A PRIVILEGED ATTORNEY—CLIENT COMMUNICATION BY …FOLIO CLIENT NEWSLETTER BY FLAHIVE, OGDEN &...

FOLIO CLIENT NEWSLETTER BY FLAHIVE, OGDEN & LATSON

What Legislative Issues Should Carriers Expect to Encounter in the 82nd Legislative Session (2011)? Part 3 of 3

A PRIVILEGED ATTORNEY—CLIENT COMMUNICATION BY FLAHIVE, OGDEN & LATSON

RECAP: In 2011, Texas Workers’ Compensation carriers should expect to encounter a number of bills to be filed regarding workers’ compensation issues. Our prediction of what legislation to expect is organized into four broad categories: the Sunset bill; unsuccessful legislation from last session; bills arising out of the Entergy case; and leg-islation to clarify the role of (Pharmacy Benefits Manag-ers)PBMs in the Texas workers’ compensation system. Last month, we looked at what bills may be proposed as a result of unsuccessful legislation from the last legislative session. This month we will look at potential bills arising out of the Entergy case and proposed bills clarifying the role of PBM’s.

Legislation Related to the Entergy Decision

In Entergy Gulf States, Inc. v. Summers, 282 S.W.3d 433 (Tex. 2009) the Texas Supreme Court held that premises owners can qualify as "general contractors" for the pur-poses of Tex. Lab. Code § 406.123. Based on this conclu-sion, the Court further held that if premises owners do qualify as "general contractors" under Section 406.123, they are also entitled, as statutory employers, to immunity from common law tort claims by their employees. This

decision proved controversial and an attempt last session was made to reverse the result through legislation.

The controversy has not died down. Consequently, we can anticipate that the competing factions (pro and anti Entergy) will seek legislation this session to confirm the Entergy decision or to try to reverse the result.

Many observers believe that the pro-Entergy supporters are willing to sacrifice existing statutory provisions in an effort to obtain a pro-Entergy bill this session. Some of the issues that pro-Entergy supporters are reportedly willing to give up in the exchange include:

Workers’ Compensation carriers’ subrogation rights; Caps on indemnity benefits; and Existing limitations on catastrophic claims. PBM Legislation

In early 2010 the Division recognized a possible conflict between the Insurance Code and the Labor Code, which, the agency contended, would prohibit pharmacy benefits managers from taking a voluntary or informal network discount on or after January 1, 2011, but which would prohibit PBMs from becoming affiliated with a certified health care network after that date. The problem has been described as an unintended consequence of HB 473, which was passed during the 80th legislative session in 2007.

In This Issue…

Revised DWC-66 …………………………..p. 3

2011—Flahive, Ogden & Latson Mar 2011 - VOLUME 16, NO. 3

FOLIO CLIENT NEWSLETTER BY FLAHIVE, OGDEN & LATSON 2

Flahive, Ogden & Latson, a 22 lawyer firm, defends contested workers’ compensation cases statewide every day. The firm has represented insurance compa-

nies and employers before the Texas Workers’ Compen-sation agency for more than 50 years. For general ques-

tions concerning the newsletter call: (512) 435-2234.

Flahive, Ogden & Latson

P.O. Box 13367

Austin, TX 78711

If you are interested in receiving FOLIO by email, please let us know. FOLIO is prepared for the exclusive use of

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leged communications and further sharing of this news-letter (in either hard copy or electronic format) outside

your company without the express written consent of Flahive, Ogden & Latson is not permitted.

FO&L OFFICE HOURS

Monday—Friday

8:15 a.m.—4:45 p.m.

If you need to call after 4:45 p.m. please call Patsy Shel-

ton at (512) 435-2234. She will be on duty until 6:00 p.m. daily.

Don’t wait until the last hour of the day for deadline filing. Any faxes with information due must be received

by 3:30 p.m. for any deadline handling for same day delivery to the Division, and faxed according to the fax

directory listed on the last page of FOLIO. Furthermore, if you have a last minute deadline, call our office by

3:00 p.m. and speak with Sally Matthews or Patsy Shel-ton to advise that a last minute filing is necessary to

meet a deadline. We will be watching and waiting for

the fax. Otherwise, last minute faxes could delay re-ceipt. Our last daily run to the Division will be at 4:00

p.m., in order to get across town to meet their 5:00 p.m. closing time.

In response to the apparent conflict between the two statutes, the Division requested that the Texas Attorney General pro-vide the agency with an opinion regarding the status of phar-macy benefit managers after January 1, 2011. The Commis-sioner asked that the AG address two specific questions. First, the Commissioner asked whether a workers’ compensa-tion insurance carrier may, after January 1, 2011, contract with health care providers to pay for a “prescription drug, medicine, or other remedy” at a lower fee rate than the fee rates allowed under the Texas Department of Insurance, Divi-sion of Workers’ Compensation's fee guidelines. If so, the Commissioner asked whether insurance carriers may contract with informal or voluntary networks, as defined by TEX. LAB. CODE ANN. §413.0115 to obtain those contractual agree-ments.

