexander Oshmyansky and Mark Cuban in January 2022, Mark Cuban CostPlus Drug Company was created with the express purpose of providing patients with access to safe, affordable medicines regardless of whether they have insurance or a low deductible health care plan. Instead of negotiating prices through pharmacy benefit managers, the company directly negotiates with manufacturers to get generic drugs at wholesale prices. It then sells those drugs to consumers with prescriptions with a 15% markup, a $3 pharmacy labor charge, and $5 for shipping, according to the pharmacy’s website.

CostPlus Drugs aims to disrupt the traditional pharmaceutical supply chain and offer transparency, affordability, and accessibility to prescription medications. Eliminating the middleman and replacing him with a straightforward 15% price markup results in an astonishing difference in the cost of many medications. For example, a 20 mg, 90-tablet prescription of Escitalopram, which costs around $180.00 from a regular pharmacy, would only cost $12.50 from Mark Cuban CostPlus Drug Company according to the latest data. Lidocaine ointment (Generic for Xylocaine) is $5.44 for a tube, compared to its $243.61 retail price. The Lidocaine patch (Generic for Lidoderm) is $46.50, compared to $246.90 retail. Meloxicam (Generic for Mobic) is $3.60 versus $21.39 at a retail price.

Being able to suggest lower prescription costs (and support it with evidence) allows the parties in a workers’ compensation case to reach common ground on future medical treatment costs, which is often murky depending on whether the claimant has insurance or not and what that insurance plan covers. Mark Cuban CostPlus Drug Company provides transparency on prescription costs after the claim ends and allows claimants to obtain much needed prescriptions at a fraction of the price. Suggesting options like Mark Cuban CostPlus Drug Company allows defendants to provide a solution to a potential barrier to settlement, hopefully facilitating resolution of the claim.

For more information on Mark Cuban CostPlus, see this interesting article.

INDIANA

TTD AND PPI RATES

BEGIN JULY 1, 2023

The new statutory TTD and PPI rates for injuries occurring after July 1, 2023.  Rates are reflected in this summary: 

Minimum Weekly AWW, $75; Minimum TTD $75= Minimum Maximum Compensation of $37,500.00.

*Amputation: Calculated by doubling the dollar

amount of PPI rating. I.C. §22-3-3-10 (i)(1)