State Bar of Texas Workers’ Compensation Seminar

State Bar of Texas Workers’ Compensation Seminar Norman Darwin Public Counsel, Office of Injured Employee Counsel

TWCC v. Garcia • Chief Justice Phillips stated in TWCC v. Garcia, 893 S.W.2d 504 (Tex. 1995) that: • “…the Act [Texas Labor Code] – carrying forward the general scheme of the former act—provides benefits to injured workers without the necessity of proving negligence and without regard to the employer’s potential defenses. In exchange, the benefits are more limited than the actual damages recoverable at common law. We believe this quid pro quo, which produces a more limited but more certain recovery, renders the Act an adequate substitute for purposes of the open courts guarantee.”

Texas Mutual Ins. Co. v. Ruttiger • Justice Johnson in the case of Texas Mutual Ins. Co. v. Ruttiger, 381 S.W.3d 430 (Tex. 2012) stated that: • “…we must consider the purposes, policies, procedural requirements, and remedies of the Insurance Code and the Workers’ Compensation Act … The purpose of the Act is …to provide employees with certainty that their medical bills and lost wages will be covered if they are injured. An employee benefits from workers’ compensation insurance because it saves the time and litigation expense inherent in proving fault in a common law tort claim. But a subscribing employer also receives a benefit because it is then entitled to assert the statutory exclusive remedy defense against the tort claims of its employees for job related injuries.

Albertson’s v. Sinclair • There must be a presumption in favor of compensating workers and their dependants for injuries or death sustained while in the course and scope of their employment. • The Supreme Court stated in Albertson’s v. Sinclair, 984 S.W.2d 958, (Tex. 1999): • “…we consider the plain meaning of the words used, as well as the entire act, its nature and object, and the consequences that would follow from each construction… Further we liberally construe workers’ compensation legislation to carry out its evident purpose of compensating injured workers and their dependants. (cases cited therein)

Transcontinental v. Crump • Justice Green in the case of Transcontinental v. Crump, 330 S.W.3d 211 (Tex. 2010) stated: • “An expert may testify regarding ‘scientific, technical, or other specialized’ matters if the expert is qualified and if the expert’s opinion is relevant and based on a reliable foundation…

Transcontinental v. Crump (cont.) • We emphasized in Robinson that these factors are non-exclusive and that [Texas] Rule [of Evidence] 702 contemplates a flexible inquiry… • [T]he criteria for assessing reliability must vary depending on the nature of the evidence…

Transcontinental v. Crump (cont.) • Daller’s diagnostic methodology certainly had non-judicial uses in that it was to treat Crump, write prescriptions, and perform surgery…’[O]pinions formed solely for the purpose of testifying are more likely to be biased to a particular result’…the Robinson reliability inquiry focuses ‘solely on the underlying principles and methodology; not on the conclusion they generate.’…

Transcontinental v. Crump (cont.) • ‘to say of a cause of an injury that it is one ‘but for which the injury would not have happened is to repeat something already included in the usual and ordinary meaning of the word ‘cause.’…

Transcontinental v. Crump (cont.) • We hold that the definition of producing cause…a substantial factor in bringing about the injury or death and without which the injury or death would not have occurred --- applies in workers’ compensation cases…

Transcontinental v. Crump (cont.) • After clarifying in Staggs that the causation standard was a concurring cause, this court has not interpreted the workers’ compensation law to require any different level of causation in order for an injured employee’s disability or death resulting from a work-related injury to be compensable.

Transcontinental v. Crump (cont.) • As can be seen, the substance of the causation standard has remained the same since 1913…”

Western Casualty v. Gonzales • Western Casualty v. Gonzales, 518 S.W.2d 524 (Tex. 1975) • It should not be necessary to have a treating doctor or other provider explain how the injury has, or will, affect each anatomical component of the area of the body where the injury occurred or how the compensable event caused an injury to each such anatomical component. The court stated: “If every episode in the chain of degeneration within the body of a person had to be established in medical probability, the available expert witnesses, of either rare expertise or dishonesty, would be so few that injured persons could seldom make that proof. (emphasis added)

Merrell v. Havner • The case of Merrell v. Havner, 953 S.W.2d 706, (Tex. 1997) does not impose a “strict causation standard” on workers’ compensation cases. It was a pharmaceutical product liability case. Product liability is a common law strict liability in tort legal concept. It is a common law tort case and, as we see, in Ruttigercommon law tort cases do not now, and have never, imposed a strict liability in tort standard for proving causation in a workers’ compensation case.

Houston Independent School District v. Harrison • APD 94278 citing Houston Independent School District v. Harrison, 744 S.W. 2d 298, (Tx. App. Houston 1987) “a claimant’s testimony alone may establish that an injury has occurred, anddisability has resulted from it. [A] claimant need not meet the nearly impossible task of proving which specific task in a period or exertion at work led to the injury.”