We anticipate that one or more legislators will file bills in-tended to clarify that PBMs are authorized to pay pharmacy benefits at rates different from the Division fee schedule so long as the pharmacy has a contract in place with the PBM that supports the payment of a different rate. We believe that this legislation will be filed and pursued regardless of the AG’s ultimate opinion, so that no question exists in the future regarding these bills.


The Division Revises DWC-66 Form

The Texas Department of Insurance, Division of Workers’ Compensation (TDI-DWC) has revised the DWC Form-066, Statement of Pharmacy Services. Pharmacies and pharmacy processing agents submitting paper medical bills to insurance carriers must use this form, or a mutually agreed upon alternate form, on or after Au-gust 1, 2011. Pharmacy bills submitted using older versions of the form after this date may be returned by in-surance carriers. The DWC Form-066 is available for download from the TDI website at www.tdi.state.tx.us/forms/form20medical.html.

The form was revised to conform with adopted, amended 28 Texas Administrative Code (TAC) §133.10, con-cerning Required Billing Forms/Formats. The adoption will be published in the February 18, 2011 issue of the Texas Register and may be viewed at the time at www.sos.state.tx.us/texreg/index.shtml. The adoption is cur-rently posted on the TDI website at www.tdi.state.tx.us/wc/rules/adopted/index.html.

If there are any questions regarding the information in this memo, contact Christopher Bean at (512) 804-4704 or [email protected] or Allen McDonald at (512) 804-4530 or [email protected].


QUESTIONS & ANSWERS - FO&L ANNUAL CLIENT SEMINAR 2011 -

PLANO EVENT

Question #1: Which PLN form should be used to take your third-party recovery holiday?

Answer: Use a PLN-9 to suspend the indemnity benefits. However, once the third-party settlement has been exhausted, the reinstatement would be with a PLN-10

Question #2: Does the post-DD RME doctor have to be in the network?

Answer: No. In fact, the post-DD RME may not be a doctor from the claimant’s certified healthcare network. See §1305.101(b). A network doctor may not perform a required medical examination nor may a network doctor serve as a des-ignated doctor.

Question #3: To see if the claimant can return to work in any capacity, are you required to fill in dates on DWC-32?

Answer: Yes and no. If the requesting party wants to know whether the claimant could return to work in a specific job, then the specific dates must be identified. However, if the requestor is not limiting the question to a specific job, then the specific dates are not required.

Question #4A: Does the DWC review the designated doctors assigned with regard to the HCN membership?

Answer: Generally no. If the claimant is in a certified healthcare network, the requesting party should identify the name of the workers' compensation healthcare network in Box #27 on the DWC-32. The Division assumes that the parties are prop-erly completing the DWC-32s. Thus, DWC’s staff does not routinely check to see if the designated doctor identified on the EES-14 is in the claimant’s certified healthcare network. In fact, there would be no reason for them to check it, since in the absence of the information, DWC will not know that the claimant is in a certified healthcare network, much less the identity of that network.

Question #4B: What if the designated doctor is part of a group and the group shows up in the HCN listing but not the indi-vidual doctor?

Answer: In this situation, the doctor appointed as the designated doctor should not be appointed. If he is in a group/clinic that is in a certified healthcare network, then he should not be appointed as the designated doctor even though he is not spe-cifically identified in the network.

Question #5A: I have just been verbally advised that a spinal surgeon will not fill out any workers' compensation forms. What recourse does a carrier/TPA have in this situation? It is too soon for a designated doctor due to spinal surgery.

Answer: It is not clear from your question what specific workers' compensation forms the doctor will not complete. If the doctor performs surgery, if he wants to be paid, he will have to submit a copy of his operative report (for fees in excess of $500). However, the operative report is not a specific workers' compensation form. His billing must be filed on required billing forms and in formats in accordance with the Division’s policies. For professional services, he would complete a


CMS-1500. If he provides an opinion on work status, then he should prepare a DWC-73.

Question #5B: Can a carrier/TPA request a change of treating doctor?

Answer: There is no provision in the Texas Labor Code that permits a carrier to request a change of treating doctor. See §408.022 of the Texas Labor Code.

Question #6A: Can the employer have a policy/agreement with the drug-testing facility to preserve positive tests for a spe-cific period of time?

Answer: Some employers have an understanding with the provider or testing facility to preserve testing results.

Question #6B: If we get a billing for medications that are definitely unrelated (e.g. birth control pills) because the phar-macy is just billing the last place they billed anything, do we have to file a PLN on extent? Answer: If you are disputing a bill for extent of injury, it is a violation of Rule 133.240(g) to not have a PLN-11 on file that has raised an extent of injury dispute. Under your set of facts, it is certainly absurd to require the filing of the PLN-11, but the failure to do so exposes the carrier to potential fines.

