WHITE ESPEY, PLLC PRIMA PRESENTATION Texas Workers Compensation Trends

1. WHITE ESPEY, PLLC PRIMA PRESENTATIONTexas Workers Compensation Trends Camille Espey Thurman Williams

2. OVERVIEW • Facts and Figures in the Industry • Legislative Changes: 2013, 2015 • Success Stories • Surprising Elements of the Texas Workers Compensation system • Recap: Employer Rights and Responsibilities White Espey, PLLC 2014

3. WORKER’COMPENSATION STATISTICS

4. IR 15% OR GREATER

5. IR ABOVE 15% 69% reduction in ten years 84% reduction since peak year (2001) 5% decline from last year (7% decline in injuries Ramifications Lower IIBS and attorney fees Lower SIBs

6. INITIAL SIBS APPLICATIONS

7. SIBS 76% reduction in SIBS apps over last ten years (80% drop from 2002 peak) 69% reduction in initial SIBS approval (75% drop since 2002 peak) 22% decline since last year Ramifications Lower SIBS and attorney fees Impacts attorney fees in JR

8. BRCS

9. BRC DWC reported lower revised figures to me from 2012 62% ten year decline 63% decline from peak in 2003 3% decline from last year On pace for a decline this year Ramifications Number of BRC are levelling off Don’t know what impact the scheduling order process will have

10. CCHs

11. CCH 18% decline ten year decline 5% increase from last year Since2010 32% increase in hearings Not including the number of CCHs requiring management (in 2010, 45% decline from 2004) Ramifications Hearing officers are busy

12. 53% drop in hearings since 2004 But, a 22% increase in hearings since 2010 HEARINGS

13. PERCENTAGE OF MMI/IR/EXTENT

14. % OF CONCLUDED BRC’s THAT ARE RESOLVED BY CCH

15. PERCENTAGE OF MMI/IR/EXTENT

16. % OF ISSUES ARE MMI/IR/EXTENT

17. DWC DATA • 43% reduction in PLN-1since 2005 • Ruttiger? • 33% reduction in injuries? • 70% reduction in MDR since 2003 • 76% reduction in DWC-45s • 44% of all claims in 2003 • 17% of all claims in 2013

18. ATTORNEY FEES

19. ATTORNEY FEES CLAIMANTS .6% increase from 2012 5% increase from 2010 BUT 16% decrease from 10 years ago CARRIER 5% increase from 2012 36% increase form 2010 19% increase from ten years ago Smallest difference between claimant and carrier BUT audits and reverse actions

20. The Texas Legislature and • Workers’ Compensation White Espey, PLLC 2013

21. WHAT TO EXPECT IN THE 2015 LEGISLATIVE SESSION… • First Responder Bills…like HB 365 & HB 1091 • Public Projects Bills…like HB 475 & SB 740 • Political Subdivision Bills…like HB 1430 & HB 1697 & SB 1205 …I’ve seen these before White Espey, PLLC 2014

22. Expanded Presumption for First Responders HB 365 would make several changes to the presumption that certain workers who sustain injuries did so while in the course and scope of employment. First, this bill would remove the “strenuous activity requirement” to invoke the myocardial infarction presumption. This bill would also create an additional presumption that any firefighter or EMT who contracts AIDS, HIV, Hep B, Hep C or MRSA did so while in the course and scope of employment as long as there was potential exposure to said disease during a call or response. Considered in House White Espey, PLLC 2014

23. Tougher Presumption for First Responders HB 1091 would entitle former firefighters or EMTs to a presumption that an injury was sustained while in the course and scope of employment as long as the claim was reported within 5 years of leaving the position as a firefighter or EMT. This bill, although probably not the intent of the drafter, would put a deadline on reporting work-related diseases by former firefighters and EMTs. Died in committee White Espey, PLLC 2014

24. First Responders in the news • DWC Recognizes 2014 Star of Texas Award RecipientsAUSTIN, TX • The Division of Workers’ Compensation (DWC) recognizes the 2014 recipients of the Texas Star Award which honors peace officers, firefighters and emergency medical first responders who have been seriously injured or killed in the line of duty. Governor Rick Perry presented these awards to selected first responders and their families on September 2, 2014.  The 78th Legislature created the awards in 2003 by the passage of House Bill 1937 and recipients are selected by three advisory committees appointed by the Governor.“Every year first responders are injured or killed in the line of duty while working to save lives and keep our communities safe,” said Commissioner of Workers’ Compensation Ryan Brannan. “Our job is to ensure that the workers’ compensation system is available to those injured employees and their families and that every injured employee receives all of the benefits that they are entitled to under the law.” White Espey, PLLC 2013

25. Coverage Please HB 475 & SB 740 would require contractors and subcontractors to carry workers’ compensation insurance when performing public projects. HB 475- Died in committee SB 740- Read only White Espey, PLLC 2014