Charter Oak Fire Ins. Co. v. Swanigan • In the case of Charter Oak Fire Ins. Co. v. Swanigan, 02-11-00147-cv, Ct. App. (Fort Worth, April 26, 2012) the court stated: • “A medical causation expert need not disprove or discredit every possible cause other than the one espoused by him…When evidence of other possible causes of the injury or condition is admitted, and that evidence could be negated, then the proponent of expert causation testimony should offer evidence negating the other possible causes…No requirement exists, however, that Swanigan’s other medical records independently establish causation.”

Continental Casualty Co. v. Baker • It has been held that an “injury” also includes “the excitement, acceleration, or aggravation of any injury, disease or infirmity or condition, previously or subsequently existing, by reason of such damage or harm… An extension injury’ has been defined as ‘injuries occurring in the probable sequence of events and arising from the actual compensable injury…Additional injuries that result from treatment instituted to relieve or cure the compensable injury are compensable extension injuries.. See Continental Casualty Co. v. Baker, No. 01-09-0081-CV, Ct. App. (Houston 2011) and cases cited therein.

Gill v. Transamerica Ins. Co. • “The Workmen’s Compensation Act, referred to by some as social legislation, was purposely designed to compensate an employee for incapacity flowing from an accidental personal injury sustained within the scope of his employment. One of the fundamental precepts of this law is that the liability arising thereunder cannot be defeated by showing the injured employee was not a well person at the time of the injury. The employer accepts the employee as he is when he enters the employment, and it is no defense to a claim for compensation that the injury would not have been as great if the employee had been in a healthy or more perfect physical condition.” Gill v. Transamerica Ins. Co., 417 S.W.2d 720, Civ. App. (Dallas 1967, no writ)

TEIA v. Page • “As for prior injury, the mere fact that a claimant has a pre-existing injury or disease which enhances or aggravates the injury complained of, does not in itself defeat his right to recover under the statute . . . To defeat Page’s claims for compensation because of the pre-existing injury, Texas employers must show that the prior injury is the sole cause of Page’s present incapacity.” TEIA v. Page, 553 S.W.2d 98, (Tex. 1977) (emphasis added)

Charter Oak Fire Ins. Co. v. Swanigan • “An expert opinion is conclusory when it offers an opinion with no factual substantiation.” Charter Oak Fire Ins. Co. v. Swanigan, 02-11-00147-CV, Ct. App. (Fort Worth, April 26, 2012)

George Washington University, Health and Health Services Study • George Washington University School of Public Health and Health Services did a study that was published on May 29, 2013. Their conclusions were:

George Washington University, Health and Health Services Study • A. “Nearly 40% of work related injuries and illnesses seen in U.S. emergency rooms are not billed to workers’ compensation—the insurance program that’s designed to cover them. An increasing number of patients suffering from injuries or illnesses caused by exposures at work are using their private insurance, paying out of pocket or billing Medicaid or Medicare, instead of filing the appropriate claim to the employers’ workers compensation insurer.” Those are the findings of a new study published in the journal Health Services Research by researchers with CDC’s National Institute for Occupational Safety and Health (NIOSH) It included studies of 22 of the States with the largest amount of workers covered by workers’ compensation, including Texas.

George Washington University, Health and Health Services Study • B. Of the 3,881 cases identified as work related, 39.65 percent were not expected to be paid by workers’ compensation insurance. For work-related injury cases, an estimated 37% were not expected to be paid by workers’ compensation, and for work-related illness cases, the estimate was a whopping 47 percent.

George Washington University, Health and Health Services Study • C. Researchers who have studied the system provide some hints about why some injured workers would rather use their private insurance or pay out of pocket than file a claim with their employers’ workers’ compensation carrier. It was noted that workers “risk disciplinary action, denial of overtime or promotion opportunities, stigmatization, drug testing, harassment or job loss for reporting an injury”.

George Washington University, Health and Health Services Study • D. Other researchers have found it to be “cumbersome, frustrating and demeaning”. It was stated that “for many workers, the workers’ compensation system is dizzying and frustrating in its complexity and apparent irrationality. While the rules may be understandable to repeat players- particularly insurers and third party administrators of claims-they are obscure to many who are caught up in the delay and denials.”

George Washington University, Health and Health Services Study • E. Another consequence is shifting the cost of work related injuries from the parties responsible (i.e. employers and workers’ compensation insurers) to other payment sources… Imagine the hundreds of millions in cost-shifting if a share of those cases billed to private insurers (21.4 percent ) belonged in the workers’ comp system.

