Thank you for visiting the web log of Steven J. Picardi, Esq.  For 20 years I have specialized in the representation of Colorado's largest self-insured employers in defense of workers' compensation claims. This web log is designed to keep workers' compensation professionals informed about recent developments in workers' compensation law and practice. It is updated twice monthly, to provide you with the most recent information for your success in defending your cases.

If you have any questions you would like addressed in this blog, please don’t hesitate to Contact Me at the Law office of Steven J. Picardi, P.C.

Authorized Treating Physician Issues Upon Alleging a Worsening of Condition
Posted by: Clay Thornton
December 21, 2011
Topic: Picardi Web Log

In the recent decision of Loofbourrow v. Industrial Claims Appeals Office, 10CA2176 (Oct. 13, 2011), the Court of Appeals held that the respondents' initial designation of a treating physician at the time of injury was not sufficient to retain control of the authorized treating physician when the claimant alleged a worsening of condition after discharge from care.

Loofbourrow suffered a work related back injury in November of 2008, and the employer timely designated an authorized treating physician. In December 2008, the authorized treating physician placed the claimant at MMI with no permanent impairment and released her from care. In March 2009 Claimant saw her personal physician for treatment to her back. In August 2009, the claimant went to the emergency room for her back pain and followed with more treatment by her personal physician. Claimant then reported to the employer that her personal physician believed that her back pain was causally related to the injury in November 2008. The employer did not refer the claimant to a physician. In October 2009, the claimant filed an application for hearing seeking authorization to return to the original authorized treating physician designated by the respondents at the time of the original injury. The employer finally provided medical treatment in January 2010, but the claimant continued to subsequently treat with her personal physician.

The ALJ found that the right of selection of the authorized treating physician passed to the claimant in August 2009 because the employer refused to provide medical treatment after the claimant had alleged a worsening of her November 2008 injury. Therefore, the claimant's personal physician became the new authorized treating physician. The ICAO and the Court of Appeals affirmed the ALJ's decision. The Court of Appeals found that it was uncontested that the adjuster did not authorize a return to the ATP when the claimant complained of a worsening in August 2009, or after receipt of the claimant's application for hearing. However, the employer argued that because it properly designated an ATP in November 2008, the claimant was free to return to the ATP when her symptoms worsened and was not required then to seek the employer's permission. However, the Court rejected this argument. The claimant testified that the adjuster told her not to return to the ATP when she reported her worsening symptoms, and, therefore, it would have been futile for the claimant to seek additional treatment with the ATP when she reasonably believed such treatment would be denied. Instead, the Court held that C.R.S. 8-43-404(5) requires employers and adjusters to essentially re-designate an ATP when a claimant alleges a worsening of an injury for which the claimant had previously been released from care.

The holding is somewhat fact-specific, since the Administrative Law Judge relied upon the claimant's testimony that the adjuster explicitly told her not to return to the ATP. Thus, is not clear if an employer would be held to this requirement if a claimant was still actively treating with the authorized provider. However, the lesson here is "better safe than sorry." When a claimant alleges a worsening of a previously-resolved injury, the best practice is to complete the designated provider paperwork again, even if the claimant chooses the same provider. The time this process takes is well worth the problems it can avoid down the road, since a change in the authorized treating physician can result in significant treatment expenses and a reopening of disability benefits to the claimant.

Major Change to Computation of Time Requirements

Workers’ Compensation Rule of Procedure 1-2 provides that computation of days is consistent with Rule 6 of the Colorado Rules of Civil Procedure. There has been a major change to the way time is computed in the Rules of Civil Procedure, which will affect deadlines to file documents or take action in workers’ compensation cases.

Previously, Colorado Rule of Civil Procedure (C.R.C.P.) 6 provided that “Unless otherwise specifically ordered, when the period of time prescribed or allowed is less than eleven days and not specified as “calendar days”, intermediate Saturdays, Sundays, and legal holidays shall be excluded in the computation. This change will affect many deadlines in the Workers’ Compensation Act which are less than ten days and not specified as “calendar days”. For example:

• 8-42-107.2(c), requiring supplemental medical records to be submitted to the Division IME physician no later than seven days prior to the independent medical examination;
• 8-43-101(1) and W.C.R.P. 5-2, requiring the employer to file a First Report of Injury within ten days of notice of an injury resulting in permanent impairment, lost-time injury to an employee of more than three shifts or calendar days, an occupational disease listed in W.C.R.P. 5-2, or notice or knowledge of a claim for benefits that has been denied;
• 8-43-215(1), requiring a request for full Findings of Fact, Conclusions of Law and Order withing seven days of mailing of a Summary Order;
• 8-43-406(1), requiring a lump sum calculation to be mailed within ten days of a request for lump sum by the claimant;
• W.C.R.P. 8-11(F), providing the employer ten days to respond to a claimant’s request for information to be redacted from an IME audio recording;
• W.C.R.P. 11-11(A)(4), providing the respondents eight days after a request for indigent determination to file a response to the request;
• W.C.R.P. 11-11(B), requiring the insurer to provide payment to the Division IME within ten days of the Division IME where the claimant has been determined indigent.

Importantly, these changes will not affect the W.C.R.P. 16 utilization standards (denying treatment for medical or non-medical reasons) or W.C.R.P. 8 change of authorized treating physician provisions, as those rules of procedure specifically designate the time computation of deadlines as “business” days. While the term “business days” is not same as “calendar days”, the term “business days” will apply, since the Rules of Civil Procedure apply in workers’ compensation cases only to the extent they are not inconsistent with the Workers’ Compensation Rules of Procedure.

Update on Online Submission of Medicare Set-aside Proposals
Posted by: Steve Picardi
November 22, 2011
Topic: Picardi Web Log

The Centers for Medicare & Medicaid Services (CMS) has completed its Pilot Testing of the Workers' Compensation Medicare Set-aside Portal (WCMSAP). CMS will be conducting a Town Hall conference call on November 29, 2011 from 1:00 to 3:00 pm (EST), to introduce this initiative to submitters of proposed Workers' Compensation Medicare Set-Aside Arrangement (WCMSAs) amounts, and to answer questions regarding the WCMSAP. After the Town Hall conference call, CMS will post the links of the WCMSAP application, and the WCMSAP Computer Base Training (CBT) Modules, on the Workers' Compensation Medicare Set-aside Portal (WCMSAP) section page "Related Links Outside CMS."

The call in information for the WCMSAP Town Hall teleconference is:
Call In Line: 1-(800) 603-1774
Conference ID: 29840615
Participants must use the Conference ID number to be allowed into the call.

Kirsten Frazier is Moving On...
Posted by: Steve Picardi
November 11, 2011
Topic: Picardi Web Log

After five years of exemplary service, Kirsten Frazier is moving to the California coast to get far away from the snowy winters of Colorado. Kirsten’s last day is Thursday, November 17. We wish Kirsten the best of luck in this new phase of her life.

Please join us in welcoming Kirsten’s replacement, Janele Leece, who joined the firm on November 11. Janele is returning to the workforce after having taken time off to be home with her two boys. Janele formerly worked as the Division Clerk and Office Manager for the Arapahoe District Court in Centennial, Colorado, in addition to running her own retail boutique. We are confident that she will be up to speed quickly on the firm’s cases, but it may be a few weeks before her e-mail address is established. Therefore, if you have any specific case-related questions you may want to contact the attorneys these first few weeks.

New Life Tables for Use in Workers' Compensation Medicare Set-aside Arrangements
Posted by: Steven Picardi
October 24, 2011
Topic: Picardi Web Log

The Centers for Disease Control recently published its 2007 United States Life Tables. Therefore, effective October 31, 2011, the Centers for Medicare & Medicaid Services will apply CDC's 2007 Table for all life expectancy calculations in any newly submitted or reopened Workers' Compensation Medicare Set-Aside Arrangement. You may access the CDC's United States Life Tables here."

Claimant’s Attorney or Vocational Expert Precluded from Attending Respondents’ Vocational Evaluation or Recording Evaluation
Posted by: Steven Picardi
October 13, 2011
Topic: Picardi Web Log

It is a common practice in workers’ compensation claims for a claimant’s counsel to attend the vocational evaluation of the respondents’ vocational expert. Some claimant’s attorneys even attempt to have their own expert present at respondents’ vocational evaluation. This practice results in significant advantages for the claimant in a claim for Permanent Total Disability benefits: the claimant’s attorney can give verbal and non-verbal clues to the claimant during the interview or otherwise obstruct the right of the vocational expert to obtain information from the claimant, permits the claimant’s attorney to monitor the thought processes of the vocational expert, and allows the claimant’s attorney to prepare claimant’s vocational expert to address issues which arise in respondents’ vocational evaluation.

At a prehearing conference on October 12, I obtained a Protective Order prohibiting claimant’s attorney and vocational expert from attending respondents’ vocational evaluation and denying claimant’s attorney’s motion to record the vocational evaluation. Section 8-43-404(1) provides that "the employee shall from time to time submit to examination by a physician or surgeon or to a vocational evaluation, which shall be provided and paid for by the employer or insurer...". Section 8-43-404(2)(a) provides that "The employee shall be entitled to have a physician, provided and paid for by the employee, present at any such examination. If an employee is examined by a chiropractor at the request of the employer, the employee shall be entitled to have a chiropractor provided and paid for by the employee present at any such examination." Rules of statutory construction state that when the legislature includes a provision in one statute, but omits that provision from another similar statute, the omission is evidence of the legislature’s intent that such provision is not applicable to both sections of the statute. Therefore, I argued that if the legislature wanted to provide a claimant the right to have an attorney or vocational evaluator present, it would have stated that intent in §8-43-404(2)(a); since the legislature provided the right for attendance of only a physician or chiropractor indicates the legislature’s intent that there is no right to have an attorney or vocational expert present at a respondents’ vocational evaluation. The Prehearing ALJ agreed, and granted a protective order prohibiting claimant’s attorney and vocational expert from attending respondents’ vocational evaluation. Likewise, since § 8-43-404(2)(a) provides for audio recording by a physician only, the Prehearing ALJ denied Claimant’s request to require respondents’ vocational expert provide an audio recording of the vocational evaluation.

Claimant’s attorney has indicated that he will appeal the Prehearing ALJ’s ruling, so this issue might be decided by the Court of Appeals. Nonetheless, the protective order will eliminate the prejudice to respondents from having claimant’s attorney and vocational expert present at the vocational evaluation or from having an audio recording of the vocational evaluation, and adjusters might want to consider filing such a motion in their cases.

Reserving Issues for Future Determination: More Mud in the Water
Posted by: Steven Picardi
October 10, 2011
Topic: Picardi Web Log

My September 19, 2011, web log entry discussed a recent Court of Appeals case affirming the ALJ’s finding that a claimant’s failure to litigate certain issues after a Final Admission of Liability was not a waiver of those issues because the Administrative Law Judge’s Order included a statement that issues not decided in the Order were reserved for future determination. My conclusion recommended that adjusters reexamine whether it is necessary to file a Final Admission of Liability after an ALJ enters an Order deciding issues at a hearing, since the Final Admission of Liability after the Order reserving issues might nullify the reservation language. A recent opinion of the Industrial Claim Appeals Office further address the problems surrounding the reservation of issues language by holding that the reservation of issues is not an appealable order. Teeter v. Craig Holiday and Food Beverage, W.C. No. 4-658-335 (September 21, 2011).

In Teeter, the Administrative Law Judge decided all issues which had been endorsed for hearing, but still included the phrase “All matters not determined herein are reserved for future determination.” The respondents filed a Petition to Review, arguing that ALJ erred in including this language because the parties did not reserve any issues for determination (implicitly arguing that the reservation of issues language defeats the requirement that a claimant endorse all issues ripe for hearing within 30 days of the Final Admission of Liability). The Industrial Claim Appeals Office held that the language reserving issues for future determination is an interlocutory order since neither benefits nor penalties are granted or denied by the language. Therefore, ICAO dismissed the appeal without prejudice.

Under Teeter, the reservation of issues language effectively prevents the case from closure, because all issues not decided were reserved for future determination. Furthermore, if the claimant is entitled to treatment after MMI, the Director may not issue a Show Cause Order in response to a Petition to Close, because § 8-43-207(1)(n) provides that a Claimant is deemed to have failed to prosecute the case “if there has been no activity by the parties in the case for a period of at least six months.” Thus, a claimant may be able to argue that closure is not appropriate since obtaining medical treatment is some activity in furtherance of prosecution.

As discussed in my last post, the reservation of issues language can be negated by filing a Final Admission of Liability denying liability for all benefits not specifically admitted once the Order reserving issues has become final (i.e. no appeal is filed, or once an appeal has become final). Section 8-43-203(2)(b) still requires a claimant to file an Application for Hearing for on all issues ripe for hearing within 30 days of the Final Admission of Liability. Therefore, if a claimant does not file an Application for Hearing on an issue ripe for hearing within 30 days of the Final Admission of Liability, the all issues will be closed.

New Jersey Court Affirms Award of Death Benefits for Woman Who Died Sitting at Her Desk
Posted by: Steven Picardi
September 22, 2011
Topic: Picardi Web Log

The family of a New Jersey woman who died of a pulmonary embolism while sitting at her desk for 10 hours was awarded workers' compensation death benefits. The woman died when a blood clot that formed in her leg moved to her lung. The husband filed the workers' compensation claim, alleging the clot formed while his wife was working at her desk. Despite having an enlarged heart, weighing over 300 pounds and recently starting birth control pills (all known risk factors for development of a pulmonary embolism), the claimant's experts testified that the clot formed during the overnight hours when she was working. Therefore, the New Jersey appellate court found the death was caused by work. Unfortunately, it is not entirely clear from the decision whether the experts found that the clot formed as a result of sitting for 10 hours, or simply while she was sitting for 10 hours. There is a distinct difference in terms of causation analysis; conditions that develop during work normally are not compensable unless they are caused by work.

While the ruling has little relevance on Colorado law, it may be consoling to know that the decisions of other states appears to be just as difficult to reconcile with the law and theory regarding the cause of a workplace injury.

ALJ's Reservation of Issues for Future Determination
Posted by: Steven Picardi
September 19, 2011
Topic: Picardi Web Log

The right to request additional benefits usually is waived if not raised by a claimant in an Application for Hearing filed within 30-days after a Final Admission of Liability (or, in the case of maintenance medical benefits, at the time that Permanent Partial Disability benefits are decided). However, the Court of Appeals recently determined that the failure to raise issues at hearing is not a waiver of benefits if an Administrative Law Judge's Order includes a statement that issues not decided in the Order are reserved for future determination. Hire Quest v. Industrial Claim Appeals Office, ___ P.3d ___ (Colo. App. 2011) (10CA2450, September 15, 2011).

In Hire Quest, the employer filed an Application for Hearing endorsing the issue of Permanent Partial Disability benefits to challenge the Division IME physician's impairment rating. Claimant did not endorse the issue of maintenance medical benefits in the Response to Application for Hearing. After hearing the Administrative Law Judge entered an Order which awarded Permanent Partial Disability benefits. The ALJ also included a statement that "Issues not expressly decided herein are reserved to the parties for future determination." Employer paid Permanent Partial Disability benefits consistent with the ALJ's Order without filing a Final Admission of Liability.

The claimant later filed an Application for Hearing seeking maintenance medical benefits. The employer endorsed the issue of waiver because the claimant had not endorsed the issue at the first hearing when Permanent Partial Disability benefits were decided, relying upon Hanna v. Print Expediters Inc., 77 P.3d 863, 866 (Colo. App. 2003). (the right to future medical benefits may be waived if not requested at the time permanent disability is heard.). The ALJ deciding the second hearing found that the claimant did not waive the right to request maintenance medical benefits because the first ALJ had reserved issues not expressly decided at the first hearing. The Industrial Claim Appeals Office affirmed. The Court of Appeals affirmed the second ALJ's Order finding that the claimant had not waived the right to seek maintenance benefits because the first ALJ's Order reserved issues not expressly decided at the first hearing (interestingly, the Court of Appeals' decision is devoid of any analysis as to whether or when an ALJ has the authority to reserve issues not endorsed for hearing).

This decision should cause adjusters to reexamine whether it is necessary to file a Final Admission of Liability after an ALJ enters an Order deciding issues at a hearing. Usually it is not necessary to file a Final Admission of Liability after entry of an Order by an ALJ, and adjusters oftentimes pay benefits from the Order without filing a Final Admission of Liability. However, if the Order reserves issues for future determination, it may benefit the client to file a Final Admission of Liability consistent with the Order, because the Act requires the claimant to set the matter for hearing on all issues ripe for determination within 30 days of the Final Admission of Liability. Therefore, even if an ALJ reserved issues for future determination in the Order, the claimant still will be required to litigate all issues within 30 days of the Final Admission of Liability.

