State News : West Virginia

Fall 2016 West Virginia Case Report and Workers’ Compensation Market Commentary

Supreme Court Report

The West Virginia Supreme Court of Appeals Court continues a trend of reporting decisions reflecting the privatization of the insurance market where multiple carriers have to determine compensability of preexisting injuries to current compensable claims, allocate charges from a claim among multiple employers, and calculate impairment from preexisting injuries.

One of the first cases argued before the West Virginia Supreme Court of Appeals in its September 2016 Term wasPioneer Pipe v. Swain, et al., No. 15-0397 (September 19, 2016), in which the Court adopted the OIC’s interpretation it is not mandated to allocate and divide charges for occupational hearing loss claims. The Court’s ruling confirms the OIC’s position allocation in hearing loss claims is a discretionary obligation in West Virginia which is in line with practice in a majority of states. The Court complained W. Va. Code 23-4-6b(g) is a “confusing, poorly-drafted anachronism, a vestibular flicker of the old workers’ compensation system” before privatization. The Court also noted its repeated recognition workers’ compensation law is a “miasma” that is a “sui generis, jurisdictional hodge-podge that stands alone from all other areas of the law, causing decisions rendered in the workers’ compensation arena to be almost wholly unusable in any other area of the law, and vice-versa.” Clearly four justices held their collective noses while making a decision where Pioneer Pipe is responsible for the entirety of a thirty-three year history of noise exposure for an employee with a mere forty hours of exposure at Pioneer Pipe. In her dissenting opinion, Justice Davis found the OIC’s policy injured Pioneer Pipe by denying its right to due process to make an individual determination of allocation on the merits, by preventing Pioneer Pipe from having other employer’s share in the “costs” of a hearing loss claim, and by prohibiting Pioneer from showing it should not be part of the case at all because the claimant worked only forty hours and not the sixty days as required by the statute.   

In the January Term of Court, two cases address compensability of preexisting injuries and the proper methodology for calculating preexisting impairment.

In syllabus point 3 of Gill v. City of Charleston, 783 S.E.2d 857, 858 (W. Va. 2016), the Court held:

“A noncompensable preexisting injury may not be added as a compensable component of a claim for workers' compensation medical benefits merely because it may have been aggravated by a compensable injury. To the extent that the aggravation of a noncompensable preexisting injury results in a discreet new injury, that new injury may be found compensable.”

In SWVA, Inc. v. Birch, 787 S.E.2d 664, 665 (W. Va. 2016), the Court held the proper methodology for determining preexisting impairment is to “deduct the impairment attributed to the preexisting injury from the final whole person impairment rating as determined under West Virginia Code of State Rules § 85-20.” This decision reflects continued reliance on the AMA Guides to the Evaluation of Permanent Impairment, 4^th Edition, and the impairment tables in Rule 20 of the Code of State Rules.

Market Commentary

Declining premium volume is a challenge for carriers as the West Virginia economy struggles with residual loss of business connected to the distressed coal mining and oil & gas industries and the continued economic recession. The workers’ compensation insurance market is sound. As reported by the National Council on Compensation Insurance (NCCI) at its 2016 State Advisory Forum, loss cost decreases continue in West Virginia for the 12^th year in a row. NCCI reported lost-time frequency continued to decline in 2016, but was higher compared with other states in the region. In a press release issued July 29, 2016, Governor Earl Ray Tomblin announced West Virginia employers will see a projected $36 million reduction in workers’ compensation premiums this year, and have seen a savings of more than $352 million since the privatization of workers’ compensation insurance in 2006. NCCI recently filed a proposed reduction of 14.7% in workers’ compensation loss cost rates with the Offices of the Insurance Commissioner. The loss cost rate is effective November 1, 2016. This is the 12th consecutive reduction since privatization and accounts for a cumulative decrease of 69.1% from pre-reform levels. A proposed 14.4% rate decrease for the assigned risk market also was filed by NCCI. Litigation trends also reflect the enduring impact of privatization with the September 8, 2016 report to the Industrial Council by the Office of Judges showing continuing decline in protests acknowledged by the OOJ: 2268 through August 31 compared to 3709 for 2015.

If you have questions or need more information, please call or e-mail Dill Battle at 304.340.3823 or hdbattle@spilmanlaw.com

H. Dill Battle III, Esq.

Spilman Thomas & Battle, PLLC

300 Kanawha Boulevard, E.

Charleston, West Virginia 25301
304.340.3823 - office
hdbattle@spilmanlaw.com