State News : Nebraska

Nestled towards the end of the Nebraska Workers’ Compensation Act is Neb. Rev. Stat. § 48-162.01 which establishes an employee’s rights to vocational rehabilitation benefits in Nebraska. However, a recent Nebraska Supreme Court decision has significantly muddied the waters by relying on this statute to allow an employee to essentially relitigate compensability of a prior injury.

The Nebraska Supreme Court’s (“NESC”) decision in Spratt v. Crete Carrier, 311 Neb. 262 (2022) has left defendants questioning what truly constitutes a “final” award. This history of the Spratt case started in 2016 when a driver injured his thoracic and lumbar spine. At the time of trial, both parties presented expert medical evidence which confirmed Spratt’s thoracic strain had resolved without any evidence of permanency. The compensation court therefore only awarded him additional lumbar related medical treatment. Six weeks after the award, Spratt’s doctor sought permission to treat his thoracic back pain, but the defendant declined, citing the finding in the original award. Roughly a year and a half after the original award, Spratt’s doctor placed Spratt’s lumbar condition at maximum medical improvement (“MMI”) and again noted that his thoracic spine continued to be symptomatic. The doctor also offered a causation opinion attributing the thoracic condition to the original work accident. When the defendant filed a modification to cease temporary benefits, Spratt responded by requesting a modification of the original award so that he may receive treatment for his thoracic spine.

The compensation court rightfully questioned whether it had authority to “re-visit” Spratt’s request for treatment for his thoracic condition. Indeed, in Nebraska, a party who disagrees with an order or award must challenge that opinion by either: (1) appealing to the Nebraska Court of Appeals or Supreme Court under § 48-170, or (2) requesting a modification within 14 days of the award under § 48-180.  A party who argues the employee’s condition substantially changed after an award must rely on § 48-141 which allows a modification on the grounds of an increased or decreased incapacity due solely to the injury. Spratt neither appealed nor requested a modification of the original award under § 48-141 or § 48-180. In light of the same, the compensation court held it did not have the statutory authority to “re-visit” an issue that had been previously adjudicated at a prior hearing.

Spratt appealed and the NESC advanced the appeal to its docket. For the first time, Spratt argued that § 48-162.01(7) allowed the compensation court to award thoracic treatment. After discussing the importance of finality, but also highlighting the “beneficent” purpose of the Act, the NESC reversed the compensation court and held that it had the power under § 48-162.01 to “modify the original award.”

Before discussing the context of the Spratt decision, a bit of a history lesson is in order. There’s no question that § 48-162.01 establishes most of the procedures and processes applicable to vocational counselors. At issue in this blog post is the text found in subparts (6) and (7). The exact text can be found here. Both sections use the phrase “physical and medical rehabilitation services.” The question then is what the Legislature intended by including “physical and medical rehabilitation services” in a statute reserved for vocational rehabilitation benefits. There’s no dispute that Neb. Rev. Stat. § 48-120 provides the compensation court with the authority to award medical treatment, including treatment that is “physical and medical rehabilitation.” During testimony of a 1969 amendment to § 48-162.01, a workers’ compensation judge testified to the legislature that vocational rehabilitation and “physical or medical rehabilitation” were two very different things, yet rather than remove the language in subparts (6) and (7), the Legislature has continually retained it. To be clear, while the language has been kept, it has rarely ever been amended or discussed beyond renumbering or grammatical changes. In fact, the 1993 version of § 48-162.01 includes almost the exact same wording of what is found currently in section (6).

One could argue that, at the time § 48-162.01 was drafted, the Legislature recognized the interplay between one’s ability to return to work and certain types of medical rehabilitation. In 1993, § 48-162.01 actually stated in part that vocational “specialists shall continuously study the problems of rehabilitation, both physical and vocational…”  (emphasis added). Likewise, in the medical field, “physical and medical rehabilitation services” commonly refer to the practice of medicine which involves a multifactorial approach to restoring function. These services sometimes include medical treatment that isn’t necessarily medication or physical therapy. One could argue then that the use of the phrase “physical and medical rehabilitation” may simply have been a way of ensuring that an employee receive more unique kinds of treatment if necessitated to accelerate an employee’s return to gainful employment.