18-Month Division IME Opinion on Permanent Impairment May Not Be Entitled to Any Weight
Posted by: Steven Picardi
September 2, 2011
Topic: Picardi Web Log

A respondent may request a Division IME to consider whether an injured worker has reached Maximum Medical Improvement when 18-months have passed since the date of injury and the authorized treating physician has not determined that the employee has reached Maximum Medical Improvement. An Administrative Law Judge recently determined that the legislature did not intend to modify the existing procedure by which the authorized treating physician makes the initial determination of permanent impairment even after an 18-month Division IME establishes Maximum Medical Improvement. Therefore, the Administrative Law Judge struck the respondents' Final Admission of Liability which terminated Temporary Total Disability benefits and admitted for the impairment rating of the Division IME physician. The practical effect of the Order required respondents to return the injured worker to the authorized treating physician for an impairment rating.

The respondents appealed the Order to the Industrial Claims Appeals Office. However, because the Order of the Administrative Law Judge merely struck the Final Admission of Liability and did not award or deny benefits, the Industrial Claim Appeals Office determined that the Order was not a final order subject to review, and dismissed the appeal without prejudice.

Baca v. Alstom, Inc., W.C. No. 4-741-529 (August 3, 2011). It is important to appreciate that the Industrial Claim Appeals Office did not affirm the Administrative Law Judge's determination that an 18-month Division IME may not determine permanent impairment. Thus, technically the ICAO order is not persuasive authority on the issue. Nonetheless, it is instructive on how at least one Administrative Law Judge will interpret the 18-month Division IME provision found at § 8-42-107(8)(b)(II).

Former Colorado Physicians Indicted in Narcotic-Related Deaths of 4 Patients
Posted by: Steven Picardi
August 25, 2011
Topic: Picardi Web Log

A federal grand jury has issued indictments against Sam Jahani, DO, and Eric Peper, MD, who worked out of urgent-care centers in Montrose, Delta, and Grand Junction. The indictment alleges the two physicians prescribed controlled substances (including oxycodone, alprazolam, diazepam, and fentanyl) to known drug addicts "in such strengths and quantities that their prescribing became a contributing factor in the patients' overdose deaths." The indictment further alleges that the physicians falsified medical records and overbilled third-party payers, including insurers and third-party administrators, for their services, as well as submitting claims for services never rendered. The charges stem from prescriptions written between January 1, 2006, and April 30, 2010.

Adjusters who have had claims in Montrose, Delta, or Grand Junction where either of these two physicians were prescribing medications or treatment during this time period, you might want to check with the US Attorney's Office for the District of Colorado to discuss potential rights, including a right to restitution.

Increase in Maximum Penalty Amount Applicable to Conduct Occurring After Effective Date of Amendment
Posted by: Steven Picardi
July 26th, 2011
Topic: Picardi Web Log

The general penalties statute, § 8-43-304(1), increased the maximum penalty award from $500 per day to $1,000 per day, applicable to "conduct occurring on or after the applicable effective date" of the bill (August 11, 2010). In Kilpatrick v. Employment Express Professionals, W. C. No. 4-804-152 (June 28, 2011), the Industrial Claim Appeals Office affirmed ALJ Mottram's award which increased the daily penalty from $350 per day prior to August 11, 2010, to $700 per day beginning August 11, 2010. The Respondent argued that the increase applied the statutory amendment retroactively. However, ICAO agreed with ALJ Mottram's analysis that the amendment applied to conduct occurring after the applicable date of the bill, and affirmed the increased daily penalty. This case stands as a reminder that conduct occurring after August 11, 2010, may expose a respondent to a daily penalty as high as $1,000 per day, even if the conduct giving rise to the penalty started before the effective date of the amendment to § 8-34-304(1).

Closure of Issues Despite Subsequent Final Admission of Liability
Posted by: Steven Picardi
July 7th, 2011
Topic: Picardi Web Log

A claimant's failure to endorse issues on an Application for Hearing in objection to a Final Admission of Liability will close those issues, despite a subsequent Final Admission of Liability. Craig v. Mini-Mart, Inc., W. C. No. 4-604-109 (June 14, 2011). In Craig, Respondent filed a Final Admission of Liability admitting liability for Permanent Partial Disability benefits based on the impairment rating of the Division IME physician. The claimant timely objected to the final admission and applied for a hearing on the issues of disfigurement, penalties for failure to admit for disfigurement benefits, and overpayment. Two months after the initial Final Admission of Liability, respondent filed an amended Final Admission of Liability identical

to the first admission except that it changed the disfigurement amount and included an attachment supporting the asserted overpayment of temporary total disability benefits. Claimant objected to the amended Final Admission of Liability and set the matter for hearing on various issues, including Permanent Total Disability benefits.

The Industrial Claim Appeals Office affirmed the Administrative Law Judge's determination that the issue of Permanent Total Disability benefits was closed by Claimant's failure to endorse that issue on the Application for Hearing filed in response to the first Final Admission of Liability. ICAO held that requiring a specific objection to individual aspects of the final admission is consistent with the statutory scheme which contemplates the closure of specific issues addressed by the admission. See Dalco Industries, Inc. v. Garcia, 867 P.2d 156 (Colo. App. 1993); Drinkhouse v. Mountain Board of Cooperative Education

Services, W.C. No. 4-368-354 (February 7, 2003), aff'd Drinkhouse v. ICAO, (Colo. App.

No. 03CA0438, March 4, 2004) (not selected for publication). The subsequently filed amended Final Admission of Liability did not reopen all issues addressed in the amended Final Admission of Liability.

This case is important to remember when considering revising a Final Admission of Liability. If the claimant did not endorse an issue on an Application for Hearing in response to a prior Final Admission of Liability, then filing a revised Final Admission of Liability will not reopen all issues automatically. Only if the revised Final Admission of Liability changes a previously closed issue will it potentially reopen that issue.

New Maximum Rates for Benefits for Injuries On or After July 1, 2011
Posted by: Steven Picardi
June 21st, 2011
Topic: Picardi Web Log

Paul Tauriello, Director of the Colorado Division of Workers' Compensation, has issued the yearly Order setting forth the new maximum compensation rates for the fiscal year starting July 1, 2011. The state Average Weekly Wage is $909.95, resulting in a maximum benefit rate of $828.03 per week. The rate for calculation of Permanent Partial Disability benefits for scheduled injuries has increased to $260.59. The disfigurement maximum has increased to $4,396.00, or up to $ 8,792.00 for extensive facial or body scars, burn scars or stumps resulting from the loss of limbs, pursuant to §8-42-108, C.R.S. Please remember that these figures apply to injuries occurring on or after July 1, 2011.

For injuries occurring on or after January 1, 2012, the statutory cap on combined temporary and Permanent Partial Disability benefits has increased to $76,605.00 for claimants whose impairment is twenty-five percent or less and $153,210.00 for claimants whose impairment is greater than twenty-five percent, pursuant to §8-42-107(6)(b), C.R.S.

Governor Signs Senate Bill 11-199
Posted by: Steven Picardi
June 21st, 2011
Topic: Picardi Web Log

Governor Hickenlooper signed Senate Bill 11-199 into law on May 23, 2011. The Senate Bill contains four provisions:

Section 1 amends § 8-42-107(8) by adding subsection (f), which requires an employer or insurer to admit liability for reasonable, necessary and related medical benefits after Maximum Medical Improvement where:

1) such benefits are recommended by an authorized treating physician;
2) such benefits are provided by an authorized treating physician; and
3) there is no contrary medical opinion in the record. C.R.S. § 8-42-107(8)(f)

This section of the law is applicable to injuries on or after May 23, 2011.

Section 2 eliminates the requirement of § 8-43-207(1)(e) that parties agree to discovery where both sides are represented. Since this is a procedural change, it is applicable to all claims regardless of the date of injury. A party now may serve discovery on any represented party without having to obtain an agreement from the other party.

Section 3 amends § 8-43-404(b)(I)&(II) by requiring all respondents obtaining an Independent Medical Examination at the respondents’ request to provide advance payment of estimated travel expenses to the injured worker, if requested, and provides that failure to provide travel expenses in accordance with the section constitutes grounds for refusal by the claimant to attend the IME. In addition, if the injured worker fails to attend the examination after the respondents provided advance payment of travel expenses, the respondents may deduct the advance payment from future indemnity benefits. Section 3 applies to non-Division IMEs scheduled on or after May 23, 2011, where a travel advance is requested by the claimant.

Section 4 amends the applicability of section 8 of Senate Bill 10-187 (enacted in 2010, which prohibited the Director or Administrative Law Judge from conditioning a lump sum payment on the claimant waiving the right to pursue permanent total disability benefits) to extend to all claims regardless of the date of injury.

Administrative Law Judge May be Precluded from Determining Which Body Parts Included in Claim
Posted by: Steven Picardi
June 16th, 2011
Topic: Picardi Web Log

The Industrial Claim Appeals Office issued a confusing and somewhat inconsistent opinion which held that an Administrative Law Judge was precluded from determining whether the claimant's neck and shoulder problems were causally related to the admitted injury where the authorized treating physician had placed the claimant at Maximum Medical Improvement. Wright v. C&J Gravel, Inc., 4-766-736 (June 3, 2011). The opinion by Industrial Claim Appeals Office is difficult to decipher, as it contains conflicting information regarding the underlying facts, so it is difficult to anticipate whether the case will have an impact on the procedure for determining causation in future cases.

In Wright, it appears the respondents admitted the reasonableness and necessity of the claimant's treatment to her upper extremities, but denied authorization for a "repeat" cervical MRI. Therefore, the claimant applied for a hearing requesting medical benefits for her neck and shoulder. After claimant applied for the hearing, the authorized treating physician placed at maximum medical improvement for her left wrist and elbow, but "continued to treat the claimant's neck and shoulder complaints." Respondents filed a Final Admission of Liability admitting liability for the wrist problems only, and Claimant requested a Division IME.

The Administrative Law Judge credited the authorized treating physician's opinions and found that the claimant's complaints of neck and shoulder pain were causally related to her industrial injury. He therefore ordered the respondents to pay for reasonable and necessary medical treatment related to the claimant's neck and left shoulder. Respondents appealed, arguing that the Administrative Law Judge did not have jurisdiction to consider medical benefits without a Division IME. The Industrial Claim Appeals Office held that Claimant's request for additional medical treatment was precluded by her attainment of MMI and her pending Division IME. ICAO also held that "the ALJ effectively determined the extent of the claimant's industrial injuries notwithstanding the treating physician's determination that the claimant had reached MMI."

The Industrial Claim Appeals Office decision specifically indicates that the authorized treating physician opined that the claimant's neck and shoulder condition were caused by the industrial injury, but that the claimant was at Maximum Medical Improvement for her wrist injury. Thus, the case is confusing because it appears to ignore the well-settled point of law that an Administrative Law Judge does have jurisdiction to determine whether the authorized treating physician has placed the Claimant at MMI. Thus, since the authorized treating physician opined that the claimant's neck and shoulder conditions were related to the industrial injury and "continued" to treat those conditions (implying that the authorized treating physician had been treating those conditions prior to finding the claimant at MMI for the wrist condition), there is an ambiguity as to whether the authorized treating physician had placed Claimant at MMI for all conditions, which the Administrative Law Judge did have jurisdiction to determine.

It is possible that the Industrial Claim Appeals Office did not address the issue of the Administrative Law Judge's jurisdiction to determine whether the authorized treating physician placed Claimant at MMI because the claimant did not raise the issue at hearing. Therefore, it is difficult to determine whether this case has any impact on the future procedure for determining whether certain body parts are causally related to the injury. Nonetheless, it is something that should be kept in mind when faced with an Application for Hearing to determine whether additional body parts should be included in the claim.

IME Communication with a Treating Physician
Posted by: Steven Picardi
June 3rd, 2011
Topic: Picardi Web Log

A recent Industrial Claim Appeals Office case raised an interesting issue regarding the propriety of a respondents' IME physician communicating with a claimant's treating physician. In Balfour v. Oakwood Homes Limited Liability Co., W. C. No. 4-718-516 (May 19, 2011), the claimant moved to strike respondents' IME physician's report and testimony because the IME physician communicated with one of the claimant's treating physicians without notifying the physician that he was not a treating physician and without notifying the claimant of the communication. The Administrative Law Judge refused to strike the expert's report and testimony because the claimant failed to show a violation of Samms v. District Court (which sets forth a defense attorney's obligation to provide to a claimant reasonable notice of communication with a treating physician an opportunity for claimant to be present) and failed to show that the IME physician obtained information protected by the physician-patient privilege. The Industrial Claim Appeals Office affirmed the ALJ's ruling, finding that the ALJ has wide discretion in evidentiary matters.

The case is important in that it raises an issue which, under appropriate circumstances, may result in an expert's report being stricken. While in the Balfour case the Administrative Law Judge refused to strike the expert's report based on the facts surrounding the communication, it is possible that an Administrative Law Judge might strike a respondent's expert report under different circumstances. The issue is further complicated by the recent amendments to § 8-43-404(5)(a) (prohibiting a treating physician from communicating with the employer or insurer [which may include an insurer's expert witness] unless (1) the injured worker is present for the communication; or (2) "the treating physician makes an accurate written record of the communication, containing all relevant and material information that was communicated, and provides the injured worker access to the writing in the same manner as medical records disclosures as required by director rules."]. Thus, it may be necessary to caution experts not to communicate with treating physicians unless they provide notice to the claimant or ensure the treating physician "makes an accurate written record of the communication" pursuant to § 8-43-404(5)(a).

ALJ's Order Determining Body Parts Injured May not Limit the Claim to Those Body Parts
Posted by: Steven Picardi
May 27th, 2011
Topic: Picardi Web Log

An Administrative Law Judge's finding that a claimant sustained a compensable injury to certain body parts may not be conclusive for purposes of permanent impairment. Thus, if a treating physician rates additional body parts the rating may be binding unless the respondents request a Division IME. Garrett v. McNelly Construction, Inc., W. C. No. 4-734-158 (May 17, 2011). In Garrett, the respondents initially denied compensability of the claim and the matter proceeded to hearing. The Administrative Law Judge entered an Order finding that Claimant sustained a compensable injury to his hand and wrist. Claimant obtained medical treatment, and the authorized treating physician provided an impairment rating of 29% whole person, rating numerous body parts in addition to the hand and wrist. The respondents did not request a Division IME, but rather applied for a hearing on the scheduled rating to the hand and wrist, taking the position that the claim was "limited" to the hand and wrist. The Administrative Law Judge's found that the impairment rating was binding because the respondents did not request a Division IME.

The Industrial Claim Appeals Office affirmed the Administrative Law Judge's finding by analyzing the initial order on compensability and determining that there was "nothing in ALJ Walsh's order that 'limits' the claimant's injuries for all future purposes to his hand and wrist." The Industrial Claim Appeals Office found that although the initial compensability determination mentioned that the claimant had injured his hand and wrist, there was nothing in the order that denied an injury to all other body parts. Therefore, the order did not act to preclude a physician from determining that the claimant injured other body parts and from rating those body parts. As such, the respondents' failure to request a Division IME to challenge the impairment rating to the other body parts resulted in the rating being binding.


Court of Appeals Reverses Decision Finding Claimant Waived Right to Division IME
Posted by: Steven Picardi
May 13th, 2011
Topic: Picardi Web Log

In 2009 the Industrial Claim Appeals Office affirmed the Administrative Law Judge's determination that Claimant waived the right to a Division IME by failing to set the Division IME after the selection of a physician. Rodriguez v. Safeway, W.C. No. 4 712 019 (June 3, 2009). Claimant appealed that decision to the Court of Appeals, which issued its decision reversing the Administrative Law Judge's decision and finding that the Division IME process was stayed pending resolution of a dispute over the selection of the Division IME physician. Munoz v. Industrial Claim Appeals Office, ___ P.3d ___ (10CA0592, May 12, 2011).