Question #7: When you deny a bill on extent of injury and the designated doctor opines in favor of the claimant, are we to keep a log of the denied bills to reference in order to generate a new EOB? What is the clerical process in order to avoid the fine/violation?

Answer: Each carrier and/or TPA will need to develop and implement its own procedures to handle the adoption of this new rule. The rule is 127.10(h). Carrier has 21 days to reprocess medical bills previously denied for reasons inconsistent with the designated doctor’s report. The most common example occurs when a carrier has disputed a bill for extent of injury and then the designated doctor opines that the disputed injury is compensable. For those bills in which the carrier has previ-ously denied the services on extent of injury, the carrier will need to reprocess an EOB within 21 days of its receipt of the designated doctor’s report.

Question #8A: Is the OIEC subject to complaints or administrative complaints?

Answer: Unlike carriers, healthcare providers and claimant’s attorneys, an Ombudsman is not subject to any specific viola-tions under Chapter 415 of the Texas Labor Code unless there is some element of fraud involved.

Question #8B: If the OIEC files SIBs applications for 7 past quarters at once, is that a fraudulent claim for benefits? Under the new rules, how is the above situation handled? File 7 BRC requests?

Answer: Although it is unusual, it is not unheard of to file multiple quarters of SIBs at one time. The fact that multiple DWC-52s are being filed suggests that the filings may not have been timely. However, that does not preclude the claimant or his Ombudsman from filing them. The carrier’s liability is limited to those periods for which the DWC-52s are timely filed.

Question #9: Can we, and should we, avoid having a spouse or family member provide nursing or other healthcare ser-vices?


Answer: A claimant is entitled to his choice of healthcare. §408.021 of the Texas Labor Code provides that an employee who sustains a compensable injury is entitled to all healthcare reasonably required by the nature of the injury as and when needed that: cures or relieves the effects naturally resulting from the compensable injury or promotes recovery or enhances the ability of the employee to return or retain employment.

There is a long history of claimants receiving nursing services or nursing care from their family when they have significant injuries that require medical treatment in a home setting. If the services are necessary, generally those services can be pro-vided by a family member, and are reimbursable.

Question #10: With regard to death benefits, does the eligible parent have to be dependent (financially) on the claimant prior to death in order to receive death benefits? Answer: No. However, an eligible parent, but one who is not dependent, is entitled to receive death benefits only until the earlier of: (1) the date the eligible parent dies; or (2) the date of the expiration of 104 weeks of death benefit payment. A dependent parent is entitled to benefits until the earlier of: (1) the date of death of the beneficiary; or (2) the expiration of 364 weeks of death benefit payments. Changes to allow eligible parents to receive death benefits became effective on Sep-tember 1, 2007 with an additional amendment on September 1, 2009.

Question #11: What is an HCN gap claim? If the injury occurred prior to the employer enrolling in the HCN, is this an HCN claim?

Answer: Injuries occurring before September 1, 2005 can be moved into the network at the carrier’s election. Continuity of care issues should be carefully evaluated. Injuries occurring after the employee has received the notice of network require-ments, and during a policy period in which the policy has received a network endorsement, are considered network claims. Injuries falling between the two dates are “gap” claims, and according to the Department, may not be transitioned into the network.

Question #12: I work for a hospital and on occasion the employees fail to report their injury to the employer, but the em-ployees report the injury to the doctor. Can the claim be denied for failing to physically turn in an injury report?

Answer: If the doctor is a hospital employee, the injury has probably been reported timely. If the claim is not filed with the DWC within one year, a late filing defense may apply. However, exceptions to late filing may permit claimant to recover.

Question #13: Does a nurse have to have CCM behind their name or is nursing degree enough? Does a nurse need to get certified for CCM?

Answer: DWC has now passed Rule 137.5 regarding case management. Nurses who perform case management must be credentialed and certified in accordance with the rule. The rule is effective September 1, 2011.

Question #14: Does Collins v. Indemnity Insurance Company of N. America apply to flight attendants who are “dead-heading” to pick up a flight they will work that will originate in a different city?

Answer: The case may apply to those facts. It is important to have more details in order to be sure.

Question #15: With regard to Rule 127.10(g), if the employee decides to begin treatment for a disputed body part and/or condition after the designated doctor has opined in their favor with regard to same, is the carrier obligated to pay those new