With this brief history in mind, fast forward to the late 1990s when the NESC decided Dougherty v. Swift-Eckrich, 251 Neb. 333, 557 N.W.2d 31 (1996). In that case, the compensation court awarded a vocational rehabilitation plan which ended in August of 1994, but the end date was based on a miscalculation by the vocational counselor. There was no question that the actual end date should have been in December, but the employee failed to appeal or otherwise challenge that decision. Therefore, at a later hearing, the compensation court extended the vocational plan through December. The employer appealed. Reversing the compensation court’s decision, the NESC held that the court was without statutory authority to make such a change respecting vocational rehabilitation.

In response to Dougherty, the 1997 Nebraska Legislature amended § 48-162.01. The amended language can now be found at the end of subpart (7) and reads: “The compensation court or judge thereof may also modify a previous finding, order, award, or judgement relating to physical, medical, or vocational rehabilitation services as necessary in order to accomplish the goal of restoring the injured employee to gainful and suitable employment, or as otherwise required in the interest of justice.” When introducing the amendment, the Senator proclaimed the intent of the bill was specifically to “allow the modification of a vocational rehabilitation plan by the Court after the award has become final for the purpose of restoring the employee to gainful and suitable employment or as otherwise required in the interest of justice.” Business and Labor Committee, 95th Leg., 1st Sess. (Jan. 27, 1997) (emphasis added).

One can fairly argue that, if the Legislature didn’t intend for the 1997 amendment to apply to prior awards of medical benefits, the amendment shouldn’t have said, “relating to physical, medical, or vocational rehabilitation services.” There’s very little information explaining how this exact text was selected by the drafters, but it’s unquestionable that the debate focused on vocational rehabilitation plans. Also, don’t forget that drafters of amendments prefer consistencies in the way statutes are drafted. As noted above, don’t forget that § 48-162.01 had consistently used the phrase “physical and medical rehabilitation services.” Whether moot language or not, the drafters in 1997 would have been encouraged to maintain consistencies by using this same language in the post-Dougherty amendment.

After being amended in 1997, the court’s review of § 48-162.01 almost exclusively involved vocational rehabilitation disputes. For example, in 2007, the Nebraska Court of Appeals addressed McKay v. Hershey Food Corp., 16 Neb. App. 79 (2007). In that case, despite having a permanent injury with permanent restrictions, the compensation court did not award the employee any vocational rehabilitation benefits because he remained gainfully employed at the time of trial. Two years later, after the defendant’s company shut down, the employee requested vocational rehabilitation benefits. Denying the motion, both the compensation court and the review panel held that § 48-162.01 was inapplicable because “to invoke subsection 7, a prior award of vocational rehabilitation services must have been made.” On appeal, the Nebraska Court of Appeals affirmed the denial. The holding in McKay still dictates that the compensation court cannot award vocational rehabilitation benefits which were not expressly provided for in the original award.

Relevant here is an unpublished decision in 2016, Mischo v. Chief School Bus Service.  In Mischo, an employee received an award of benefits for a cervical injury, but the compensation court did not expressly award any future medical treatment. Four years later, the plaintiff filed a motion and asked the court to award future medical treatment for his neck. In doing so, the plaintiff relied on § 48-162.01. The compensation court held: “The provision at issue is simply intended to permit the compensation court to modify rehabilitation plans in response to changed circumstances following the entry of the initial plan.” It continued, “Plaintiff cannot use the language of the last sentence of § 48-162.01(7) to expand the Court's authority to grant additional benefits that were not awarded in the original award.” An appeal followed, but the Court of Appeals affirmed the judge’s decision.