Munoz requested a Division IME with an "[u]pper extremity orthopedic surgeon." When the IME Panel did not include an orthopedic surgeon specializing in upper extremities, Claimant filed an Application for Hearing endorsing the issue of "[p]ropriety of [the] DIME panel selection and physician specialties, contrary to [c]laimant's DIME rights . . . and true treatment and diagnostic needs." Despite the Application for Hearing, the Division IME selection process proceeded, and a physician was selected by the Division IME Unit. However, Claimant did not set the Division IME, and instead filed a second Application for Hearing seeking penalties against the Division IME Unit "for knowingly proceeding with the selection of an IME [p]hysician in violation of the stay provision" of Department of Labor and Employment Rules ... 11-3(O) and 11-10." The Administrative Law Judge found that found that "[c]laimant did not request a stay of the IME proceedings and did not file a [m]otion to stay the proceedings." The ALJ also found that claimant intentionally failed and refused to participate in the DIME process, and by his conduct, he relinquished his right to and abandoned the DIME. Thus, the ALJ

concluded that "[c]laimant waived his right to a [DIME] by failing to schedule the examination."

Claimant appealed the decision, arguing that the ALJ erroneously concluded that the filing of an Application for Hearing concerning the propriety of the DIME selection process did not automatically stay the DIME proceedings. The Court of Appeals agreed, citing W.C.R.P. 11-3(O), which provides that a pending Division IME shall be held in abeyance when any party "files a motion involving a pending IME proceeding." The Court of Appeals concluded that Claimant's Application for Hearing endorsing the issue of the propriety of the DIME Panel Selection process was the functional equivalent of a motion involving a pending IME proceeding. Therefore, because the Division IME was stayed until the issue was decided by the ALJ at hearing, the ALJ improperly determined that the claimant waived the right to the Division IME.

While this case did overturn the ALJ's determination of waiver, it does not hold that an Administrative Law Judge is precluded from finding a claimant waived the right to a Division IME. The case is limited to its facts - where a claimant files a motion to stay the Division IME proceedings. An Administrative Law Judge still may find a claimant waived the right to a Division IME in cases where the claimant has not taken action on the Division IME request. However, an Administrative Law Judge is not likely to find waiver by the simple filing of a Notice and Proposal to Select an Independent Medical Examiner but not filing an Application for a Division Independent Medical Examination. Rather, a respondent usually will be required to show that it made several attempts to inform the claimant that failure to take action may result in a finding that claimant waived the Division IME process.

Injury While Participating in Voluntary Recreational Activity not Compensable Even if in Travel Status
Posted by: Steven Picardi
May 9th, 2011
Topic: Picardi Web Log

The Court of Appeals recently upheld the decision of Industrial Claim Appeals Office affirming the ALJ's denial of benefits for an employee injured while participating in a voluntary recreational activity while in travel status. McLachlan v. Industrial Claim Appeals Office, 10CA1500 (May 05, 2011)(Not selected for publication). McLachlan was on a business trip in Wyoming (thus in travel status) when he injured his shoulder while participating in an employer-sponsored, recreational street hockey tournament. The Administrative Law Judge denied compensation for the injury, reasoning that claimant's injury arose out of his voluntary participation in the recreational hockey game, which was a personal deviation from claimant's travel status. The Industrial Claim Appeals Office affirmed the Administrative Law Judge's decision.

In his appeal, Claimant relied on the well-established case law recognizing that an employee traveling away from the workplace for an employment purpose is considered to be in "travel status," and thus, continuously within the course and scope of employment except when engaging in a substantial "personal deviation." Claimant argued that his voluntary participation in the hockey tournament did not constitute a substantial, personal deviation removing him from employment status because he did not engage in the tournament "for his own, solely personal reasons." The Court of Appeals, however, found that claimant's argument about the compensability of his injury is foreclosed by sections 8-40-201(8) and 8-40-301(1), which expressly exclude an employee's voluntary participation in a recreational activity from the statutory definitions of "employment" and "employee."

Section 8-40-201(8) specifically excludes from the definition of employment "the employee's participation in a voluntary recreational activity or program, regardless of whether the employer promoted, sponsored, or supported the recreational activity or program." Similarly, section 8-40-301(1) excludes from the definition of "employee" "any person employed by . . . [an] employer, while participating in recreational activity, who at such time is relieved of and is not performing any duties of employment." The Court of Appeals found that the General Assembly's intent in amending the definition of employment expressly to exclude all voluntary, recreational activities was clear and unambiguous. Because the General Assembly made no exceptions to the scope of this exclusion, the courts are precluded from reading an exception into the statute, regardless of whether Claimant was in "travel status."

The decision from the Court of Appeals is significant because it clearly holds that an employee is precluded from workers' compensation benefits while participating in a voluntary recreational activity, even during travel status, without requiring proof that the activity was a substantial personal deviation.

Falsifying Employment Application and Residency Status a Found to be a Volitional Act Sufficient to Terminate Right to Temporary Total Disability Benefits
Posted by: Steven Picardi
April 29th, 2011
Topic: Picardi Web Log

The Industrial Claims Appeals Office upheld the Administrative Law Judge's finding that Claimant was responsible for termination of employment for falsifying his employment application and providing a false permanent resident card and social security card. Oleas v. Elkhorn Construction Co., W. C. No. 4-782-977 (April 12, 2011). In Oleas, the Administrative Law Judge found that because the employment application contained an advisement that any false information or omission might result in discharge if discovered at a later date, the claimant was fully aware of the prerequisites for employment and the consequences of submitting the falsified documents. Therefore, by submitting false documentation, the claimant acted volitionally and was responsible for his termination of employment.

The claimant argued that an exception to the "termination statutes" should be created in situations where the employer was fully aware of the employee's true status but did not discharge him until the employer became liable for a workers' compensation claim. The ICAO determined that it had no authority to carve out such an exception. Though not addressed by ICAO, the "exception" argument in this regard actually is another way of arguing that the employee was not responsible for termination of employment because he had no way of knowing his actions would result in termination since the employer implicitly accepted falsified documents. However, the Administrative Law Judge found that the claimant failed to produce sufficient evidence to prove the employer was aware of claimant's illegal status, so an exception would not have entitled claimant to Temporary Total Disability benefits even if one existed.

The claimant also argued that the employer should be equitably estopped from arguing claimant was responsible for termination of employment because it knew claimant was illegal when it hired him, but did not terminate him until faced with potential liability for a workers' compensation claim. The elements of equitable estoppel are that: (1) the [employer] was aware of the true facts; (2) It was [the employer's] intent that his or her words or conduct be acted upon by the [employee] or that those words or conduct were such that the other party had a right to believe that they were so intended; (3) that the [employee] was ignorant of the true facts; and (4) [the employee] reasonably relied on such words or conduct to his or her detriment. In rejecting the application of the doctrine, the ALJ found that the claimant was "completely aware" of the "true facts" relevant to the claim of estoppel. Thus, the ALJ found that the claimant knew that he was required to be authorized to work and that he was aware that his documents were falsified and that he was not legally authorized to work. The ICAO determined that the employer's initial participation in or knowledge of claimant's act of submitting false documents does not excuse the claimant's participation in a volitional act, and, therefore, upheld the ALJ's rejection of the equitable estoppel claim.

However, it seems as if the ALJ and ICAO both may have misapplied the law as it applies to the facts of the case. The "true facts" relevant to the estoppel issue were not simply whether the claimant acted volitionally in submitting false documentation. Rather, the "true facts" relevant to the estoppel issue were whether the employee knew that the act of submitting false documentation could lead to his termination. Therefore, evidence that the employer knew and accepted false documentation to support employment would be relevant to the estoppel issue.


The Danger of Agreeing to Fund a WCMSA "as approved by CMS"
Posted by: Steven Picardi
April 27, 2011
Topic: Picardi Web Log

Workers' compensation settlements often include funding of a Workers' Compensation Medicare Set-aside Arrangement (WCMSA), usually requires approval by Centers for Medicare & Medicaid Services (CMS). Because CMS can take up to six months to approve a WCMSA, it is common practice to settle the indemnity portion of the workers' compensation claim and then submit a proposed WCMSA to CMS for approval. It is not unusual for the workers' compensation settlement documents to include a provision that the respondent agrees to fund the WCMSA "as approved by CMS."

Language of this type should never be included in a settlement agreement because it leaves the respondent without any recourse if CMS requires a WCMSA far in excess of the amount proposed or expected. It is my standard practice to include the following language in all settlements requiring a WCMSA:

In the event that the Centers for Medicare and Medicaid Services or its Coordinator of Benefits requires a Medicare Set-Aside Account in excess of said amount, Respondent shall have the option of: (1) negotiating with Centers for Medicare and Medicaid Services, without input or consent of Claimant, to obtain approval from Centers for Medicare and Medicaid Services to an amount not below the amounts set forth in ¶ 2.(a) and (b) of this Exhibit A; or (2) rejecting the amount proposed by the Centers for Medicare and Medicaid Services or its Coordinator of Benefits and continuing to pay for reasonable and necessary medical benefits for Claimant's injuries, which are reasonable, necessary and causally related to the injury.

This language creates options for the respondent in the event CMS requires respondent to fund an MSA in excess of an amount considered reasonable by the respondent: either negotiate directly with CMS or leave medical benefits open. While open medical benefits may not be optimal, it often is more desirable than funding a WCMSA for several hundred thousand dollars more than anticipated. The open medical benefits option permits the respondent to review the WCMSA, identify those medical benefits for which Centers for Medicare and Medicaid Services required funding which the respondent believes are unreasonable, and obtain an Order from an Administrative Law Judge that the respondent is not liable for those medical benefits under the workers' compensation claim. Once respondent obtains an Order that it is not liable for the medical benefits in question, it can submit the Order to Centers for Medicare and Medicaid Services and demand that those medical benefits be removed from the WCMSA. These options are foreclosed if the settlement agreement required respondent to fund a WCMSA "as approved by CMS."

In addition, failure to fund the WCMSA "as approved by CMS" potentially may expose a respondent to penalties. In Pankratz v. Hancock Fabrics, the settlement documents included language providing that the respondents would fund a WCMSA "in the amount approved by" CMS. Respondents submitted a proposed WCMSA to CMS in the amount of $28,000. CMS, however, required a WCMSA in the amount of $488,000. The respondents refused to fund the WCMSA in that amount, and set the matter for hearing seeking to set the settlement aside. The claimant endorsed the issue of penalties for failure to comply with the Director's Order approving the settlement agreement. The Administrative Law Judge denied the respondents' request to set aside the settlement agreement. However, the ALJ also denied penalties, based on W.C.R.P. 7-2(A)(1), which provides:

The parties may attach other written agreements to the prescribed [approved settlement] form and may refer to these agreements in Paragraph 9(B) of the settlement agreement. These other written agreements may include a Workers' Compensation Medicare Set-Aside Arrangement (WCMSA), an agreement involving employment, or a waiver of bad faith. These other written agreements attached to a settlement agreement shall not be reviewed and approval of the settlement agreement does not constitute approval of any written agreement attached to the settlement agreement.

The Industrial Claim Appeals Office affirmed the ALJ's denial of penalties because W.C.R.P. 7-2(A)(1) excluded the WCMSA agreement from the Director's review and approval. It reasoned that the claimant may have a cause of action against the respondent for breach of contract to fund the WCMSA pursuant to the terms of the attachment, but such a breach of contract was not a violation of the Director's Order approving the settlement agreement because the Director did not approve the WCMSA. Pankratz v. Hancock Fabrics, W. C. No. 4-653-869 (March 25, 2011).

The reasoning of the Industrial Claim Appeals Office may be flawed. While the Director may not have "approved" the terms of the WCMSA attached as an exhibit to the settlement agreement, the Director did approve the terms of the settlement agreement itself. One of the terms of that settlement agreement required the respondents to fund a WCMSA in an amount "as approved by CMS." Thus, while this case may have dismissed penalties for failure to comply with the Order approving the settlement agreement, future cases may be argued or analyzed differently. Therefore, I strongly encourage respondents to avoid language agreeing to fund a WCMSA "as approved by CMS" and instead reserve the option of negotiating with CMS or keeping medical benefits open in the event negotiation with CMS fails to resolve the disagreement.

Senate Bill 11-199: Procedural Changes to Work Comp Act
Posted by: Steven Picardi
March 18th, 2011
Topic: Picardi Web Log

Senate Bill 11-199 proposes four procedural changes to the Workers' Compensation Act of Colorado. The Bill is the product of an agreement between industry groups from both the claimants' bar and respondents' bar. It is anticipated that the bill will pass and become law.

Section 1 of the bill amends § 8-42-107 (8) by adding a subsection (f), which requires an employer to admit liability for reasonable and necessary medical benefits in claims in which an authorized treating physician recommends medical benefits after maximum medical improvement, if there is no contrary medical opinion in the record.

Section 2 of the bill repeals that part of § 8-43-207(1)(e) which provided that parties represented by counsel could engage in discovery without requesting an Order permitting discovery only if the parties agreed to engage in discovery. Under the amended statute, represented parties will be permitted to engage in discovery regardless of whether one party objects to discovery. An Order from an Administrative Law Judge still will be required where any party to the claim is not represented by counsel.

Section 3 of the bill amends § 8-43-404 by adding a subsection (b), which requires employers or insurers to pay a claimant's "estimated expenses" of attending an Independent Medical Examination requested by the employer or insurer at least three business days in advance of the appointment. The section does not define "estimated expenses" but does state that expenses include "transportation, mileage, food, and hotel costs." Failure to provide payment constitutes grounds for the claimant to refuse to attend the examination. Subsection (b)(II) of the proposed amendment to § 8-43-404 provides that if an employer pays estimated expenses to attend the IME and the claimant does not attend the examination, the employer or insurer may recover the costs paid for the employee's expenses from future indemnity benefits. While it is helpful to permit respondents to recover the costs paid for the employee's expenses from future indemnity payments, I am left wondering why the bill does not permit respondents from recovering the cancellation fees charged by the IME physician.

Section 4 of the bill amends the effective date of section 9 of Senate Bill 10-187, making the provision that payment of lump-sum compensation may not be conditioned on a claimant waiving the right to pursue permanent total disability payments applicable to all requests for lump-sum payments, regardless of the date of a claimant's injury.

OAC Adopts New General Guideline Regarding Extensions of Time to File Appeal Briefs
Posted by: Steven Picardi
March 18th, 2011
Topic: Picardi Web Log

Director and Chief Judge Azer has issued a new "general guideline" regarding extensions of time in excess of ten (10) days to file Workers' Compensation briefs in support of or in opposition of a Petition to Review:

An ALJ should not grant an extension of time exceeding 10 business days for any opening or opposing brief on a Petition to Review, unless there is a showing of good cause and extenuating circumstances by the party requesting the extension. The order granting the extension of time may have an added provision that no additional extensions of time will be granted.

This policy still allows OAC designee clerks to grant unopposed motions for extensions of time to file opening or opposing briefs. Any requests in excess of 10 business days or any multiple requests for extensions by the same party will be presented to the merits ALJ for determination of good cause and extenuating circumstances.

The general guideline clearly is designed to prevent counsel from requesting lengthy or multiple extensions of time to file a brief, in an effort to speed the resolution of pending Petitions to Review.

ALJ Has Authority to Grant Only One Day Penalty for Failure to Submit Request for Prior Authorization for Review by Physician
Posted by: Steven Picardi
March 8th, 2011
Topic: Picardi Web Log

If respondents seek to deny prior authorization based on medical reasons, Workers' Compensation Rule of Procedure 16-10(B) requires respondents to submit the request for prior authorization of medical treatment to a medical professional. Section 8-43-304(1) provides for a penalty of up to $1,000 for failure to comply with the statutes and rules of procedure. Section 8-43-305 provides that "Every day during which ... insurer ... fails to perform any duty imposed by articles 40 to 47 of this title shall constitute a separate and distinct violation thereof. In any action brought to enforce the same or to enforce any penalty provided for in said articles, such violation shall be considered cumulative and may be joined in such action."

In Crowell v. Denver West Marriott, W.C. No. 4-777-591 (February 25, 2011), the Administrative Law Judge found that Respondents denied prior authorization without submitting the request to a medical professional. Claimant sought penalties for each day Respondents denied the surgery through the date of the hearing. The Administrative Law Judge, however, concluded that the insurer's failure to submit the documentation to a physician was a one-time failure to act and the provision that each day is a separate and distinct violation did not apply. Therefore, the Administrative Law Judge imposed a penalty of $500.