Workers’ Compensation Research Institute • The Workers’ Compensation Research Institute has done two comprehensive studies related to Comparing Workers’ Compensation and Group Health Hospital Outpatient Payments and A New Benchmark For Workers’ Compensation Fee Schedules: Prices Paid by Commercial Insurers?” Both studies were published in June 2013.

Workers’ Compensation Research Institute • The study on fee schedules paid by commercial insurers found that Texas payments for common treatments were significantly higher than for Group Health Insurance. For instance, in Texas the workers’ comp fee schedule for a common knee arthroscopy was 24% higher than for Group Health in 2009. A common office visit was 21% higher in Texas for comp than for Group Health. During the years between 2009 and 2012 Texas was one of three states (Maryland and Michigan being the others) that had comp payments for office visits increase between 11-28% over Group Health.

Texas Department of Insurance • The analysis of the impact of the 2005 Act on medical services acknowledges the cost increases for workers’ compensation services. In their “Setting the Standard” report published in December 2012 by the Texas Department of Insurance it is stated: • “Total medical costs for professional services evaluated at six months post-injury decreased by 36 percent between its peak in 2002 and 2007, but they increased by 26 percent since 2007…

Texas Department of Insurance(cont.) • Report findings (cont.) • Similarly, total hospital costs decreased from 2002 until 2004, but increased during the years 2005 and 2008. They have remained in a level or marginally increasing trend since 2008…

Texas Department of Insurance(cont.) • Report findings (cont.) • The average professional cost per claim also decreased between its peak in 2002 and 2007, but increased significantly by 31 percent between injury years 2007 and 2011. Primary causes for these increases were increased fees for services in the 2008 professional services fee guideline, and increase in utilization for some services…

Texas Department of Insurance(cont.) • Report findings (cont.) • The results of recent injured employee surveys conducted by TDI show that a higher percentage (55 percent) reported ‘no problem’ in getting the medical care they felt they needed for their work related injury, compared with 52 percent in 2005… [Flip this figure and it reveals that 45%, or nearly half of the claimants have problems getting medical care]

Texas Department of Insurance(cont.) • Report findings (cont.) • Additionally, a slightly higher percentage (25 percent) of employees surveyed in 2012 reported that the medical care they received for their work-related injury was worse than their routine medical care when compared to employees surveyed in 2005 (19 percent)…”

Setting the Standard • It was also reported in the “Setting the Standard” paper that “Medical only claims accounted for 75 percent of all claims and 34 percent of the total costs in 2011. Lost time claims with more severe injuries accounted for the majority of total medical costs.” The hospital costs for lost time claims comprised 38 percent of all claims but accounted for 81 percent of the total costs. [Remember the 19% who claimed that their medical care was worse than their routine medical care. That was exactly one-half of the lost time claims.] Average hospital claims increased for both lost-time and medical only claims by 77 percent and 28 percent respectively (supra p. 34)

Setting the Standard • Thirty to thirty one percent of injured employees reported that between 2005 and 2012 they had a “big problem” getting medical care for their injuries...” . That is one in three of medical claimants.

Workers’ Compensation Research Institute • In the study entitled “Comparing Workers’ Compensation and Group Health Hospital Outpatient Payments” published by the Workers’ Compensation Research Institute in June 2013, it is stated in the paragraph with the heading Interpreting The Results in the Context of Workers’ Compensation Policy: • “Given that there is no obvious reason why treating an injured worker should be cheaper, and given that providers can choose whether or not to treat patients injured under workers’ compensation, policymakers in those lower cost states might want to inquire about problems with access to hospital care for injured workers.”

Workers’ Compensation Research Institute • As an example, comparative rates for workers’ compensation payments and group health payments for outpatient shoulder surgery in Texas during 2008 shows that workers compensation payments per claim were on average $6,920 and group health was $4,853. Group health payments were $2,067 less than compensation payments. Compensation payments were 43% higher than group health coverage.

Workers’ Compensation Research Institute • Workers’ compensation payments for outpatient knee surgery in 2008, was 28 percent higher than group health payments. Disputes and denials of claims will have doubled within the past three years to over 16,000 per year. Justification for those denials range from “the doctor not explaining how the event caused the injury” to the doctor’s explanation being “conclusory” and not sufficient. Limiting the injury to a mere strain/sprain when a serious injury was clearly present is also a frequent assertion in a denial of treatment.

Conclusion:

Conclusion • There has probably always been economic tension within the workers’ compensations system. Very likely there always will be. However, one cannot ignore the significance of the disparity that exists at this time. Our system must be economically fair, affordable and consistent with the statutory imperatives and judicial interpretation.

Thank you.

State Bar of Texas Workers’ Compensation Seminar