The NESC in Spratt recognized the McKay decision and the legislative history in response to Dougherty, but nonetheless held that asking for thoracic spine treatment was not a request for new benefits, but instead, a “modification of medical rehabilitation services that the compensation court had already awarded him.”  Stated another way, the NESC held that Spratt only requested a change in the “extent” of medical rehabilitation provided for by the original award. Because Spratt had been awarded treatment for his lumbar spine, the NESC held that treatment for his thoracic spine was not a “new” benefit. By taking this approach, the NESC approved of a very broad and arguably unsupported reading of § 48-162.01(7).

The NESC provided very little context as to how the award of medical treatment for Spratt’s thoracic spine was not “new.” It wrote, “[Defendant] argues that the compensation court cannot modify an award to include any medical rehabilitation services that were not specifically included in the prior award, regardless of how similar the services were to those awarded in the prior award. Under this rationale, the compensation court would be incentivized to broadly include all hypothetical medical rehabilitation services (no matter how redundant or speculative) in order to ensure it can modify the award later if necessary.” However, the Court seems to miss the critical issue, and it confuses the manner in which the court awards future medical treatment. First, the critical issue in Spratt was not necessarily the type of medical treatment requested by the employee; it was the fact that he requested treatment for an entirely different body part. An injury to the thoracic spine is not the same as an injury to the lumbar spine just like an injury to the hand is different than an injury to the finger. Additionally, the NESC seemed to forget that the compensation court had previously held Spratt’s thoracic injury was only temporarily exacerbated by the work accident. By allowing him to “modify” the prior award, the NESC allowed Spratt a second chance to relitigate an injury that had been previously resolved by the compensation court. A fundamental rule in all legal proceedings is the idea of finality. As the NESC quoted, “Litigation must be put to an end, and it is the function of a final judgment to do just that.” Black v. Sioux City Foundry Co., 224 Neb. at 828, 401 N.W.2d at 682 (1987).  In this case specifically, the employer is prejudiced by now having to relitigate a thoracic injury that had previously been resolved.

Part and parcel of the NESC’s confusion seems to be a misunderstanding as to how “medical rehabilitation services” are awarded. After a trial, the compensation court does not detail in vain each specific type of future medical treatment that is being awarded. In fact, the NESC has previously made it clear that an employer may be liable for medical treatment “even if the necessity for a specific procedure or treatment did not exist at the time of the award.” See Sellers v. Reefer Systems, Inc., 283 Neb. 760, 811 N.W.2d 293 (2012). In light of those decisions, it’s entirely unclear what concerns the NESC had when it said, “the compensation court would be incentivized to broadly include all hypothetical medical rehabilitation services (no matter how redundant or speculative) in order to ensure it can modify the award later if necessary.” The compensation court certainly does not need to provide all hypothetical services that could be needed. Instead, the compensation court need only determine the nature and extent of the pled injuries, and, if the employee has permanent injuries, whether he or she is entitled to future medical treatment for said injuries.

To illustrate the concerns created by this holding, if Spratt files a motion and requests additional medical treatment for an entirely new body part completely unrelated to the spine, say his head or perhaps a scheduled member like his knee, would § 48-162.01 allow such an argument so long as he can prove it arises out of the original work accident?

Procedurally, this matter will now return to the compensation court. Because the NESC only held that the compensation court has the authority to “re-visit” Spratt’s thoracic treatment, the judge will still need to determine whether the employee satisfied his burden of proof and persuasion on a factual basis that he requires additional thoracic treatment to be restored to gainful and suitable employment. However, the implications of the Spratt decision may continue to haunt defendants and efforts should be made both judicially and legislatively to return § 48-162.01 to its original purpose of addressing vocational rehabilitation benefits.

If you have questions about a potential modification issue, please contact any of the lawyers at CPW by phone or email. Want to ensure you don’t miss out on the next post in the CPW compendium series? Be sure to subscribe to our newsletter.