Claimant appealed to Industrial Claim Appeals Office, arguing that the Administrative Law Judge improperly denied penalties for each day Respondents did not authorize the surgery. ICAO affirmed the ALJ's denial of penalties beyond one day, noting that § 8-43-304(1) affords the ALJ wide discretion to impose a penalty up to $500 for each offense, and holding that the issue of whether to penalize a violation of the Act or a regulation as a continuing violation or as a single violation comes within the discretion afforded the ALJ in the application of § 8-43-305. Although § 8-43-305 provides that each day a person violates a provision of the Act or the rules is a separate and distinct violation, the ALJ may exercise his discretion in determining whether the respondents "fail[ed] to comply" with the regulation on the single day on which it failed to have the request for pre-authorization reviewed or during each successive day when it failed to have a medical review. Because there was substantial evidence to support the ALJ's exercise of discretion, the Industrial Claim Appeals Office affirmed the Administrative Law Judge's penalty for only one day.


Allergic Reaction to Smoking Cessation Drug Not Compensable
Posted by: Steven Picardi
February 25th, 2011
Topic: Picardi Web Log

Claimant's employer offered and incentive to employees to contain the cost of the health insurance plan it provided to employees. Therefore, Claimant's doctor prescribed the drug Chantix to help Claimant quit smoking cigarettes. Claimant had an adverse reaction to the drug and sought workers' compensation benefits, relying on the "dual purpose doctrine," which holds that an injury suffered by an employee while performing acts for the mutual benefit of the employer and employee is usually compensable.

The Claimant argued that the undisputed evidence established that both he and employer stood to benefit if he stopped smoking; he would realize an improvement in his general health and a monetary savings and employer would gain a direct economic benefit in the form of consistent or lower health insurance costs. However, the Court of Appeals held that Claimant was not engaged in an activity that had been approved by the employer or that was directly related to an immediate and specific employment task. Rather, Claimant was engaged in an activity with regard to which employer had no control and which, much like sleeping and eating, was not directly related to an immediate and specific employment task. Therefore, the Court of Appeals held that the Administrative Law Judge properly relied upon the factors set forth in Price v. Industrial Claim Appeals Office, 919 P.2d 207, 210-11 (Colo. 1996), to determine whether exercise programs are compensable: (1) whether the injury occurred during work hours; (2) whether the injury occurred on the employer's premises; (3) whether the employer initiated the employee's exercise program; (4) whether the employer exerted any control or direction over the employee's exercise program; and (5) whether the employer stood to benefit from the employee's exercise program. The Administrative Law Judge, analyzing those factors and placing the most weight on the first time factors, determined that Claimant's injury was not compensable. Therefore, the Court of Appeals affirmed the denial of the claim. Buckley v. Industrial Claim Appeals Office, 10CA1606 (February 17, 2011).


ALJ Has Authority to Order Reimbursement to Insurer for Fraud by Employer
Posted by: Steven Picardi
February 3rd, 2011
Topic: Picardi Web Log

In a case of first impression, the Industrial Claim Appeals Office recently held that the Workers' Compensation Act of Colorado grants an Administrative Law Judge jurisdiction to Order an employer to repay an insurer for benefits paid to a claimant based on a fraudulently reported claim by the employer. Fuentes v. Rivera Construction, W. C. No. 4-810-095 (January 18, 2011). In Fuentes, the employer's work comp policy was cancelled for non-payment of premiums. During the period of cancellation, Claimant sustained an injury. Employer then paid the premiums in arrears and completed a Statement of No Loss certifying that the employer was not aware of any accidents that may give rise to a claim during the period the policy was cancelled. The insurer reinstated the policy, and employer reported the injury, fraudulently claiming that the injury occurred after the policy was reinstated. Based on the fraudulent report by the employer, the insurer admitted liability and paid claimant benefits.

After discovering the fraud, insurer set the matter for hearing requesting a retroactive withdrawal of its admission of liability and an Order requiring repayment of the benefits made by the insurer based on the fraud of the employer. The Administrative Law Judge granted the retroactive withdrawal of the admission. However, the ALJ denied insurer's request for an Order requiring the employer repay the insurer, concluding that the Act did not grant jurisdiction to order repayment by the employer to the insurer. The Industrial Claim Appeals Office reversed the ALJ's denial of repayment, holding that the reimbursement sought by the insurer was sufficiently related to the relief ordered by the ALJ - the retroactive withdrawal of its admission of liability based on the employer's fraudulent acts - to come within the purview of the Act. Therefore, the Industrial Claim Appeals Office remanded the matter back to the Administrative Law Judge to consider ordering reimbursement by the employer to the insurer, subject to any available defenses raised by the employer.

Death Benefits Received for Death of Spouse Before Injury Offset Against PTD Benefits
Posted by: Steven Picardi
January 24th, 2011
Topic: Picardi Web Log

It is settled law that a respondent is entitled to offset a dependent's workers' compensation death benefits by one-half of the dependent's receipt of Social Security death benefits. Until recently, the courts had not addressed whether a respondent may reduce an injured claimant's Permanent Total Disability benefits when that injured claimant was receiving widow's or survivor's benefits from the Social Security Administration as a result of the death of the injured claimant's spouse. The Industrial Claim Appeals Office recently held that a respondent does have a right to the offset. Hillery v. Three Aces, LLC, W. C. No. 4-755-808 (January 14, 2011).

In Hillery, the Administrative Law Judge analyzed the purposes of survivor's benefits and determined that the survivor's benefits (which were being received by the claimant as a result of the death of her husband before her industrial injury) (1) did not share a wage loss purpose similar to social security disability or retirement benefits or unemployment benefits; (2) were unrelated to the claimant's work-related fatality; and (3) are not part of a wage loss protection program; and (4) are not encompassed in the offset provisions of the Worker's Compensation Act of Colorado. Therefore, the ALJ determined that periodic widow's benefits genuinely cannot be considered to be a "common pool of benefits" due to the distinction in the purpose of the benefit, which is to provide for a widow as a result of the non-work related death of her husband.

The Industrial Claim Appeals Office, analyzing prior case law regarding offsets for Social Security retirement benefits and the statutes creating the right to offsets (which is too voluminous to recite here), determined that there was no basis to treat widow's benefits differently than retirement benefits under the Act. Therefore, ICAO set aside the ALJ's Order and remanded the matter to the Administrative Law Judge for entry of a new Order permitting respondent to take the offset.

While this case likely will be appealed to the Court of Appeals, for now the case provides a basis to offset a claimant's receipt of social security widow's benefits against Permanent Total Disability benefits. As a result, adjusters and attorneys should be sure to inquire whether a claimant is receiving any benefits from any source, so that respondents may discovery whether it may offset survivor's benefits.
 

Average Weekly Wage May be Based on Estimated Future Potential Earnings
Posted by: Steven Picardi
January 11th, 2011
Topic: Picardi Web Log

In a potentially far-reaching case, the Industrial Claim Appeals Office recently upheld an Order of Administrative Law Judge Harr increasing a claimant's Average Weekly Wage based on the estimated future potential earnings of an injured worker had the worker secured employment in a separate field after the industrial injury. Wheeler v. Archdiocese of Denver Management Corp., W. C. No. 4-669-708 (December 21, 2010).

Wheeler sustained an industrial injury in 2005 while working part-time earning $74.40 per week. Upon reaching Maximum Medical Improvement, the claimant sought Permanent Total Disability benefits and an increase in her Average Weekly Wage to the maximum in effect at the time of Maximum Medical Improvement. Wheeler's vocational expert testified that it was vocationally probable that the claimant would eventually secure employment within the arts professional career cluster where she could expect to earn an average mean wage of $986.30 per week. The Administrative Law Judge concluded that the maximum Average Weekly Wage in effect on the date of Maximum Medical Improvement in 2009 reasonably and more fairly approximated the claimant's wage loss due to her injury rather than the claimant's actual earnings at the time of the accident. Therefore, he increased the Average Weekly Wage to the maximum in effect at the time of Maximum Medical Improvement.

The Respondents first argued that § 8-42-102(2)(d) requires the Administrative Law Judge to calculate the Average Weekly Wage on the income the injured worker was receiving "at the time of the injury." The Industrial Claim Appeals Office, citing Avalanche Industries, Inc. v. Clark 198 P.3d 589 (Colo. 2008), concluded that although the default provision to determine Average Weekly Wage found in § 8-42-102(2) is tied to the injured worker's Average Weekly Wage at the time of the injury, the statute also contains a "discretionary exception" found in § 8-42-102(3) which provides that "Where the foregoing methods [set forth in subsection (2) ] of computing the average weekly wage of the employee ... will not fairly compute the average weekly wage, the division ... each particular case, may compute the average weekly wage in such other manner and by such method as will, in the opinion of the director based on the facts presented, fairly determine such employee's average weekly wage." The Industrial Claim Appeals Office further concluded that there was nothing in Avalanche Industries decision which restricted the Administrative Law Judge's discretion to "actual earnings" made by the claimant after the date of the injury, as opposed to estimated future earnings that the injured worker probably would have earned but for the injury. Therefore, the Industrial Claim Appeals Office upheld the Administrative Law Judge's award increasing the Average Weekly Wage based on the claimant's estimated future potential earnings.

However, the Industrial Claim Appeals Office reversed that part of the Administrative Law Judge's order which increased the Average Weekly Wage based on the maximum rate in effect on the date of Maximum Medical Improvement, holding that the claimant was limited to the maximum rate in effect at the date of injury. The Industrial Claim Appeals Office cited Benchmark/Elite, Inc. v. Simpson, 232 P.3d 777 (Colo. 2010) in support of its holding, which noted that the director of the Division of Workers' Compensation determined the state Average Weekly Wage on a yearly basis using the most recent figures about statewide average weekly earnings under § 8-47-106 and assumed, without deciding, that the Administrative Law Judge uses the state Average Weekly Wage in effect at the claimant's "time of injury."

The decision may seriously affect the future Permanent Total Disability benefits awards. Previous cases had acknowledged an Administrative Law Judge's discretion to increase an Average Weekly Wage based on actual earnings after an industrial injury. This is the first published case which permits an Administrative Law Judge to increase an injured worker's Average Weekly Wage based on estimated future potential earnings, rather than requiring evidence of actual earnings after an injury. It is not unlikely that we will see many injured workers returning to school while on Temporary Total Disability benefits in an effort to prepare a case for an increase in Average Weekly Wage based on estimated future potential earnings that would have been earned but for the injury.

Penalties for Failure to File a Notice of Contest or Admission of Liability
Posted by: Steven Picardi
January 4th, 2011
Topic: Picardi Web Log

Section 8-43-203 and W.C.R.P. 5-2(D) require respondents to either admit or deny liability for a claimed injury within twenty days of receipt of a claim for compensation. In Romero v. Paul Clark Masonry, Inc., W. C. No. 4-824-897 (December 14, 2010), the Industrial Claim Appeals Office upheld an order of the Director awarding penalties against respondents for failure to comply with the Act and the Rules of Procedure.

In Romero, the claimant filed a Workers' Claim for Compensation on May 18, 2010. The Division sent the claim to the insurer the following day and requested a position statement. On June 8, 2010, the Division notified the claimant, with a copy to the insurer, that the Division had not received a position statement on the claim. On July 21, 2010, the Director entered an Order finding that a position statement had not been received, informing the insurer that it appeared it had failed to meet the applicable requirements of the Act and rules, and ordering the insurer to file a position statement by August 6, 2010. The respondents failed to file a position statement as ordered by the Director. Therefore, on August 13, 2010, the Director awarded penalties to claimant of $40 per day for each day after August 6, 2010, for which respondents were in violation of the Act and rules.

The respondents filed a Petition to Review which essentially explained its reasons for not filing the position statement timely. However, because the issue of failure to obey a lawful order is factual in nature, the ICAO must uphold the Director's determination if supported by substantial evidence in the record. Since there was substantial evidence in the record to support the factual finding of a violation of the Act, ICAO was bound by the finding. The only other issue for consideration was the reasonableness of the amount of the penalty. Because the Director's authority is discretionary, ICAO may not disturb the Director's determination of the amount of the penalty to be imposed in the absence of fraud or an abuse of discretion. See Associated Business Products v. Industrial Claim Appeals Office, 126 P.3d 323 (Colo. App. 2005); Hall v. Home Furniture Co., 724 P.2d 94 (Colo. App. 1986); Brunetti v. Industrial Commission, 670 P.2d 1246 (Colo. App. 1983). There was no allegation of fraud, and the legal standard for review of an alleged abuse of discretion is whether, under the totality of the factual circumstances at the time of the Director's determination, the Director's order "exceeds the bounds of reason." Rosenberg v. Board of Education of School District # 1, 710 P.2d 1095 (Colo. 1985). Thus, ICAO upheld the penalty award.

This case is significant because it highlights the fact that the Director has jurisdiction to award a penalty without setting a hearing on the issue to permit respondents to explain the reason for failing to comply with the Act or rules of procedure.

Final Admission of Liability Based on Abandonment of Claim
Posted by: Steven Picardi
January 4th, 2011
Topic: Picardi Web Log

Workers' Compensation Rule of Procedure 7-1 provides that a respondent may file a Final Admission of Liability based on abandonment of the claim when a claimant (1) is not receiving temporary disability benefits; (2) has not attended two or more consecutive scheduled medical appointments; and (3) has failed to respond within 30 days to a letter from the insurer or the insured asking if the claimant requires additional medical treatment or is claiming permanent impairment. The rule indicates that "the letter shall be sent to the claimant and the claimant's attorney if the claimant is represented." Usually, it is sufficient to send the letter to the claimant's address on file with the Division of Workers' Compensation. However, the Industrial Claim Appeals Office recently held that when an employer has notice or knowledge that the employee is not residing at the last known address, substantial compliance with W.C.R.P. 7-1 requires the employer mail the notice to place where the employer knows the employee to be residing. Bookout v. Safeway, Inc., W. C. No. 4-798-629 (December 15, 2010).

In Bookout, the claimant was arrested for domestic assault. Because his arrest violated his parole on a previous conviction, claimant was denied release on bond and incarcerated. Therefore, claimant could not attend work or medical appointments. Despite the fact that the employer knew claimant was incarcerated, the employer sent the letter required by W.C.R.P. 7-1 and the Final Admission of Liability to claimant's residence, not the jail. Claimant was released from jail with ten days remaining to object to the Final Admission of Liability, but since claimant had not received the Final Admission of Liability he did not object to it within thirty days. Claimant sought TTD benefits for the time he was incarcerated and continuing. Respondent denied compensation based on its position that failure to object to the Final Admission of Liability closed the case. The Industrial Claim Appeals Office determined that substantial compliance with W.C.R.P. 7-1 required the respondent to send the letter and the Final Admission of Liability to the jail where claimant was incarcerated, because respondent knew that claimant would not receive the letter at his home. Because Respondent did not substantially comply with the notice requirements of W.C.R.P. 7-1, Industrial Claim Appeals Office affirmed the Administrative Law Judge's order finding that the Final Admission of Liability did not provide notice to the claimant that his claim would be closed.

The Administrative Law Judge then determined that because the charges against claimant were dropped, and that claimant attempted to notify the employer of his incarceration, claimant was not responsible for termination of employment and awarded Temporary Total Disability benefits from the time of his incarceration. Respondent appealed, arguing that claimant was responsible for termination of employment, and that, even if not, claimant would not be entitled to Temporary Total Disability benefits for the period of time he was incarcerated. The Industrial Claim Appeals Office affirmed that part of the Administrative Law Judge's Order finding claimant was not responsible for termination because there was substantial evidence to support that claimant's termination was not the result of a volitional act on his part. However, the Industrial Claim Appeals Office reversed that part of the Administrative Law Judge's Order which awarded Temporary Total Disability benefits while claimant was incarcerated. Pursuant to §§ 8-42-103 and 8-42-105, C.R.S., a claimant is entitled to an award of TTD benefits if: (1) the injury or occupational disease causes disability; (2) the injured employee leaves work as a result of the injury; and (3) the temporary disability is total and lasts more than three regular working days. Lymburn v. Symbios Logic 952 P.2d 831 (Colo. App. 1997). The statute expressly contemplates proof the injured worker left work or lost employment as a result of the industrial injury in order to establish entitlement to temporary disability benefits. Randall v. The Anschutz Mining Corporation, W. C. No. 4-433-235 (September 14, 2000). See also City of Colorado Springs v. Industrial Claim Appeals Office, 954 P.2d 637 (Colo. App. 1997). Here, claimant left work not because of the injury, but because of his incarceration. Therefore, the Industrial Claim Appeals Office reversed that part of the award of Temporary Total Disability benefits for the period when claimant was incarcerated.

This case highlights the need to ensure that the respondent makes every attempt to serve notice on an injured worker when attempting to file a Final Admission of Liability based on abandonment. The case is helpful in that it does not require "actual notice" be served on claimant. Rather, "substantial compliance" with the notice requirements is sufficient.