bills while they are perhaps requesting an LOC or BRC and are maintaining their position? Answer: Yes. The designated doctor’s opinion controls under this situation. Question #16: If a claimant elects to treat out of network, what would you consider “credible” regarding the documentation their non-network doctor provides? What does the DWC consider credible? Answer: Any evidence of disability from any source should be considered. If the report is legally invalid, other evidence may apply. Question #17: Must the claimant’s acknowledgement of employer participation in the network be written? Answer: A network acknowledgement must be in writing. However, claimant’s failure to sign an acknowledgement will not prevent the claim from network rules if the employer can prove delivery through a standardized process of notification. Question #18: Can you notify claimant of employer network status upon carrier notice of claim if no notice of network was given before injury? Answer: Yes, according to Tex. Ins. Code §1305.005(h). However, the employer must still notify in order to comply with the Act. Question #19: If a “medical only” claim is investigated the same as a lost time claim, is a wage statement needed? Answer: Yes and no. There is a disconnect between the statutory authority and the rule authority. §408.063(b) provides that no later than the 30th day after the date the employer receives notice of an injury, the employer shall file a wage statement. Compare that to Rule 120.4(a),which requires that the wage statement be filed with the carrier, the claimant and the claim-ant’s representative within 30 days of the earliest of the date the employer is notified that the employee is entitled to income benefits or the date of the employee’s death as a result of a compensable injury. Thus, the statute requires the production of a wage statement based upon notice of an injury; whereas the rule re-quires the production of a statement based upon notice of entitlement to income benefits, i.e. that the claimant is disabled. When there is an inconsistency between a statute and a rule, the statue controls. However, we have discussed this issue with DWC’s Complaint Resolution Intake Unit, and it has taken the position that whichever date is the later date is the date that the Division will apply. The wage statement would be required to be produced no later than the 30th date following that later date. Question #20: A DWC-73 is a work status report but provider does not give any information in 13 a/b/c only diagnosis and next scheduled appointment in referral. Can this be denied with “documentation provided is insufficient to accurately re-view the charges”? Answer: No. The existence of disability is independent of the existence of a properly completed DWC-73. Question #21: How long do you have to pay for DWC-73 after IR? Less than 15%. After SIBs runs? Over 15%. LIBs? Answer: The carrier is required to pay for DWC-73s as long as Rule 129.5 continues to require that the document be cre-ated. However, the payment of a DWC-73 would depend upon the provider submitting DWC-73s that are in accordance with Rule 129.5. If the DWC-73s are being submitted inconsistent with the requirements of Rule 29.5, then that would con-stitute a basis for disputing the bill.


QUESTIONS & ANSWERS - FO&L ANNUAL CLIENT SEMINAR 2011 -

HOUSTON EVENT

Question #1: If a claimant chooses to dispute an IRO decision regarding specific treatment which was denied and upheld by the IRO as not reasonable and necessary and is inconsistent with the Official Disability Guidelines (ODG), can he request a CCH to pursue, or is he required to pursue through District Court? Please clarify.

Answer: The appeal of an IRO decision is to either a CCH or to the State Office of Administrative Hearings (SOAH). The cases appealed to SOAH are limited to retrospective medical necessity disputes involving amounts greater than $3,000. All other medical necessity disputes would be appealed through a CCH. This includes all prospective medical necessity dis-putes and retrospective medical necessity disputes of $3000 or less. However, once the claimant has exhausted all of his administrative remedies, he may seek judicial review. See Rule 133.308(t).

Question #2: If an employee is returned to work without any restrictions, can the employer restrict the employee’s job ac-tivities and limit the employee’s overtime?

Answer: There may be ramifications with respect to the carrier and the employer. With respect to the employer, this is a question best handled by an employment lawyer. With respect to the carrier, if the claimant is released to return to work without restrictions, the carrier will most likely take the position that the claimant no longer has disability. However, “disability” means the inability, because of a compensable injury, to obtain and retain employment at wages equivalent to the pre-injury wage. Thus, if a claimant returns to work with post-injury earnings that are less than his pre-injury average weekly wage, the claimant will most likely claim that he is disabled. The resolution should come down to whether the loss of wages is due to the compensable injury or due to something else.

Questions #3: What is an example of wording to use on designated doctor requests on “change” if no active medical treat-ment since a previous designated doctor exam and the anticipated date is now met?

Answer: Box #29 on a DWC-32 requires that if there was a previous designated doctor exam, the requesting party must explain if there is any change of medical condition since that examination. The purpose of that box is to determine if there has been any change on the matrix. In your situation, if there has been no active medical treatment since the previous desig-nated doctor examination, and there is no change on the matrix, you would write “non-applicable” in Box #29.

Question #4: Since we cannot ever “close” Texas Claims – I have a claim that happened in Texas. The Carrier has busi-nesses in Texas and Louisiana. The claimant lives and treats in Louisiana. If claimant ever wants to settle his claim, can he elect to change benefits to Louisiana?

Answer: Your question concerns Louisiana workers' compensation law. You will need to request that information from an attorney who practices Louisiana workers' compensation law. However, if the case were reversed and the claimant had been receiving Louisiana benefits, but now wanted to receive Texas benefits, he would be entitled to do so subject to certain limi-tations. If he previously elected to pursue his remedy in Louisiana and recovered benefits under those laws, to a final con-clusion, he would not be able to recover Texas benefits. But if the claimant received Louisiana benefits without making an election, he could pursue Texas benefits but the carrier would be entitled to a credit against the benefits being received in Louisiana. See §406.075 of the Texas Labor Code.