26. You Can’t Fire Me HB 1430 & HB 1697 & SB 1205 would prevent an employer from discharging, indefinitely suspending, or terminating from employment a peace officer, detention officer, county jailer, or firefighter based on the person’s inability to perform their job duties as a result of a compensable injury, before the person is certified as having reached maximum medical improvement. An adverse action made by the employer as described would result in damages and reinstatement of the employee. HB 1430- Considered in House HB 1697- Died in Committee SB 1205- Read only White Espey, PLLC 2014

27. What WE Want to See Again • Suspend Some Benefits Already • Privileged Communications … I Love these bills White Espey, PLLC 2014

28. Go to the DD…or else HB 1155 would authorize insurance companies to suspend all income benefits if an employee fails to submit to an examination by a designated doctor. The current law only allows suspension of temporary income benefits, not impairment or supplemental income benefits. Considered in House White Espey, PLLC 2014

29. This is Just Between Us HB 1468 & SB 926 would make certain communications between an insurance carrier and an employer confidential and privileged. This bill is in response to In re XL Specialty Insurance Company and Cambridge Integrated Services Group, Inc., in which the Texas Supreme Court found that communications between an insurance carrier’s attorney and the insured (employer) were not privileged. HB 1468- Passed in House, pending in Senate SB 926- Read only White Espey, PLLC 2014

30. What WE Don’t Want to See… • Immunity Waiver Bills…like HB 1424 • Impairment Bills…like HB 2249 & SB 1077 • or HB 2629 & SB 1051 • Attorney Fee Bills…like HB 2787 & SB 1550 (some version of these carrier-pay bills are filed every session) • Waiver Bills…like 2630 • Bad Faith Bills…like SB 1049 …please don’t pass these White Espey, PLLC 2014

31. Goodbye Immunity? HB 1424 would waive a governmental entity’s immunity from retaliation lawsuits brought by first responders. This would effectively overrule the Texas Supreme Court’s decision in Travis Central Appraisal District v. Norman as it relates to first responders. Considered in House White Espey, PLLC 2014

32. LIBs Entitlement HB 2249 & SB 1077 would qualify injured workers for Lifetime Income Benefits if they receive an impairment rating of at least 85% or more according to the AMA Guides. HB 2249- Read only SB 1077- Read only White Espey, PLLC 2014

33. Spinal ROM? HB 2629 & SB 1051 would require the Division to use the range of motion model to determine impairment in the lumbar spine instead of the injury/DRE model. (However, this bill states the range of model method as used in the 6th edition of the AMA Guides is to be used; the Division’s Rules currently only permit ratings from the 4th edition to be used. SB 1051 corrects this oversight.) HB 2629- Left pending SB 1051- Read only White Espey, PLLC 2014

34. Pay My Attorney HB 2787 & SB 1550 would require insurance carriers to pay an injured worker’s attorney’s fees in medical necessity disputes brought for judicial review. HB 2787- Left pending SB 1550- Read only White Espey, PLLC 2014

35. More Waiver? HB 2630 would create an additional period in which a carrier can waive its ability to dispute an injury if a timely dispute is not filed. Currently, the waiver period only applies to the first 60 days following an injury. The carrier waives into the diagnoses that exist within the first 60 days if a dispute is not filed by the 60th day. This bill would create an additional 60-day waiver period (following the initial 60-day waiver period) for all new manifestations of the original injury, additional injuries, or additional diagnoses. Failure to dispute within this new 60-day period would result in a carrier’s waiver of its right to contest the extent or compensability of the new manifestation of the original injury, additional injury, or diagnosis. Read only White Espey, PLLC 2014

36. Bad Faith SB 1049 would allow bad faith claims to be brought in workers’ compensation cases. Died in committee White Espey, PLLC 2014

37. 2013 Legislature: What Did Pass • HB 1762 allows a temporary employment service to extend coverage to all employees assigned to a client. • HB 2645 prohibits an independent review organization from publicly releasing patient information that is protected by HIPAA and requires IROs to be established in and maintain a physical address and mailing address in Texas and to be in good standing with the comptroller. • HB 3152 requires persons serving as both a management contractor for a network and as an agent of a health care provider to specify in the contract the certified network’s contract rate for health care services and the amount of reimbursement the health care provider will be paid after the health care provider agent’s fee for providing administrative services is applied. • SB 1322 allows the creation of limited ancillary service networks for durable medical equipment or home health services. White Espey, PLLC 2013

38. 2013 Legislature: What Did Pass SB 381 prohibits the misuse of the name or symbol of the Division of Workers’ Compensation of the Texas Department of Insurance in a deceptive manner on a business document. It prohibits individuals from using the following phrases in a deceptive manner: • the words “Texas Department of Insurance,” “Department of Insurance,” “Texas Workers’ Compensation,” or “division of workers’ compensation”; • any term using both “Texas” and “Workers’ Compensation” or any term using both “Texas” and “Workers’ Comp”; • the initials “T.D.I.”; or • any combination or variation of the words or initials, or any term deceptively similar to the words or initials. White Espey, PLLC 2013