Voluntarily Separated Spouse Not Presumed Wholly Dependent
Posted by: Steven Picardi
December 22nd, 2010
Topic: Picardi Web Log

The Court of Appeals recently affirmed the Administrative Law Judge's determination that the deceased injured worker's wife was not wholly dependent where she voluntarily separated from the decedent after the injury because he became "very difficult to live with" even though the couple had "no intent to divorce." Teter v. Industrial Claim Appeals Office, Court of Appeals No. 09CA1432 (December 16, 2010)(not selected for publication).

Dependency status is fixed as of the date of death, not the date of injury. Ward v. Ward, 928 P.2d 739, 741 (Colo. App. 1996) (recognizing harmonization in context of attempt to reopen death benefits); Richards v. Richards & Richards, 664 P.2d 254, 256 (Colo. App. 1983). A surviving spouse is presumed to be wholly dependent on the deceased unless the surviving spouse "was voluntarily separated and living apart from the spouse at the time of the injury or death or was not dependent in whole or in part on the deceased for support." § 8-41-501(1)(a), C.R.S. 2010. Therefore, the Court of Appeals concluded that the Administrative Law Judge's factual finding of voluntary separation, without more, was sufficient to overcome the presumption of dependency under the statute.

Claimant's testimony that the couple had no intent to divorce was relevant to the question of whether the separation was voluntary. However, because there was substantial evidence to support the Administrative Law Judge's factual finding that she moved out because decedent became "very difficult to live with" the Court of Appeals was bound by the Administrative Law Judge factual finding. Therefore, the Court of Appeals upheld the Administrative Law Judge's finding that respondents had overcome the presumption that the spouse was wholly dependent based on the voluntary separation at the time of death.

Picardi Obtains Defense Order Denying Causation
Posted by: Steven Picardi
December 13th, 2010
Topic: Picardi Web Log

I recently obtained an Order from Administrative Law Judge Mottram determining that Claimant's cervical condition was unrelated to her shoulder injury, despite the fact that Claimant's surgeon and her authorized treating physician both testified that the cervical spine condition was aggravated by her shoulder injury. Claimant sustained an admitted injury to her left shoulder on June 1, 2008. On October 21, 2008, the authorized treating physician's medical record indicated an "obvious shift" in her complaints, diagnosing a cervical strain and eventually referring the claimant to a surgeon for a cervical fusion. My client authorized treatment for the cervical spine, but denied authorization for the cervical fusion and sent the case to me to litigate the issue of whether the cervical spine condition was caused or aggravated by the shoulder injury.

Both the surgeon and the authorized treating physician had opined that the shoulder injury aggravated her pre-existing cervical degenerative disc disease. However, I introduced medical records from five different health care providers indicating that Claimant did not complain of neck pain from the date of injury on June 1 until October 21, almost five months after the injury. Claimant testified that she told all of her medical providers that she had neck pain on each visit and that the medical providers did not document the true extent of her complaints, and introduced a hospital billing form documenting that Claimant complained of "left shoulder/neck strain" on her first appointment. The Administrative Law Judge found it highly unlikely that the medical records from five different providers (including the medical records from an unrelated Emergency Department visit where Claimant listed all of her medical conditions without mentioning neck pain) would fail to include a reference to neck pain. Therefore, Administrative Law Judge Mottram denied Claimant's request for treatment to her cervical spine, saving the client at least $100,000 (the cost of the cervical fusion, Temporary Total Disability benefits and at least a 9% whole person impairment rating for specific disorder of the cervical spine).

Statutory Cap on Benefits - Credit for PPD Paid Against TTD Currently Due
Posted by: Steven Picardi
November 30th, 2010
Topic: Picardi Web Log

The Industrial Claim Appeals Office recently overturned an Administrative Law Judge's denial of a respondent's request to terminate TTD benefits upon reaching the $75,000 cap on benefits. Addington v. United Airlines, W. C. No. 4-732-201 (November 9, 2010). In Addington, claimant received Temporary Total Disability prior to Maximum Medical Improvement. The parties stipulated to an award of $30,000 in Permanent Partial Disability benefits when Claimant reaching Maximum Medical Improvement.

Several months later the respondent voluntarily reopened the case for a worsening of condition and began paying Temporary Total Disability benefits again. When the claimant's combined Temporary Total Disability benefits and Permanent Partial Disability benefits reached $75,000, respondent petitioned to terminate ongoing TTD benefits, arguing that it should receive a credit for the $30,000 in PPD against continuing TTD benefits pursuant to Donald B. Murphy Contractors, Inc., Industrial Claim Appeals Office, 916 P.2d 611 (Colo. App. 1995). The Administrative Law Judge denied the petition to terminate, finding that Murphy was distinguishable on several grounds. Therefore, the Administrative Law Judge held that respondent was required to continue paying Temporary Total Disability benefits beyond the $75,000 cap and could take a credit for PPD benefits only when Claimant reaches Maximum Medical Improvement.

The Industrial Claim Appeals Office set aside the Administrative Law Judge's denial of the petition to terminate and granted the respondent a credit for the $30,000 in Permanent Partial Disability benefits already paid against ongoing TTD benefits. The ICAO adopted the reasoning in Murphy, which held that when further benefits were sought after reaching the $75,000 cap on benefits found in §8-42-107.5 (for impairment ratings of 255 or less), the respondents were entitled to offset any PPD benefits previously paid against TTD benefits currently due. The Court of Appeals in Murhy noted that allowing the offset required the claimant to allocate the PPD benefits already paid toward his current inability to earn wages (entitlement to TTD benefits) until such time as permanent medical impairment could be calculated at the time of Maximum Medical Improvement.

This case affirms a respondent's right to petition to terminate ongoing TTD benefits when a claimant reaches the statutory cap of $75,000 when PPD benefits previously have been paid. A respondent still is prohibited from terminating TTD benefits upon reaching $75,000 if no PPD benefits have been paid previously.

Ex-Parte Communication with Providers - Topic Revisit
Posted by: Steven Picardi
November 12th, 2010
Topic: Picardi Web Log

Today I was a participant on a five-member panel speaking at the Professionals in Workers' Compensation Education Day addressing the topic of "Legalities and Ethics Involved in Discussing an Injured Worker's Care with an Authorized Treating Physician." The discussion centered on the impact of the recent enactment of § 8-43-404(5)(a), which prohibits a treating physician from communicating with the employer or insurer unless (1) the injured worker is present for the communication; or (2) "the treating physician makes an accurate written record of the communication, containing all relevant and material information that was communicated, and provides the injured worker access to the writing in the same manner as medical records disclosures as required by director rules."

The statute clearly permits a respondent to speak with a treating physician without the claimant being present so long as the treating physician makes an accurate written record of the communication afterwards (and provides the injured worker access to the writing). The effect of the statute is to make an initially permissible communication impermissible if the physician fails to make an "accurate written record" of the communication afterwards. This creates a very unusual situation where a respondent arguably may become liable for penalties for another person's failure to act, because Section 8-43-304(1) provides that any person who violates any provision of the Act, or does any act prohibited thereby, or fails or refuses to perform any duty required by the Act or rules of procedure may be liable for a penalty of up to $1,000 per day.

Because an ex-parte communication with a physician is permissible at the time of the communication, and becomes impermissible only if the treating physician does not make an accurate written record after the communication, the respondent has a very strong argument that respondent did not violate the Act at the time of the communication, and that, therefore, penalties should not be awarded against the employer or insurer. However, the statute still creates a potential for penalties based on the treating physician's failure to make the accurate written record. Respondents must realize that many physicians (particularly any physician in any specialty other than occupational or physical medicine) still are unaware of this statute. Therefore, to minimize the potential exposure for penalties in the event of a physician's failure to make an accurate written record, the adjuster always should remind the physician of the obligation to make the written record. As a further protection, it may be necessary to paste your notes from the conversation into a letter asking the physician to confirm the accuracy of written notes of the conversation by signing and returning the letter. This substantially increases the likelihood that the physician will comply with the requirements of the statute, and also mitigates the potential for penalties against the respondent by showing that respondent informed the physician of the duty to make an accurate record.

If you would like to discuss this topic further, please feel free to contact me.

Claimant May Waive the Right to be Served with Offer of Modified Work
Posted by: Steven Picardi
November 9th, 2010
Topic: Picardi Web Log

Workers' Compensation Rule of Procedure 6-1(A) permits respondents to terminate Temporary Total Disability benefits without a hearing by filing an Admission of Liability under certain circumstances, including an offer of modified employment delivered to the claimant. W.C.R.P. 6-1(A)(4). Since the rule requires the offer be "delivered" to the claimant, courts have interpreted W.C.R.P. 6-1(A)(4) as requiring actual receipt of the offer of modified employment. Therefore, claimant's often deny receipt of the offer of employment for various reasons.

In Barnett v. Wal-mart Stores, W. C. No. 4-769-486 (October 27, 2010), the Industrial Claim Appeals Office affirmed an Administrative Law Judge's determination that the claimant waived delivery of the offer of modified employment under the circumstances of that case. In Barnett, the employer attempted to hand-deliver the offer of modified employment during a meeting. The claimant "refused to accept the written offer, requesting that it be sent to him by certified mail." The post office then delivered three notifications that the letter was being held for claimant, but claimant failed to retrieve the letter. The employer then contacted the claimant, who agreed to appear at the employer's place of business to sign the offer of modified work, but failed to show at the employer's place of business. The Administrative Law Judge found that the claimant waived actual notice of the offer of modified work and terminated Temporary Total Disability benefits. The Industrial Claim Appeals Office affirmed the decision, finding substantial evidence to support the finding of waiver.

While this decision is based on the facts of the particular case, it provides guidance as to the steps which should be taken when a claimant refuses or fails to sign for a certified letter offering employment. If the employer and/or adjuster makes multiple attempts to explain the offer of modified duty and claimant continues to refuse to accept service of the letter or refuses to appear at the employer's place of business to accept the modified duty, the employer should be able to convince an Administrative Law Judge that Temporary Total Disability benefits should be terminated pursuant to the offer of modified employment because the claimant waived notice of the offer of modified employment.

Authorized Treating Physician Issues When a Claim is Denied
Posted by: Steven Picardi
October 19th, 2010
Topic: Picardi Web Log

The employer has the right to select the authorized treating physician at the time of the injury, by providing the injured employee a Designated Provider List at the time of injury and/or within seven days of the injury. See, W.C.R.P. 8. It is very common for the employer to provide the Designated Provider List to the employee at the time of the injury, and to later deny liability for the claimed injury. This denial of liability does not give the employee the automatic right to select a new authorized treating physician. Even if the respondent denies liability, the respondent retains the right to select a treating physician; the right of first selection does not pass to the claimant unless the employer or insurer fails to provide a physician willing to treat the injury. Yeck v. ICAO, 996 P.2d 228, 229 (Colo. App. 1999). In order to establish the right to select claimant's own authorized treating, the burden is on the claimant to prove: (1) the originally selected physician refused to treat for non-medical reasons; (2) the employer/insurer was provided notice of the refusal to treat; and (3) the employer did not designate a new physician willing to treat "forthwith" upon receiving notice. Haverty v. Sam's Wholesale Club, W.C. No. 4-634-648 (Dec. 19, 2005).

Generally, upon receipt of the Notice of Contest or other information from the adjuster, the physician will refuse to schedule a new appointment or the claimant simply will stop going to that physician and choose their own physician (oftentimes one covered by their health insurer or one with whom that individual has received prior treatment). In either case, it is very common that neither the physician nor the claimant will provide notice of the refusal to treat. Without notice to the adjuster or employer that the physician has refused to treat, the right of selection does not pass to the employee. Therefore, in any case where respondent has denied liability for an injury, it is important to document any communication with the designated provider after the Notice of Contest, as that documentation may prevent liability for subsequent care from non-authorized providers. In addition, it is important to communicate with the employer to determine whether the employer was given notice of refusal to treat, because employers will not think to notify the adjuster of this fact unless they are told. Furthermore, in the event of a conflict between the employer and employee (employee stating the employer was notified of a refusal to treat and the employer denying that fact), an Administrative Law Judge is much more likely to find the employer's testimony more credible if the employer has been informed of the need to communicate any such notice to the adjuster.

Six Months of Pain for a Specific Disorder Rating not Required to be Prior to MMI
Posted by: Steven Picardi
October 11th, 2010
Topic: Picardi Web Log

A recent Industrial Claim Appeals Office case reversed Administrative Law Judge Harr's determination that Respondent had overcome the Division IME physician's cervical spine specific disorder impairment rating by clear and convincing evidence. Lopez v. Cargill Meat Solutions, W.C. Nos. 4-757-408 & No. 4-758-952 (September 9, 2010). In Cargill, the Division IME physician assigned a 17% whole person rating for specific disorder and loss of range of motion of the cervical spine pursuant to Table 53 of the American Medical Association's Guides to the Evaluation of Permanent Impairment, (3rd Ed., Revised) (providing for a specific disorder impairment rating for cervical, thoracic or lumbar injuries causing "a minimum of six months of medically documented pain and rigidity"). Respondent challenged that rating and offered the testimony of Henry Roth, M.D., who testified that the Division IME physician's impairment rating was erroneous because the Claimant reached MMI within four months of the of injury, and, therefore, did not qualify for an impairment rating under Table 53. ALJ Harr agreed and found that Respondent had overcome the impairment rating by clear and convincing evidence.

However, for purposes of Table 53II,"the AMA Guides do not require that the documented pain occur prior to MMI." McLane Western Inc. Industrial Claim Appeals Office, 996 P.2d 263, (Colo. App. 1999). Because ALJ Harr determined that the Division IME physician erred in finding impairment because the claimant had reached MMI prior to the passage of the six month "threshold" contained in Table 53 II.B, the Industrial Claim Appeals Office found that the ALJ erred as a matter of law. Furthermore, because the ALJ's decision reflected no other basis for determining that the DIME physician's opinion on cervical impairment was overcome by the required enhanced burden of proof, the ICAO determined that the DIME physician's opinion must be given presumptive effect. Therefore, the ICAO reversed the ALJ's decision and modified the Order to reflect that the employer shall pay the claimant permanent partial disability benefits based upon DIME physician's rating of 17 percent of the whole person.

This decision underscores the ease in which an injured worker may obtain an impairment rating in Colorado for even the most minor back and neck injuries. Because of the time requirements of the rules of procedure, it is almost impossible to complete a Division IME within six months of the injured worker's date of injury. Therefore, the claimant need do nothing more than complain of pain in order to obtain a specific disorder impairment rating (and then also obtain a rating for "loss" of range of motion).

The Court of Appeals recently affirmed an ALJ's dismissal of a claim by a purported employee injured during a pre-employment physical, re-affirming the previous decisions denying compensation during a pre-employment physical unless "a mutual agreement existed between the parties that created a mutual obligation." Lopez v. Industrial Claim Appeals Office, ___ P3d ___, 09CA2246 (September 16, 2010), citing Younger v. City & County of Denver, 810 P.2d 647, 653 (Colo. 1991).

In Lopez, the claimant was injured during a pre-employment physical. However, two employees testified that even if the claimant had successfully completed the pre-employment physical, he still would have had to undergo several mandatory administrative procedures, including (a) discuss wages with the supervisor; (b) deliver a CSU "green card" signed by the supervisor to CSU's personnel department, setting forth the applicant's start date, wages, and work schedule; and (c) complete the mandatory Homeland Security check by presenting a valid photo ID and social security card. The employees testified that because claimant did not perform the additional mandatory steps to finalize employment, he was not an employee. Because the ALJ found that claimant failed to meet his burden of proving a "mutual agreement" for employment, the Court of Appeals affirmed the denial of the claim. The decision does not address whether the claimant presented any evidence of other employees beginning employment before completion of the "mandatory" administrative steps (which is very common).

The decision is worth noting because it appears that the interview process had been completed and claimant would have been offered employment but for completion of the "mandatory" administrative procedures. The Court of Appeals found that the claimant was "simply an applicant" until he completed those procedures. This decision provides guidance for those employers requiring pre-employment physicals; a clear statement in the Policies and Procedures Manual or other document that employment does not begin until all administrative steps have been completed can assist greatly in defeating a claim for compensation.