Question #5: How do you find out what your PBO rating is?

Answer: Go to the website for the Division of Workers' Compensation. Once there, click on the “DWC Homepage.” Then go to “Quick Start.” Currently, performance-based oversight is the ninth entry under “Quick Start.” If you click it, it will take you to the PBO assessments for carriers for 2009 and 2010.

Question #6: If you do not have a PLN-11 on file, but do have a peer review on file, does the carrier owe if the procedure was preauthorized? If not preauthorized?

Answer: The issue of preauthorization merely resolves the issue of whether the procedure or service is medically necessary. If the procedure or service is approved, then the issue of medical necessity has been resolved, (i.e. the procedure or service is medically necessary. The carrier may raise any other defenses available to it on an EOB. However, if the carrier’s EOB is going to raise an extent of injury dispute), a PLN-11 must be on file concurrently with or prior to the filing of the EOB. Thus, if a carrier has preauthorized a service (which means that it is medically necessary), and the carrier prior to filing an EOB, has a PLN-11 on file that has raised extent of injury, the carrier may deny the bill for the pre-authorized service on the basis of extent of injury. If the carrier does not have a PLN-11 on file but files an EOB disputing the service (whether it is preauthorized or not) on extent of injury, this is a violation of Rule 133.240(g).

Question #7: What is the probability that Ruttiger will be found in favor of the carrier?

Answer: We would prefer not to speculate on the ultimate holding. The Supreme Court recently requested additional brief-ing from parties in other cases that may be impacted by the Ruttiger Decision. This will probably delay the decision.

Question #8: On a disputed claim, can we request an RME on causation (compensability) before a designated doctor is re-quested?

Answer: No. There are two types of carrier RMEs. The first type is an exam to resolve questions about the appropriateness of healthcare received by the claimant. A designated doctor may not be appointed to resolve that issue. Thus, the carrier is entitled to an RME on that issue without first having to go through the designated doctor process. The second type of RME is to evaluate a designated doctor’s determination on issues listed under §408.0041. A carrier is entitled to an exam with an RME under that subsection only after a designated doctor exam. A request for an RME on compensability is one of the evaluations listed under §408.0041.

Question #9: Rule 141.1(d)(2) – Rather than a phone call, are letters (regular mail) and emails more beneficial in support-ing carrier’s efforts prior to BRC?

Answer: The Division requires supporting documentation of the requestor’s efforts to resolve the disputed issues. Any documentation that supports the proposition that efforts were made to resolve the disputed issue should be sufficient. A let-ter or an email does not necessarily demonstrate the efforts any better than a phone call. However, the email or letter is in and of itself, the documentation to support the effort, whereas a phone call would require the requestor to reduce that con-versation to a written document.

Question #10: Any issues encountered when policy is non-network on date of injury and later an endorsement to be a net-work claim is added making the claim network? What about reverse of this? Any legal battles fought to date regarding this?

Answer: This is an issue of particular sensitivity to the Department of Insurance. TDI staff has taken the position that a claim cannot be a network claim unless the policy was endorsed with the HCN endorsement on or before the date of injury.


No case or administrative ruling has been issued to implement this policy to date. However, taking a position that is con-trary to TDI staff’s position may result in a complaint and possible administrative violation.

Question #11: If claimant loses only 14 days, do you pay Weeks 1 and 2?

Answer: Great Question. Assuming that Week 1 is the waiting period and Week 2 is the Initial Pay period. The Initial Pay period is due on the 7th day after the 8th day of disability. If a claimant has 14 days of lost time, TIBs would be due for the second week. The answer to whether the carrier owes Week 1, is more difficult. DWC’s interpretation is that the waiting period is due if a claimant has 14 days of disability. There is an argument that the first week is not due until the claimant has 15 days of disability. However, unless you want to challenge the Division’s interpretation, we recommend that you pay the first week if the claimant has at least at 14 days of disability.

Question #12: What are third-party pharmacy vendors entitled to? We get phone calls requesting body regions huts, etc.

Answer: Pharmacy processing agents under §413.0111 often act in lieu of the pharmacy when attempting to obtain reim-bursement. You should confirm coverage in response to such calls. Confirmation of coverage does not waive your right to further review of the claim. Rule 134.504(f).

Question #13: Is there an easy way (or will DWC allow) individual employers to enroll and utilize the HCN on an OCIP or CCIP? Is it mandatory that every enrolled participant do an individual rollout or can it be done at the project level?

Answer: Neither the Texas Healthcare Network Act nor Department rules explain whether the network may be rolled out of the project level. This certainly makes sense within the OCIP business model, but it is difficult to predict the Department’s response absent more specific rulemaking.

Question #14: If an employer has enrolled their employees and then participate in an OCIP, can they utilize it for those working on the OCIP if it is with the same carrier?