39. Success Stories • A. Using the treating doctor to testify: Hight • Developing relationships with health care providers • B. Taking the Time to Meet with the Attorney: Hancock • C. Battling the Deranged Designated Doctor: Hopens • D. Shut Down Treatment, Shut Down the Claim: Wrobel • Relationships with health care providers, Part 2 • E. Lesser of Two Evils: Extent vs. DD: Hutchton White Espey, PLLC 2013

40. Surprising Elements of Texas Workers’ Compensation • Is Bad Faith Dead? (Ruttiger); Walking Dead? (Palmer) • An employee who can open doors and carry groceries with his hands can nevertheless qualify for LIBS based on total and permanent loss of use of both hands (DeLoss) • An employee is not required to present any medical evidence to prove that he/she sustained a sprain/strain injury. • Injuries sustained while merely sitting, standing or walking at work may be compensable. White Espey, PLLC 2013

41. More Surprising Elements • Dispute resolution is issue-driven. The parties may go to ten or twelve administrative hearings, or more, on one claim. Every issue may be appealed through six levels: BRC (mediation), CCH (administrative trial), Appeals Panel (administrative appeal), judicial review (District Court), Court of Appeals, Texas Supreme Court. Appeals through the first three levels are common; appeals through the last three levels are rare. • In an appeal to District Court, the Carrier may pay the Claimant’s attorney’s fees if the Carrier loses. White Espey, PLLC 2013

42. Employer’s Rights • Receive notice of an injury within 30 days of the date of injury • Unless: • 1. Good cause exists. • 2. The employer has actual knowledge of the injury. • 3. The claim isn’t denied. White Espey, PLLC 2013

43. Employer’s Rights • Contest compensability of a claim if the insurance carrier accepts liability • Be notified of a proposed settlement • Attend and offer evidence at hearings • Report suspected fraud to the TDI/DWC • Receive return-to-work coordination services to facilitate an employee’s return to work White Espey, PLLC 2013

44. Employer’s Responsibilities • Notify employees of workers compensation coverage • Post Notices at each work site • Give written notice to all employees • Usually part of the hiring packet • Report work-related injuries and illnesses • Within eight days of notice of injury, file a DWC-1 Form (First Report of Injury) with the insurance carrier: • For a specific-trauma injury that results in absence from work for more than one day; • For an occupational illness, (length of absence isn’t relevant); • For a fatality. • Provide a copy to the employee White Espey, PLLC 2013

45. Employer’s Responsibilities • Report Employee’s Wages on a DWC-3 Form • File the Employee’s Wage Statement with the insurance carrier within 30 days of • The date the employer is notified that the employee is entitled to income benefits, or • The date of the employee’s death • File a subsequent wage statement within seven days of a change in wage information • Report changes in an employee’s pay or employment status to the insurance carrier • Form DWC-6 • File the form within ten days of an employee’s resignation, termination, or change in pay • File the form within three days of the date an employee begins to lose time from work as a result of an injury, returns to work, or misses additional days of work. White Espey, PLLC 2013

46. Failure to Fulfill Responsibilities Can Result In... • Document Request Letter • Unconfirmed Allegation • Violation • Enforcement Action White Espey, PLLC 2013

47. Document Request Letter White Espey, PLLC 2013

48. Unconfirmed Allegation Letter White Espey, PLLC 2013

49. Violation/Enforcement Action • Adair Grain Company of West
Order Number: DWC-2789
Date of Order:  9/30/2013
Action Taken:  Fined $500
Violation:  Failed to timely file and/or accurately complete TDI-DWC forms, reports or records White Espey, PLLC 2013

50. Most Recent Violations • Alvarado, Hilario III, M.D. of San Antonio
Order Number: DWC-2903, Date of Order:  12/16/2013
Action Taken:  Fined $2,000
Violation:  Refused to accept a TDI-DWC appointment to perform a subsequent designated doctor examination on one injured employee • Gonzales, Mary Anastasia M.D. of Austin
Order Number: DWC-2901, Date of Order:  12/16/2014
Action Taken:  Fined $500; Must complete designated doctor workshop
Violation:  Failed to correctly apply AMA Guides; Failed to document adequately in one designated doctor examination, • Lubor Jan Jarolimek M.D. of Houston
Order Number: DWC-2902, Date of Order:  12/16/2013
Action Taken:  Fined $1,000; Must complete DD workshop
Violation:  Failed to correctly apply the AMA Guides; ordered an unnecessary medical test; Failed to document an adequate narrative report White Espey, PLLC 2013