Practice Pointer on IME Reports and Audio Recordings
Posted by: Steven Picardi
September 20, 2010
Topic: Picardi Web Log

It is important to remember that procedure for Independent Medical Examinations has changed significantly over the past two years. WCRP 8 creates very specific requirements for conducting Independent Medical Examinations, and there are many areas where mistakes may occur in the process: the IME physician may conduct the examination without obtaining the injured worker's signature on the form or may neglect to verbally inform the injured worker that the examination will be recorded; the physician may neglect to record the examination, or may send an audio recording to the respondent rather than the injured worker. Importantly, WCRP 8-8 provides that prior to every IME (except Division IMEs) the respondent "shall ensure that the examining physician is provided written notice that describes the requirements relating to recording the examination as set out in statute and these rules." Thus, failure of the physician to comply with the rules may be held against the respondent, especially if the respondent did not provide written notice describing the requirements of the Rule. I am starting to see motions to strike Independent Medical Examination reports filed by claimants' attorneys for alleged failures to comply with the requirements of Workers' Compensation Rule of Procedure 8 (implementing the statutory requirement to audio record Independent Medical Examinations). It is important to remember that the requirement for the physician to make an audio recording applies to all Independent Medical Examinations regardless of date of injury, and that failure to comply with all requirements of the Rule may result in the report being stricken.

Prior to commencing the examination the injured worker must review and sign a form issued by the Division that contains information regarding the independent medical examination process, and the IME "shall not take place unless the injured worker has signed the form." WCRP 8-9(A). In addition, immediately prior to the examination, the examining physician shall verbally notify the injured worker that the examination will be audio recorded. WCRP 8-9(B).

The IME physician shall provide to both parties a written medical report prepared as a result of the independent medical examination. WCRP 8-11(B). Any party may request a copy of the audio recording of the examination within twenty (20) days of the date the written medical report was issued. WCRP 8-11(C). Regardless of the party making the request for a copy of the audio recording, the physician must mail a copy of the audio recording to the injured work only. In addition, if the respondent makes the request for audio recording, the respondent's written request for a copy of the audio recording must provide the address of the injured worker and instruct the examining physician to provide a copy of the recording only to the injured worker within fifteen days of the request. WCRP 8-11(E).

If the injured worker alleges that the audio recording contains medical information not relevant to the workers' compensation claim which should remain confidential, the injured worker must reduce such allegation to writing and provide the written allegation, a copy of the audio recording and the IME report to the Division of Workers' Compensation Customer Service Unit (with a copy to the respondent and the IME physician) within fifteen days of the date the audio recording was provided to the injured worker. WCRP 8-11(F). Within ten days of the allegation being provided to the employer/insurer, the employer/insurer may file a response to the injured worker's allegation. WCRP 8-11(F). The Division then will refer the matter to an Administrative Law Judge for resolution. WCRP 8-11(K).

Once the injured worker alleges the audio recording contains medical information not relevant to the workers' compensation claim which should remain confidential, the respondent shall not make a request for the audio recording until the allegation is resolved. WCRP 8-11(J). If no timely allegation is made by the injured worker, the respondent then may request a copy of the audio recording by providing a written request to the examining physician, explaining that no allegation was made by the injured worker and a copy of the recording may be released to the respondent. WCRP 8-11(I).

Failure to comply with these rules may result in an IME being stricken, which can be very costly and also may severely damage any case set for hearing. It is important to ensure that adjusters and their defense counsel strictly comply with WCRP 8 to ensure an IME is not stricken and/or the respondent is not exposed to a potential penalty.

If you would like to discuss this matter in more detail, please feel free to contact me.

Changes to Division IME Strike Process
Posted by: Steven Picardi
August 27, 2010
Topic: Picardi Web Log

The Division IME strike process has been changed by the addition of § 8-42-107(3.5), which permits a party to obtain a "summary disclosure pertaining to any business, financial, employer or advisory relationship" between the physicians on the Division IME Panel and the parties to the claim. Consistent with the statutory amendment, the Director has amended Rule 11 to implement the procedure for requesting the summary disclosure.

Rule 11-3 (F) now provides that within five (5) business days of issuance of the three physician panel from the Division's IME Unit, a party may request a summary disclosure from the physicians on the list by submitting a written request for disclosure to the Division IME Unit. If no written request for disclosure is submitted by any party, then the requesting party shall have ten (10) business days to notify the Division IME Unit and the other party of its physician strike. If a party submits a request for summary disclosure to the Division IME Unit, the requirement to strike a name from the list shall be held in abeyance until the disclosure process is completed.

Upon receipt of the written request for disclosure, the Division IME Unit will notify the physicians on the list, in writing, of the request. Each physician shall have seven (7) business days from the date of the Division IME Unit's notice to provide a "Designated Health Care Provider Disclosure Form (WC 30 Disclosure Form)" If any physician on the Panel does not provide the WC 30 Disclosure Form within seven (7) business days, the physician shall be removed from the three-physician list and a substitute physician shall be selected by the Division IME Unit (who then must provide the WC 30 Disclosure Form to the Division IME Unit within seven (7) business days). Within five (5) business days of issuance of the WC 30 Forms by the Division IME Unit to the parties, the requesting party notify the Division IME Unit and the other party of its physician strike.

This Rule is effective on September 1, 2010. Physicians may pre-submit the form to the Division IME Unit, and many physicians will do so. However, many physicians will not pre-submit the WC 30 Disclosure Form, and will not timely respond to the request from the Division IME Unit for the WC 30 Disclosure Form. Therefore, either party dissatisfied with the three-physician panel may be able to alter the panel to their benefit by requesting a summary disclosure in the hopes that physicians will not respond within the seven business-day deadline.

If you would like to discuss this new statutory amendment and the corresponding rule in more detail, please feel free to contact me.

Waiting for Rating Worksheets May Waive Right to Request a Division IME
Posted by: Steven Picardi
August 19, 2010
Topic: Picardi Web Log

Section 8-42-107.2(2)(b) provides that "if any party disputes a finding or determination of the authorized treating physician" such party shall request the selection of a Division IME. W.C.R.P. 5-5(E) provides that [w]ithin 30 days after the date of mailing or delivery of a determination of medical impairment...the insurer shall either" file a Final Admission of Liability or a Notice and Proposal to Select an Independent Medical Examiner.

It is not uncommon for a respondent to receive a narrative report containing an impairment rating without the impairment rating worksheets. When this occurs, adjusters should know that the time for filing a Notice and Proposal to Select an Independent Medical Examiner may begin running as of the date of receipt of the impairment rating, and not as of the date of the receipt of the impairment rating worksheets. Servantes v. Exempla, Inc., W. C. No. 4-779-285 (July 20, 2010). In Servantes, the respondents received an impairment rating without worksheets on January 5, 2009. Respondents received the worksheets on February 6, 2009, and filed their Notice and Proposal to Select an Independent Medical Examiner on March 6, 2009 (within 30 days of receipt of the worksheets but more than 30 days after receipt of the impairment rating). Claimant set the matter for hearing on a motion to strike the Notice and Proposal (effectively requiring respondents to admit to the impairment rating of the authorized treating physician).

Administrative Law Judge Stuber found that the narrative report from the authorized treating physician contained all of the information necessary for the respondents to make an informed decision on whether to challenge the impairment rating, such that a Notice and Proposal to Select an Independent Medical Examiner was required to be filed within 30 days of receipt of the impairment rating. The Industrial Claim Appeals Office affirmed the Order, finding that "the issue becomes whether the respondent had all of the necessary factual predicates for determining whether to accept the opinion of the ATP and file a FAL or contest the opinion by filing a Notice and Proposal to Select a Division IME." Since Administrative Law Judge Stuber found that the respondents did have all the necessary factual predicates, the Industrial Claim Appeals Office was bound by that factual determination. Therefore, it affirmed the ALJ's Order striking the respondents' Notice and Proposal to Select an Independent Medical Examiner.

The ultimate holding in Servantes is that the determination of whether a Notice and Proposal to Select an Independent Medical Examiner was filed timely is a question of fact for the Administrative Law Judge. Since it is possible that an Administrative Law Judge may determine that the respondents had all necessary factual predicates for determining whether to accept the rating of the authorized treating physician upon receipt of the rating, rather than receipt of the worksheet, it is important to take steps to preserve the right to challenge the impairment rating even when the worksheets are not included with the rating. These steps may include filing an Application for Hearing, filing a Notice and Proposal to Select an Independent Medical Examiner (which always can be withdrawn upon the filling of a Final Admission of Liability), or otherwise taking steps to ensure receipt of worksheets within 30 days of receipt of the impairment rating. Failure to do so may result in the impairment rating being binding pursuant to § 8-42-107.2(2)(b).

Statutory Amendments Affect Responsibility for Termination of Employment Issue
Posted by: Steven Picardi
August 9, 2010
Topic: Picardi Web Log

Section 8-42-105(4) has long provided that an injured worker who is "responsible for termination of employment" shall not be entitled to temporary disability benefits as a result of that termination of employment. The Supreme Court has interpreted the term "responsible" to reintroduce into the Workers' Compensation Act the concept of "fault" in regards to termination. The term "fault" requires that the claimant must have performed some volitional act or exercised a degree of control over the circumstances resulting in the termination.

Effective July 1, 2010, § 8-42-105(4) has been amended to add a new subsection (b), which provides that an injured worker's refusal to accept an offer of modified employment does not constitute responsibility for termination where (I) the offer of modified employment would increase the claimant's one-way commuting distance more than fifty miles from the commute claimant had prior to the injury; or (2) an Administrative Law Judge determines that the claimant's rejection of the offer of modified employment was reasonable considering the totality of the claimant's circumstances. In determining reasonableness, the Administrative Law Judge may consider, among other things: (a) the consequences of the industrial injury; (b) the financial hardship that would be imposed on the claimant in order to accept the offer of modified employment; or (c) any other reason that would, in the opinion of the Administrative Law Judge, make in impracticable for the claimant to accept the offer of modified employment.

This amendment to the statute permits the Administrative Law Judge to determine whether an injured worker was at fault for refusing to accept an offer of modified employment by looking at the totality of the claimant's circumstances. Therefore, this amendment will make it more difficult for the employer to carry its burden of proving the injured worker was responsible for termination of employment where the termination occurred as the result of a refusal to accept an offer of modified employment, as the Administrative Law Judge has almost unlimited discretion to find it was "impracticable" for the claimant to accept the offer of modified employment. As a result, employers need to carefully consider all possibilities when making an offer of modified employment and when terminating an employee for failure to accept that offer of modified employment.

Keep in mind that this statutory amendment applies only to situations where an employer is seeking to terminate temporary disability benefits claiming an employee was responsible for termination of employment for refusing to accept an offer of modified employment. By its very terms the statute does not permit an Administrative Law Judge to determine the reasonableness of an offer of modified employment made pursuant to Rule 6-1(A)(4). Therefore, so long as the employer has complied with all requirements of Rule 6-1(A)(4), the respondents will be entitled to terminate Temporary Total Disability benefits regardless of whether Claimant refuses to accept the modified employment.

If you have any questions regarding the applicability of this new statutory amendment, please fee free to contact me.

Penalties for Dictating Medical Care
Posted by: Steven Picardi
August 5, 2010
Topic: Picardi Web Log

The Industrial Claim Appeals Office recently upheld Administrative Law Judge Cain's award of penalties of over $4,000 against respondents for "dictating medical care" because an adjuster canceled an EMG with the an authorized treating physician and required Claimant to have an EMG with a physician scheduled through One Call. The ALJ found that the delay in the performance of the EMG was attributable to the claim adjuster's refusal to authorize the physician to perform the EMG unless he "went through One Call", which was a violation of § 8-43-503(3) (prohibiting any party from dictating medical care). The Industrial Claim Appeals Office found that there was substantial evidence in the record to support the finding that the adjuster "effectively dictated the claimant's medical treatment by unilaterally attempting to modify Dr. Ogin's status as an ATP by dictating that before he performed the EMG he was required go through ‘vetting' by One Call." Casillas v. Bemas Construction, Inc., W.C. No. 4-777-652 (May 24, 2010). This is yet another case showing the dangers of attempting to require authorized treating physician to refer to particular providers or otherwise control the providers providing medical treatment in a particular case.

Update on Applicability of Exit Survey
Posted by: Steven Picardi
August 2, 2010
Topic: Picardi Web Log

In my web log entry dated June 23, 2010, I discussed the newly-created § 8-43-220 of the Workers' Compensation Act of Colorado, requiring all insurers to send an Exit Survey to all injured workers (or dependents in a death benefits case) within 30 days of closure of any claim. The effective date of the statute was July 1, 2010, but the statute did not set forth the contents of the survey. Rather, the statute indicated that the survey "shall be conducted in a form and manner as prescribed by the Director" of the Division of Workers' Compensation. Therefore, after a rule- making hearing, the Director of The Division of Workers' Compensation amended W.C.R.P. 5 to add § 5-14 to set forth the contents of the survey and the procedure to be followed when sending the survey to injured workers upon closure of the claim. The rule clearly states that it is effective September 1, 2010.

Today I spoke with the Division of Workers' Compensation and was informed that it is the Division's position that the exit surveys must be sent to all injured workers on any case closed on July 1, 2010 or later, despite the fact that the rule creating the contents of the survey does not become effective until September 1, 2010. The Division's position appears to be without any legal authority, as it cannot enforce a Rule before its effective date. However, since my web log entry indicated that the requirement to send the exit surveys did not begin until September 1, 2010, I wanted to make you all aware of the Division's position.

Rule 5-14 requires the exit survey to be sent within 30 days of closure of any claim. Therefore, you have time to send the survey on any claim closed since July 1, 2010.

If you have any questions regarding Rule 5-14 or the Division's position on the effective date of the Rule, please feel free to contact me.

The Picardi Law Firm is Expanding
Posted by: Steven Picardi
July 28, 2010
Topic: Picardi Web Log

Clay Thornton, Esq., joined the firm in May 2010. Clay has been working with the firm on a contract basis over the past seven years, but with the increase in the firm's case load he has come on board as an associate and has begun primary responsibility for several cases already. Clay brings extensive experience in workers' compensation litigation as well as exemplary legal writing and research skills, having served as a clerk in the Denver District Court and for the Supreme Court of the Federated States of Micronesia. A complete bio and additional information on Clay can be found here.

CMS Announces Requirement for Updated Life Tables
Posted by: Steven Picardi
July 23, 2010
Topic: Picardi Web Log

Effective for any newly-submitted Workers' Compensation Medicare Set-Aside Arrangement submitted after July 19, 2010, The Centers for Medicare and Medicaid Services will apply the 2006 United States Life Tables, Table 1: Life table for the total population: United States, 2006, recently published by The Centers for Disease Control. You will find Table 1 of the CDC's United States Life Tables on page 17 of the pdf document found here.

Disputes Over Medical Maintenance Benefits May Entitle Injured Worker to Costs of Litigation
Posted by: Steven Picardi
July 19, 2010
Topic: Picardi Web Log

It has long been the rule that each party is responsible for its own costs in litigating disputes in workers' compensation claims in Colorado. However, in an attempt to encourage respondents to admit for incurred and unpaid medical maintenance benefits (also called Grover medical benefits or medical benefits after Maximum Medical Improvement), the legislature passed Senate Bill 10-187, which, among other things, adds § 8-42-101(5). This subsection provides that an injured employee shall be entitled to recover "reasonable costs" in litigating whether the employee is entitled to "unpaid and contested" medical maintenance benefits recommended by an authorized treating physician. The reasonable costs are applicable only to medical maintenance benefits that have been incurred but not paid by the respondents, and are payable only if (1) an Administrative Law Judge enters an Order awarding the medical maintenance benefits in dispute; or (2) the respondents admit liability for the contested medical maintenance benefits fewer than twenty (20) days prior to the hearing.

The statute excludes attorney fees from the definition of costs, but does not otherwise define "reasonable costs." I anticipate that Administrative Law Judge would use the definition of costs used in civil cases, found at § 13-16-104. This statute basically permits recovery of all costs incurred in prosecution of the suit, including copying costs, deposition transcript costs and expert witness fees. Therefore, it will be very important for your defense attorneys to provide an analysis of exposure for maintenance medical benefits shortly after the Application for Hearing has been filed so that a decision can be made on whether to litigate or settle the case at least 20 days prior to the scheduled hearing. Otherwise, the respondents will be liable to claimant for the costs incurred in prosecuting the request for incurred and unpaid maintenance medical benefits.

The statutory amendment is applicable to injuries occurring on or after July 1, 2010.