Answer: The employer and the project manage should have a clear understanding whose network is obligated to cover em-ployees who are injured on an OCIP job. More importantly, the carrier whose network is responsible should have a network endorsement and the employees on the project should have been given a copy of the correct Notice of Network require-ments.

Question #15: How do networks differ if employer is self-funded? Or if employer has employer clinic?

Answer: The Texas Healthcare Network Act does not distinguish between self-funded and guaranteed cost policies. If the employer utilizes or operates a clinic and wants its employees to be eligible to treat with providers from that clinic, the clinic should be credentialed and contracted with the Network.


Texas Division of Workers’ Compensation

Appeal No. 101903 Under Rule 130.102(d)(2), an injured employee who has not met at least one of the work search requirements in any week during the qualifying period is not entitled to SIBs, unless the injured employee can demonstrate that she had rea-sonable grounds for failing to comply with the work search requirements under this section. The Appeals Panel will re-view the hearing officer’s discretion to determine if there is sufficient evidence to show that the claimant did have rea-sonable grounds for failure to meet the job search requirements.

Facts: Claimant applied for a quarter of Supplemental Income Benefits, and the qualifying period ran from May 28, through August 26. Claimant did not work during the qualifying period. The claimant’s theory of entitlement to SIBs for the quarter was active participation in a vocational rehabilitation program (VRP). The quarter was disputed and the issue of entitlement was the subject of a hearing. In evidence was an IPE entered into in April, with DARS. The employment goal in the IPE was identified as social work and the services to be provided by DARS included counseling and guidance services leading to employment, counseling, tuition, assistance with the purchase of books, and services leading to em-ployment arranged with Workforce Solutions. The start dates of the services to be provided began on the date the IPE was started, and were anticipated to end well after the qualifying period. The claimant’s responsibilities in achieving the employment goal in the IPE included in part that she maintain at least a 2.0 G.P.A. and 12 credit hours each semester, submit grades to her counselor, and obtain and maintain employment.

The claimant completed 12 credit hours in the spring school semester, from January to May 12, 2010, and then began classes again on July 21, 2010. The claimant testified that she did not attend school during the qualifying period from May 28, through August 26. Claimant testified that she did not look for work or attend summer school during the quali-fying period because her DARS counselor did not require it. Claimant testified that her DARS counselor wanted her to review the math she had learned in the spring semester to prepare for her upcoming math course in the 2010 fall semes-ter. As evidence of her self-study, claimant submitted a log for the qualifying period, in which she noted her daily self-study of a math workbook, symptoms of pain, or laying on the couch. In evidence was a letter from the DARS represen-tative stating that the claimant was actively participating with DARS during the qualifying period, and that DARS did not require its consumers to attend summer school. The DARS counselor further stated that the claimant reported to her counselor that she spent her summer sharpening her math skills.

The hearing officer made a specific written finding regarding whether the claimant had reasonable grounds for failing to make 5 or more job contacts during each week of the qualifying period for the quarter of SIBs. In the discussion section of her decision and order, the hearing officer stated that claimant presented evidence that her DARS counselor did not expect her to make job contacts during the summer, and noted claimant’s daily activities during the qualifying period. The hearing officer concluded that claimant had shown that during each week of the qualifying period, she had reason-able grounds for failing to make any required job contacts because she complied with the directive of her DARS coun-selor by studying independently. The hearing officer determined that the claimant was entitled to SIBs for the quarter. The self-insured employer appealed and the claimant responded, urging affirmance.

Holding: Reversed and rendered. Under Labor Code §408.1415(a)(1), to be eligible to receive SIBs, a recipient must provide evidence satisfactory to the Division of active participation in a VRP conducted by the Department of Assistive and Rehabilitative Services (DARS) or a private vocational rehabilitation provider. A VRP, also known as an Individual Plan for Employment (IPE) at DARS, includes, at a minimum, an employment goal, any intermediate goals, a descrip-tion of the services to be provided, the start and end dates of services, and the injured employee’s responsibilities for the successful completion of the plan. Rule 130.102(d)(1)(A) through (D) provides that an injured employee can demon-strate an active effort to obtain employment by meeting at least one or any combination of the following work search