2010 Legislative Changes Overview
Posted by: Steven Picardi
July 19, 2010
Topic: Picardi Web Log

The Division of Workers' Compensation overview of all legislative changes to the Workers' Compensation Act of Colorado in 2010 can be found here. I will continue to summarize each bill individually, but this overview may help put all changes into perspective.

Insurers Required to Send All Claimants an Exit Survey Beginning September 1, 2010
Posted by: Steven Picardi
June 23, 2010
Topic: Picardi Web Log

Section 8-43-220 of the Workers' Compensation Act of Colorado has been amended to require all insurers to send an Exit Survey to all injured workers (or dependents in a death benefits case) within 30 days of closure of any claim. The Division of Workers' Compensation has amended W.C.R.P. 5 to add § 5-14, which is effective September 1, 2010.

The survey shall include the name of the insurer and shall include a space for the claimant to sign if communicated by mail. The survey shall include the following language: "This survey relates to your recent workers' compensation claim. We would like to find out how satisfied you are with the way your claim was handled." The survey shall include instructions as to how to return the completed survey to the insurer, and the sentence "Insurers and employers are prohibited by law from taking any disciplinary action or otherwise retaliating against those who respond to this survey." In addition, the survey shall set forth only the following questions:

(1) On a scale from 1 to 5, with 1 being the least satisfied and 5 being the most satisfied, please describe your satisfaction with the level of courtesy shown to you in relation to your workers' compensation claim.

1                 2                 3                 4                 5

(2) On a scale from 1 to 5, with 1 being the least satisfied and 5 being the most satisfied, please describe your satisfaction with how promptly you received medical care.

1                 2                 3                 4                 5

(3) On a scale from 1 to 5, with 1 being the least satisfied and 5 being the most satisfied, please describe your satisfaction with how promptly your claim was handled.

1                 2                 3                 4                 5

(4) On a scale from 1 to 5, with 1 being the least satisfied and 5 being the most satisfied, please describe your satisfaction with how quickly any disputes in your claim were resolved. If you did not have any disputes, please mark NA.

1                 2                 3                 4                 5                NA

(5) On a scale from 1 to 5, with 1 being the least satisfied and 5 being the most satisfied, please describe your overall satisfaction with the way your claim was handled.

1                 2                 3                 4                 5

(6) The name of the adjuster handling your claim, if known.

The survey may be sent via e-mail, if the injured worker previously has authorized the insurer to communicate through electronic transmission. Otherwise, the survey shall be mailed to the claimant along with a self-addressed stamped return envelope.

The insurer is required to keep a copy of all surveys returned by injured workers. On or before the last day of January of each calendar year the insurer shall report the survey results to the Division. The report shall include the total number of surveys presented to claimants during the preceding calendar year, but shall be based on all survey results actually received by the insurer during that time. There are limitations on the information to be reported, which can be found here.

The insurer shall maintain the actual survey responses for a minimum of six months after providing the results to the Division, and shall provide the survey results to the Division upon request.

CMS Issues Amendment to Rated-Age Memorandum dated May 14, 2010
Posted by: Steven Picardi
June 23, 2010
Topic: Picardi Web Log

In a post on May 26, 2010, I discussed the May 14, 2010, Memorandum issued by Centers for Medicare and Medicaid Services (CMS) regarding Medicare Part D drugs and the use of rated ages to estimate a claimant's life expectancy in a Workers' Compensation Medicare Set-Aside (WCMSA). On June 8, 2010, CMS issued another Memorandum amending the May 14, 2010, Memorandum regarding the use of rated ages in WCMSAs.

The May 14, 2010, Memorandum required all WCMSA submitters to include a certification statement in association with Rated Age information. Effective immediately the Rated Age (RA) certification required by the May 14th memorandum is revised to:

"Our organization certifies that all rated ages we have obtained and/or have knowledge of regarding this claimant, and generated at any time on or after the Date of Incident for the alleged accident/illness/injury/incident at issue, have been included as part of this submission of a proposed amount for a Workers' Compensation Medicare Set-Aside Arrangement (WCMSA) to the Centers for Medicare & Medicaid Services."

The June 8, 2010, Memorandum goes on to state that CMS will not accept any variation or substitute wording. If a submitter is including RA information in its WCMSA proposal, the revised certification language must be included as written, with no exceptions. If this specific language is not included as part of the WCMSA proposal, CMS will not accept the RA provided. Instead, CMS will estimate the claimant's remaining life expectancy using Actual Age. For the convenience of those already in the process of submitting a proposal, CMS will continue to accept the certification language required by the May 14, 2010 memorandum for proposals received up through and inclusive of June 30, 2010.

All other requirements of acceptable proof of a Rated Age for a claimant are unchanged. Acceptable proof of Rated Age is demonstrated through inclusion of independent rated ages on the letterhead of an insurance carrier or settlement broker.

Ex-Parte Communication with Providers Still Permissible
Posted by: Steven Picardi
June 23, 2010
Topic: Picardi Web Log

On May 27, 2010, Governor Ritter signed Senate Bill 10-011, which enacts a number of procedural changes to the handling of workers' compensation claims. One of those changes is an amendment to § 8-43-404, by adding subsection (5)(c), which prohibits a treating physician from communicating with the employer or insurer unless (1) the injured worker is present for the communication; or "the treating physician makes an accurate written record of the communication, containing all relevant and material information that was communicated, and provides the injured worker access to the writing in the same manner as medical records disclosures as required by director rules." [sic]

This statutory amendment is a clear indication that employers and adjuster still are permitted to contact treating physicians without the presence of the injured worker or the injured worker's counsel. However, if the injured worker or counsel is not included in the conversation, then the treating physician must make an accurate written record and provide it to the claimant in the same manner as medical records. The statute is silent on what happens when the treating physician fails to create a written record of the conversation. However, I recommend that adjusters remind physicians of the duty to create a written record of the conversation, to avoid a claim for penalties or other litigation in the event the physician neglects to do so.

Average Weekly Wage Limited to Maximum Rate at Time of Injury - Overruling Avalanche Industries
Posted by: Steven Picardi
June 14, 2010
Topic: Picardi Web Log

In 2008, the Supreme Court, addressing the issue of Average Weekly Wage, stated in dicta that a claimant’s “time of injury” could refer either to the time of the accident or the time of disablement. Avalanche Industries, Inc. v. Clark, 198 P.3d 589, 597-98 (Colo. 2008). In several cases since that time, different panels of the Court of Appeals have upheld an Administrative Law Judge’s award of benefits based on the maximum rate at the time the injury became disabling (which was higher than the maximum rate at the time of injury). In City of Colorado Springs v. Bennett, the Supreme Court overruled that portion of Avalanche Industries which permitted a claimant to obtain benefits based on the maximum rate at the time of disablement, and limited an award of benefits to the maximum rate at the time of injury. City of Colorado Springs v. Bennett, ___ P.3d. ___, 09SC586 (Supreme Court, June 1, 2010).

In City of Colorado Springs v. Bennett, the claimant was injured in a motor vehicle accident in 2000. Claimant’s conditioned worsened in 2004, and the respondent agreed to reopen his case, eventually admitting liability for Permanent Total Disability benefits at the maximum rate in effect in 2000. Claimant objected to the Final Admission of Liability and requested Permanent Total Disability benefits based on the maximum rate in 2004, when his injury became disabling again. The Court of Appeals, citing the Supreme Court's opinion in Avalanche Industries, increased claimant’s Permanent Total Disability benefits based on the maximum rate in effect in 2004. The respondent appealed to the Supreme Court, arguing that the dicta in Avalanche Industries was incorrect and unnecessary to a determination to the case it was deciding at that time.

The Supreme Court agreed, overruling the section of its opinion in Avalanche Industries which held that the term “time of injury” could mean either the time of the accident or the time of disablement because the language was unnecessary to its ruling in that case. It further reasoned that, because the Court of Appeals relied upon that section of the opinion in Avalanche Industries to award Permanent Total Disability benefits based on the maximum rate in effect at the time of disablement, the Supreme Court reversed the Court of Appeals opinion and limited the claimant to the maximum rate at the time of injury.

This case resolves much of the ambiguity and concern caused by the Avalanche Industries case, and should put to rest any claims for an increase in Average Weekly Wage based on the date the injury became disabling. 

CMS Issues Memorandum to Clarify Guidance Regarding Prescription Drugs and Rated Language in Medicare Set-Aside Accounts
Posted by: Steven Picardi
May 26, 2010
Topic: Picardi Web Log

On May 14, 2010, The Centers for Medicare and Medicaid Services (CMS) issued a Memorandum which clarifies previous memoranda regarding Medicare Part D drugs and the use of rated ages to estimate a claimant’s life expectancy in a Workers’ Compensation Medicare Set-Aside (WCMSA).

For those workers’ compensation settlements effectuated prior to June 1, 2010, and where the settlement included non-covered Part D drugs as part of the WCMSA, CMS will consider funds spent for those non-covered Part D drugs by beneficiaries and claimants as being an appropriate expenditure of funds as part of the WCMSA.

For those workers’ compensation claims that were not settled prior to June 1, 2010, and where the settlement includes non-covered Part D drugs as part of the WCMSA, CMS will consider a re-pricing of those cases that included non-covered Part D drugs. Once CMS performs a re-pricing of the WCMSA, beneficiaries and claimants may not use funds from their WCMSA to pay for non-covered Part D drugs. Doing so constitutes an inappropriate expenditure of WCMSA funds.

For those workers’ compensation settlements resolved on or after June 1, 2010, and where the settlement does not include non-covered Part D drugs as part of the WCMSA, beneficiaries and claimants may not use funds from their WCMSA to pay for those non-covered Part D drugs. Again, doing so constitutes an in-appropriate expenditure of funds as part of the WCMSA.

Please be aware that this Memorandum may result in a re-pricing of previously agreed-upon WCMSAs where a case is resolved after June 1, 2010 and the WCMSA included non-covered Part D drugs.  Adjusters may want to review any such WCMSA to ensure that settlement reserves are sufficient to satisfy any re-priced WCMSA.

In addition, the Memorandum, in order to “mitigate confusion and eliminate ambiguous statements” concerning Rated Ages used in a WCMSA, all WCMSA submitters must include the following certification statement in association with Rated Age information:

“Our organization certifies that all rated ages obtained on the claimant, at any time during that individual claimant’s lifetime, have been included as part of this submission to the Centers for Medicare & Medicaid Services.”

The Memorandum uses some very strong language regarding the importance of this certification: “The CMS will not accept any variation or substitute wording. If a submitter is including RA information in its WCMSA proposal, the new certification language must be included as written, with no exceptions. If this appropriate statement is not included as part of the WCMSA proposal, CMS will not accept the RA provided. Instead, CMS will estimate the claimant’s remaining life expectancy using Actual Age.”

All other requirements of acceptable proof of a Rated Age for a claimant are unchanged. Acceptable proof of Rated Ages is demonstrated through inclusion of independent rated ages on the letterhead of an insurance carrier or settlement broker.
 

Impairment Rating Worksheets Required to be Attached to Final Admission of Liability Only When Worksheets Have Been Completed by the Rating Physician
Posted by: Steven Picardi
May 20, 2010
Topic: Picardi Web Log

The Workers’ Compensation Act of Colorado mandates that when a Final Admission of Liability is predicated upon medical reports, those medical reports shall be attached to the Final Admission of Liability. Section 8-43-203(2)(b)(II).  The Court of Appeals previously has held that when the rating physician prepared a worksheet on the same date as the examination, but the employer failed to attach the worksheet to the Final Admission of Liability, the Final Admission of Liability was invalid.  Paint Connection Plus v. Indus. Claim Appeals Office, ___ P.3d ___, ___ (Colo. App. No. 09CA0598, Jan. 7, 2010).

However, physicians do not always prepare worksheets at the time the adjuster files the Final Admission of Liability. The Court of Appeals issued an opinion today which holds that in those instances where worksheets do not exist at the time of filing the Final Admission of Liability, the failure to attach the worksheets does not invalidate the Final Admission of Liability. Aguilar v. Industrial Claim Appeals Office, ___ P.3d ___, (Colo. App. No. 09CA1792, May 20, 2010)(not selected for publication). The Court of Appeals in Aguilar bases its opinion on the specific holding in Paint Connection, which limited its holding to “include only those situations where worksheets had actually been prepared by the rating physician.”

Though the Aguilar case was not selected for publication (and therefore may not be cited as controlling authority), the case almost certainly will be followed by Administrative Law Judges and the Industrial Claim Appeals Office. Therefore, an adjuster should be safe in filing a Final Admission of Liability without worksheets if no such worksheets exist at the time of filing the Final Admission of Liability.

If you would like to discuss this case in more detail, please feel free to contact me.
 

All Initial Admissions or Denials Must Include Notice of Rights to Claimant
Posted by: Steven Picardi
May 13, 2010
Topic: Picardi Web Log

On May 13, 2010, the Colorado General Assembly sent House Bill 10-1038 to Governor Ritter for signature. The Bill requires that all initials determinations of liability (i.e. initial admissions or denials) must contain a brochure setting forth the claimant’s rights under the Workers’ Compensation Act of Colorado. The bill applies to all dates of injury and becomes effective upon signature of the Governor (which should occur in the next few days). Therefore, all employers, third-party administrators and insurance carriers should start attaching the brochure to all initial determinations of liability immediately. The brochure can be downloaded from the Division of Workers’ Compensation here.

Supreme Court Finds $60,000 Lump Sum Applicable to All Dates of Injury
Posted by: Steven Picardi
May 11, 2010
Topic: Picardi Web Log

In 2009 the Court of Appeals reversed the Industrial Claim Appeals Office’s denial of a $60,000 lump sum application, and found that the $60,000 lump sum was to be applied retroactively to all dates of injury. Nelson v. Industrial Claim Appeals Panel, 219 P.3d 416 (Colo. App. 2009). The Supreme Court accept certiorari to consider whether the Court of Appeals was correct in holding that the $60,000 lump sum statute was to be applied retroactively to all dates of injury. While the Supreme Court appeal was pending in Nelson, a separate panel of the Court of Appeals reached the same decision in Navarette v. Industrial Claim Appeals Office, 09CA0794, January 28, 2010 (not selected for publication). See, February 23, 2010, web log entry.

On May 10, 2010, the Supreme Court affirmed the Court of Appeals’ opinion in Nelson and found that the $60,000 lump sum is retroactive to all dates of injury. Specialty Restaurants Corp. v. Nelson, 09SC536, May 10, 2010. This lays to rest the issue of the retroactivity of the lump sum statute, and any requests for the $60,000 lump sum pursuant to Section 8-43-406 C.R.S. (2009) should be paid pursuant to the Supreme Court opinion.

If you would like to discuss this or any other workers’ compensation issue, please feel free to contact me.

Status of Proposed Workers' Compensation Bills
Posted by: Steven Picardi
April 28, 2010
Topic: Picardi Web Log

Three proposed workers' compensation bills remain on the blocks in the Capitol. These bills are worth looking at to determine whether you want to write to legislators:

Senate Bill 10-011

Section 1 of the bill requires a physician who has been proposed by the Division of Workers' Compensation to perform a Division IME of an injured worker to disclose any business, employment, financial, or advisory relationship with an insurer or self-insured employer if a party requests the information, gives a party to the Division IME process the right to obtain and review the information regarding any physicians proposed to conduct the Division IME prior to making a determination to eliminate one of the proposed physicians as an examiner, and directs the Director of the Division of Workers' Compensation to adopt rules as
necessary to implement the disclosure requirements.

Section 2 of the bill prohibits the payment of a financial incentive by an insurer, self-insured employer, or health care provider to deny or delay a workers' compensation claim, or to deny or delay medical care or payment for medical treatment for any such claim, and declares that a violation of its provisions constitutes bad faith and an unfair or deceptive practice in the business of insurance and subjects the person committing the violation to penalties under the unfair or deceptive insurance practices statutes, which may be up to $3,000 per violation, not to exceed an aggregate penalty of $30,000, or, in the case of knowing violations, up to $30,000 per violation, not to exceed an aggregate penalty of $750,000 annually, as well as subjects persons violating its revisions to penalties under the "Workers' Compensation Act of Colorado".

Section 3 prohibits a treating physician from communicating with the insurer or employer of an injured worker unless the injured worker is present or the communication is in writing and is provided to the injured worker.

Section 4 specifies that contractual provisions that establish a reversionary interest in an insurer for indemnity benefits are void as against public policy.