requirements each week during the entire qualifying period: A) return to work; B) active participation in a VRP; C) ac-tive participation in work search efforts conducted through the Texas Workforce Commission; or D) active work search efforts documented by job applications. The Appeals Panel noted that the preamble to Rule 130.102 emphasizes the requirement that the claimant demonstrate an active effort to obtain employment by meeting at least one or any combination of the work search requirements found in Rule 130.102(d)(1)(A) through (D) “each week during the entire qualifying period.” Under Rule 130.102(d)(2), an injured employee who has not met at least one of the work search requirements in any week during the qualifying period is not entitled to SIBs, unless the injured employee can demonstrate that she had reasonable grounds for failing to com-ply with the work search requirements under this section. The Appeals Panel noted that the reasonable-grounds provision was added to allow a hearing officer to retain discretion to determine if the claimant had reasonable grounds for failure to meet the job search requirement. The Appeals Panel noted in the instant case, the IPE covered the entire qualifying period, and the only activity per-formed was self-study of a math workbook. The Appeals Panel noted that self-study was not part of her IPE. The Ap-peals Panel indicated that it could not agree under the facts of this case that the claimant has reasonable grounds for fail-ing to comply with the work search requirements of Rule 130.102. Therefore, the Appeals Panel reversed the hearing officer’s determinations that during the qualifying period the claimant was enrolled in and satisfactorily participating in a full-time VRP and that claimant had reasonable grounds for failing to make five or more job contacts during each week of the qualifying period because it was so against the great weight and preponderance of the evidence as to be clearly wrong and manifestly unjust. The Appeals Panel rendered a new decision that the claimant is not entitled to SIBs for the quarter.


Appeal No. 101945 According to Guevara v. Ferrer, 247 S.W.3d 662 (Tex. 2007), City of Laredo v. Garza, 293 S.W.3d 625 (Tex. App.—San Antonio 2009), and City of San Antonio v. Pollock, 284 S.W.3d 809 (Tex. 2009), when there is an attenuation of neck symptoms, expert medical evidence is required to explain how a work injury caused or aggravated a C5-6 herniated disc, and bare or baseless opinions would not support a judgment even if those opinions were admitted into evidence without objection.

Facts: Claimant sustained a work injury when she slipped and fell in 2003. An extent of injury dispute arose over cervi-cal C5-6 disk herniation. The evidence submitted at the CCH showed that the claimant was initially treated by three doc-tors in 2003, but their records were not in evidence. The only record in evidence from 2003 concerning the neck was a cervical spine MRI that showed a diffuse disc bulge at the C5-6 level. Claimant offered evidence of Dr. A, who treated her in 2004. Dr. A reported an unremarkable cervical exam, but ordered a repeat MRI, which showed a herniation at the C5-6 level. Dr. A’s records did not provide any explanation for why the claimant’s fall at work in 2003 caused or aggra-vated a C5-6 disc herniation. Claimant also offered medical evidence from Dr. P, who opined that the C5-6 herniation was a result of the claimant’s work injury. Dr. P stated that the claimant had a disc herniation with an osteophyte at C5-6 that has been there since the time of injury. Dr. P also stated that the HNP at C5-6 was not degenerative disc disease. Claimant offered evidence from Dr. Z, a neurosurgeon, who stated that the claimant slipped on a wet floor and fell back-wards, resulting in pain to her back and back of the head. Dr. Z also stated the injury to the cervical spine was related to the work related injury. A designated doctor Dr. R was appointed by the Division to determine the extent of the compensable injury. Dr. R opined that the compensable injury was a HNP at L4-5 and a cervical strain superimposed on cervical spondylosis. In response to an LOC request, Dr. R opined that the cervical injury was only a cervical strain and the spondylosis was a


pre-existing condition and not a part of the compensable injury. Another LOC request was made to show earlier medical records prior to 2008, but Dr. R was deceased, and there was not a request to appoint a new DD. The hearing officer determined that the DD’s report did not have presumptive weight because he did not have any medi-cal records prior to 2008. The hearing officer also stated that based on the complaints of the claimant of radiating neck pain, the early diagnostic testing results of the cervical spine, and the opinions of the treating physicians, the opinion of the DD was overcome by a preponderance of the evidence. The hearing officer determined that the injury included a C5-6 herniated disc. The carrier appealed the hearing officer’s extent-of-injury determination. The claimant responded, urg-ing affirmance. Holding: Reversed and rendered. The Appeals Panel noted that because there were no medical records in evidence of neck complaints until March 2004, there was an attenuation factor in this case. Because of the attenuation factor, the conclusion that the claimant’s fall would cause or aggravate a C5-6 disc herniation was a matter beyond common knowl-edge or experience and required expert medical evidence. (See Guevara v. Ferrer, 247 S.W.3d 662 (Tex. 2007) and City of Laredo v. Garza, 293 S.W.3d 625 (Tex. App.—San Antonio 2009)). The Appeals Panel reviewed the expert medical evidence and opined that the evidence failed to explain how the fall at work caused or aggravated a C5-6 herniated disc and failed to address the change in size of the herniation from one exam to another. In review of the submitted medical evidence, the Appeals Panel found that the hearing officer’s determination that the injury included a C5-6 disk herniation was based on conclusory medical evidence. In following City of San Antonio v. Pollock, 284 S.W.3d 809 (Tex. 2009), the Appeals Panel found that bare, baseless opinions would not support a judgment even if there is no objection to their admission in evidence. Accordingly, the Appeals Panel held that the hearing officer’s extent-of-injury determination was against the great weight and preponderance of the evidence, it reversed the hearing officer’s decision, and it rendered a new decision that the injury does not include a C5-6 disk herniation.


Appeal No. 110074 Under the definition of course and scope of employment in §401.011(12), if an employee is required to live on the em-ployer’s premises as a condition of employment, and the evidence establishes that an injury was sustained while going from one on-premises work station to another on-premises work station, then the employee is engaged in the furtherance of the employer’s business, and sustained an injury of a kind and character that originated in the employer’s business.

Facts: Claimant was employed as Director of Physical Plant at the employer’s college. Claimant and employer had a written agreement that stated that as a condition of employment as a director, he shall live on-campus in housing pro-vided by the college. The agreement explained that the condition to live on campus was necessary because there were occasions where he needed to respond quickly to prevent damage to the college’s physical plant or to people. Claimant sustained an injury while in his on-campus home after he checked the college’s heating, lighting and air systems from his employer-provided home computer, and then exited his back door to the carport to drive to his campus office in his em-ployer-furnished truck. While in his carport, he tripped and fell. This injury was disputed by the employer on grounds that the injury did not occur in the course and scope of his employment because claimant was not furthering the affairs of the employer at the time this occurred. A CCH took place on the issue of compensability, with the facts noted above. On the issue of course and scope, the self-insured employer relied upon Gray Insurance Co. v. Jones, 2009 Tex. App. LEXIS 1640 (Tex. App.—Beaumont 2009, pet. denied) where a roughneck was not in the course and scope of employ-ment when he had the option of either going off the rig or staying in an employer-provided crew house on the rig, and was injured in the crew house while off duty. The hearing officer made an unappealed finding of fact that the claimant was injured in a fall at his home. The hearing officer found that at the time of his fall, claimant was departing his home to drive to his campus office and was not fur-thering the business of the employer. The hearing officer held that the claimant was not injured in the course and scope of his employment. Claimant appealed, contending that a condition of his employment required him to live on the em-


ployer’s premises and therefore he was in the course and scope of his employment at the time of the injury. The self-insured responded, urging affirmance.

Holding: Affirmed in part as reformed regarding disability, and reversed and rendered in part on compensability. The Appeals Panel disagreed with the determination that claimant was not furthering the affairs of the employer. The Ap-peals Panel noted that under §401.011(12), “course and scope of employment” means an activity of any kind or character that has to do with and originates in the work, business, trade, or profession of the employer and that is performed by an employee while engaged in or about the furtherance of the affairs or business of the employer, and that the term includes an activity conducted on the premises of the employer. The Appeals Panel noted that according to Deatherage v. Inter-national Insurance Company, 615 S.W.2d 181, 182 (Tex. 1981), a claimant must meet two requirements: 1) the injury must have occurred while the employee was engaged in or about the furtherance of the employer’s business; and 2) claimant must show that the injury was of a kind and character that had to do with and originated in the employer’s work, trade, business or profession. The Appeals Panel distinguished the Jones case relied upon by the employer because the worker in Jones had a choice to go home or stay at the crew house, and the Jones case contained no evidence that the act resulting in his injury was an act that had to do with and originated in the work, business, trade, or profession of the employer. To the contrary, the Appeals Panel found the claimant in this case was required to live on campus as a condition of his job. The Appeals Panel found this case more similar to its prior decision, APD 050874-s, wherein the claimant worked out of her home and on the morning of the injury she had logged on to her computer, confirmed her assignment and contacted the first customer before she departed from her home and sustained injuries in an MVA. (See Evans v. Illinois Employers Ins. Of Wausau, 790 S.W.2d 302 (Tex. 1990)(finding that once injured employee had begun work leaving the home of-fice to go to his campus office was just going from one work station to another)). The Appeals Panel reasoned that the claimant in that case was benefiting the employer at the time of the MVA because the employer was billing the client for the claimant’s travel time and claimant had begun the work day. The Appeals Panel reasoned in this case that claimant had actually begun to work when he checked the employer’s heating, lighting and air conditioning systems on his home computer in the housing provided by the employer. The Appeals Panel found that the determination that claimant was not furthering the business of the employer was incorrect as a matter of law, and accordingly reversed the decision and rendered a new decision that the claimant did sustain a compensable injury.


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James Sheffield 435-2169 867-1703 JRS Sharissa Karol 435-2224

Jeremy Lord 435-2184 867-1711 JXL Anita Drake 435-2249

Kevin MacEwan 435-2166 867-1706 KEM Sharon Barton 435-2233

Kevin Poteete 435-2163 867-1728 KSP Brandi Senters 435-2219

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Nancy Ippolito 435-2181 867-1721 NHI Kristi Wilson 435-2263

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Pamela Pierce 435-2152 867-1736 PEP Shannon Burgess 435-2298

Rebecca Strandwitz 435-2160 867-1720 RMS Gina Flowers 435-2241

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A PRIVILEGED ATTORNEY—CLIENT COMMUNICATION BY …FOLIO CLIENT NEWSLETTER BY FLAHIVE, OGDEN &...

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