Senate Bill 10-012 increases the penalty for violating the workers' compensation laws from up to $500 to up to $1,000, changes the mental state from "willfully" to "knowingly" in the statute that penalizes denying workers' compensation medical benefits, delaying payment of medical benefits for more than 30 days, or stopping payments, and allows the director of the division of workers' compensation or an administrative law judge to apportion the penalties, in whole or part, among the aggrieved party, the medical services provider, and the workers' compensation cash fund.

Senate Bill 10-013

Section 1 of the bill requires workers' compensation insurers to survey a limited number of injured workers at the close of each claim, requires the insurers to report the results of the surveys to the division of workers' compensation, and prohibits an employer or insurer from taking disciplinary action or otherwise retaliating against an injured worker or his or her dependents for completing a survey.

Section 2 of the bill requires the chief executive officer of Pinnacol Assurance to submit an annual report to the governor and committees of the general assembly reporting on the business operations, resources, and liabilities of the Pinnacol Assurance fund.

Section 3 of the bill requires the division to post on the division's web site the procedure for an injured worker to follow to file a complaint with the division regarding any issue over which the director or his or her designee has authority to pursue, settle, or enforce.

To review the actual bills, click here.

If you would like to discuss these bills or any other workers' compensation matters, please feel free to contact me.

Colorado Court of Appeals Upholds Statutory Employer Defense for Merchandisers

Posted by: Steven Picardi
April 6, 2010
Topic: Picardi Web Log

The Colorado Court of Appeals, in Humphrey v. Whole Foods Market, ___ P.3d ___ (Colo. App. 09CA0234, April 1, 2010), recently affirmed the trial court's dismissal of the a negligence suit brought by a merchandiser against the grocery store where he was injured. Humphrey was a delivery driver working for Phil's Fresh Foods who supplied and stocked Phil's products inside the Whole Foods market (frequently the job duties are characterized as a "merchandiser"). Humphrey injured himself while working for Phil's inside the Whole Foods Market. He filed a workers' compensation claim, and also pursued a premises liability action against Whole Foods. The District Court granted summary judgment, concluding that the "statutory employer" provisions of the Workers' Compensation Act of Colorado granted Whole Foods complete immunity from suit because Humphrey's employer carried workers' compensation insurance.

Whether an employer is a statutory employer depends upon the nature of the work the employee performs for the employer. The test for whether an employer is a "statutory employer" is whether the work "contracted out" is part of the employer's regular business as defined by its total business operation. Finlay v. Storage Technology Corporation, 764 P.2d 62, 67 (Colo. 1988).Humphrey argued that, because there was no contract between Phil's and Whole Foods which required Phil's to service its products in the store, Whole Foods did not "contract out" the services Humphrey performed, so that Whole Foods was not a statutory employer immune from tort liability under section 8-41-401(2). The District Court found an implied contract existed, such that Whole Foods contracted out to Phil's the work it otherwise would have had to perform.

The Court of Appeals affirmed the reasoning of the District Court in dismissing Humphrey's action against Whole Foods.

Many of my clients utilize the services of merchandisers in their business operations. This is an important case to keep in mind when a merchandiser is injured on the job and brings a negligence action against the store where he was injured.

CMS announces new Life Tables for use in Medicare Set-Asides
Posted by: Steven Picardi
March 22, 2010
Topic: Picardi Web Log

The Centers for Medicare and Medicaid Services (CMS) announced last week that any  Workers’ Compensation Medicare Set-Aside Accounts (WCMSAs) submitted after April 12, 2010 (whether a new MSA or a reopened MSA) must use the 2005 United States Life Tables, Table 1: Life table for the total population: United States, 2005, published by the Centers for Disease Control. Table 1 can be found at the CDC’s website: http://www.cdc.gov/nchs/data/nvsr/nvsr58/nvsr58_10.pdf. You will need to go to page 8 to find Table 1.

Refusal to undergo surgery or treatment may reduce compensation benefits
Posted by: Steven Picardi
March 18, 2010
Topic: Picardi Web Log

I have seen quite a few cases in the past several months where claimants are refusing surgery which has been recommended by a treating physician. Oftentimes the respondent has no desire to force an employee to undergo surgery, since surgery will result increase the exposure for medical benefits and temporary disability benefits. However, in addition to the savings in medical benefits and temporary disability benefits, a claimant’s refusal to undergo surgery may also decrease the respondent’s exposure for Permanent Partial Disability benefits.

Section 8-43-404(3) provides, in pertinent part: “If any employee ... refuses to submit to such medical or surgical treatment or vocational evaluation as is reasonably essential to promote recovery, the director shall have the discretion to reduce or suspend the compensation of any such injured employee.” This section “seeks to prevent the situation where a claimant by refusal of reasonable medical treatment aggravates the compensable consequences of the industrial injury and thereby imposes increased liability on the respondent. Aranda v. Evraz, Inc., W. C. No. 4-628-418 (February 17, 2010); See generally 1 Larson, Workers’ Compensation Law, §10.10. This section provides the respondent an opportunity to argue the claimant’s Permanent Partial Disability benefits award should be reduced as a result of the claimant’s refusal to undergo a reasonable medical treatment or surgery which would have reduced the claimant’s overall disability.

This issue is rarely raised in workers’ compensation claims, but there is statutory and case law which permits the argument to be made before an Administrative Law Judge. Therefore, remember this statutory section when an injured employee refuses medical treatment and then receives an impairment rating, as the refusal to undergo the treatment may provide a basis to reduce Permanent Partial Disability benefits.

If you would like to discuss this or any other workers’ compensation issue in more detail, please fee free to contact me. 

OSHA Releases Workplace Injury and Illness Information

Posted by: Steven Picardi
March 8, 2010
Topic: Picardi Web Log

Every year since 1996, the Occupational Safety and Health Administration (OSHA) has collected work-related injury and illness data from more than 80,000 employers, which it uses to calculate injury and illness incidence rates to guide its strategic management plan and to focus its Site Specific Targeting (SST) Program, which the agency uses to target its inspections. For the first time ever, For the first time, OSHA has made this data available in an online database searchable by establishment or industry-specific injury and illness data. Information available includes: an establishment's name, address, and industry; associated Total Case Rate (TCR): Days Away, Restricted, Transfer (DART) case rate; and the Days Away From Work (DAFWII) case rate. The data is specific to the establishments that provided OSHA with valid data through the 2008 data collection (collection of CY 2007 data). This database does not contain rates calculated by OSHA for establishments that submitted suspect or unreliable data.

To access the searchable database, click here.

If you have any questions or would like to discuss this information further, please feel free to contact me.
 

Medical Only Admissions - Practice Pointer
Posted by: Steven Picardi
February 28, 2010
Topic: Picardi Web Log

I have seen a number of General Admission of Liability lately which have admitted for medical benefits only but have not taken any position on temporary disability benefits or Permanent Partial Disability benefits. Remember that Colorado Workers' Compensation Rule of Procedure 5-5(B) provides that an admission filed for medical benefits only "shall include remarks outlining the basis for denial of temporary and permanent disability benefits." Therefore, all medical only admissions should contain some type of statement explaining the reason for denying disability benefits. A very general statement explaining the basis for denying benefits (e.g. "Claimant has not lost any time from work as a result of the injury and is not at Maximum Medical Improvement") is sufficient to satisfy the requirements of Rule 5-5(B).

There is no requirement to attach a Supplemental Report of Return to Work or wage records if temporary disability benefits have not yet been admitted or paid. However, if Temporary Total Disability benefits or Temporary Partial Disability have been admitted or paid, then respondent must comply with Rule 6.

If you have any questions, please feel free to contact me.

$60,000 Lump Sum applicable to all dates of injury
Posted by: Steven Picardi
February 23, 2010
Topic: Picardi Web Log

In a previous post I discussed the case of Nelson v. Industrial Claim Appeals Office, 219 P.3d 416 (Colo. App. 2009), where the Court of Appeals reversed the Industrial Claim Appeals Office's interpretation of Senate Bill 07-258 (amending § 8-43-406(2) increasing the lump sum amount to $60,000), and found that the $60,000 lump sum applies retroactively to any date of injury. The respondent did not appeal that Order and the Court of Appeals decision became final.

A separate panel of the Court of Appeals recently reached the same decision in Navarette v. Industrial Claim Appeals Office, ___ P.3d ___, (Court of Appeals No. 09CA0794, January 28, 2010). In Navarette, the Director denied a $60,000 lump sum based on a 1976 Court of Appeals' case holding that, in the absence of express legislative intent to the contrary, the increase in the maximum lump sum payment applied only to injuries occurring after the amendment's adoption. The claimant appealed, arguing that Nelson, decided in 2009, controlled the issue and the Director should have followed Nelson. The Court of Appeals agreed that Nelson controlled, despite the employer's argument that "Nelson was incorrectly decided and [the Court of Appeals] should disregard it because the substantive rights of employers could be affected by an unanticipated increase in the amount of a lump sum payment." The Court of Appeals was not persuaded to deviate from the reasoning in Nelson, and remanded the case to the Industrial Claim Appeals Office to enter an Order awarding the $60,000 lump sum. Thus, unless the Supreme Court grants certiorari to review the decision, the $60,000 lump sum statute will be retroactively applied to all claims, regardless of date of injury.

If you have any questions regarding this or any other workers' compensation issue, please fee free to contact me.

DWC Issues Updated Impairment Rating Tips for Physicians
Posted by: Steven Picardi
February 2, 2010
Topic: Picardi Web Log

Last fall the Division of Workers' Compensation convened a Focus Group (consisting of physicians and other medical practitioners, claimant and defense attorneys, officials from the Division of Workers' Compensation) to discuss some proposed revisions to the Division of Workers' Compensation's "Impairment Rating Tips." The update contains significant changes to the previous Impairment Rating Tips, and serves as a good refresher on impairment ratings for adjusters and attorneys.

The document contains new tips addressing the following areas:

• Partial Shoulder Joint Replacement (recommended to rate at 20%)
• Recommendation on "Grover Meds" and Impairment
• Rating Abdominal Hernias (just some reminders)
• Musculoskeletal Cumulative Trauma Disorders (written in tandem with the preceding existing section, "Peripheral Nerve Injuries Resulting from Cumulative Trauma," which is now slightly modified)
• Diagnostic Tests and MMI (In the section for DIME Doctors (page 7))

The document also changes or adds to the following existing sections:

• Rating Extremities Using the Contralateral Joint (differentiating apportionment);
• Peripheral Nerve Injuries Resulting from Cumulative Trauma: slightly modified in connection with the new section, Musculoskeletal Cumulative Trauma Disorders

The new Division of Workers' Compensation Impairment Rating Tips can be found here (scroll down to Desk Aid # DK11).

If you would like to discuss this document further or have any other questions, please feel free to contact me.

2010 Proposed Statutory Amendments to Work Comp Act
Posted by: Steven Picardi
January 26, 2010
Topic: Picardi Web Log

As always, the Colorado General Assembly has proposed a number of bills affecting the workers' compensation system. Some of these bills may have a significant impact on the claims handling process.

The most concerning bill is House Bill 10-1012, which would prohibit an insurer or employer from conducting surveillance of an employee who has submitted a workers' compensation claim unless the insurer or employer has a reasonable basis to suspect that the employee has "committed fraud or made a material misstatement concerning the claim." The vague language very well might prohibit the employer and insurer from obtaining surveillance in a multitude of situations where surveillance previous has been a useful tool in the adjusting of a questionable claim.

Senate Bill 10-012 proposes an increase in penalties for violations of the Act, from the current maximum penalty of $500 per day to a new maximum of $1,000 per day, and would permit the Administrative Law Judge to apportion the award between the claimant, medical provider or other aggrieved party. If passed, this amendment to the statute would increase the incentive of claimants to file for penalties against the insurer, including penalties for late payment of medical bills.

The bills and the current status of the bills can be viewed here.

If you would like to discuss these bills, please feel free to contact me.

Penalties for filing FAL before MMI for "all conditions"
Posted by: Steven Picardi
January 20, 2010
Topic: Picardi Web Log

On January 7, 2010, the Court of Appeals affirmed the Administrative Law Judge's award of penalties against the respondents for filing a Final Admission of Liability denying liability for a part of the condition which an authorized physician determined to be caused by the injury. Paint Connection Plus v. Industrial Claim Appeals Office, ___ P.3d ___ (Court of Appeals No. 09CA0598, January 10, 2010). A copy of the decision can be obtained by clicking here.

The respondent insurer filed several general admissions of liability admitting for medical and temporary disability benefits for a "right shoulder rotator cuff tear and right shoulder SLAP tear only." The claimant's surgeon referred him to another physician for an impairment rating to his right upper extremity. The physician found that the claimant had reached maximum medical improvement for that injury and provided an impairment rating. However, the rating physician further opined that claimant was suffering from a neck condition that was related to the original injury, and was not at MMI for that neck condition. Respondents filed a Final Admission of Liability admitting for the impairment rating to the shoulder condition but denying liability for the neck condition.

Claimant objected to the Final Admission of Liability and set the matter for hearing on the issues of the validity of the FAL and penalties. The Administrative Law Judge found that because the rating physician found Claimant was not at MMI, the FAL was invalid because it did not comply with Rule 5-5(E), which requires that the carrier file a Final Admission of Liability "consistent with the physician's opinion" within 30 days of receipt of an impairment rating from an authorized Level II accredited physician. The Court of Appeals, relying on the line of cases holding that MMI is not divisible, held that respondents were not at liberty to disregard the determination by the rating physician that the neck injury was caused by the original compensable industrial original. The Court, therefore, affirmed the determination that the Final Admission of Liability was invalid because it did not comply with the rating physician's determination that the neck condition was caused by the industrial injury. The Court went on uphold the award of penalties based on the failure to comply with Rule 5-5(E).

This case now makes it very clear that the respondents cannot file a Final Admission of Liability when an authorized physician determines that a particular condition is causally related to the injury and has not reached MMI for that condition, even when the respondents previously have admitted for only particular components of the injury. If Respondents disagree that a portion of the injury is compensable, they must challenge the determination of causation and MMI by setting the matter for hearing for a judicial determination of the causal relationship of that condition, obtaining an 18-month Division IME pursuant to §8-42-107(8)(b)(II), or some other procedure.

The requirement to challenge the determination of causation and MMI necessarily will result in delay before a Final Admission of Liability can be filed. If the claimant is entitled to Temporary Total Disability benefits while the process proceeds, the respondents may be required to pay substantial Temporary Total Disability benefits. If the rating for the admitted portion of the claim entitles the claimant to a significant award of Permanent Partial Disability benefits, challenging the condition through hearing or Division IME probably will not create a problem, as the respondents can claim any overpayment of Temporary Total Disability benefits against the award of Permanent Partial Disability benefits. However, if the rating for the admitted portion of the claim does not entitle the claimant to a significant award of Permanent Partial Disability benefits, the insurer faces the possibility of a significant overpayment of Temporary Total Disability benefits while the Division IME or hearing is pending.

If you would like to discuss the impact of this case on one of your claims, please feel free to contact me.

The Division of Workers' Compensation announced the new compensation rates effective for injuries on or after July 1, 2009.
Posted by: Steven Picardi
June 22, 2009
Topic: Picardi Web Log

The maximum rate for Temporary Total Disability benefits, Permanent Total Disability benefits or death benefits is $807.24.

The scheduled impairment rate is $254.06.

The disfigurement maximum is $ 4,286.00, or up to $ 8,572.00 for extensive facial or body scars, burn scars or stumps resulting from the loss of limbs.

The Memorandum from the Division of Workers' Compensation and the Order from the Director establishing these rates can be found at http://www.coworkforce.com/dwc/Notices/Other_Notices/AWW_Order_2009.pdf

Industrial Claim Appeals Office lump sum payment decision reversed
Posted by: Steven Picardi
June 22, 2009
Topic: Picardi Web Log

You will remember that one of the legislative changes found in Senate Bill 07-258 included an amendment to § 8-43-406(2) increasing the lump sum amount to $60,000. The statute was silent on whether the increase applied retroactively, to claims with a date of injury before the effective date of July 1, 2007. The Director had interpreted the statutory amendment as a procedural change having retroactive effect, and granted lump sums up to $60,000 even when the statute in effect at the time of the injury limited the maximum lump sum to a lesser amount. The Industrial Claim Appeals Office reversed the Director's order in Nelson v. Specialty Restaurants Corp., W. C. No. 3-987-235 (May 2, 2008), and denied the Director's award of a lump sum up to $60,000, as the statute in effect at the time of the injury did not permit lump sums in that amount.

Claimant appealed the decision to the Court of Appeals, which just reversed the decision of the Industrial Claim Appeals Office and held that the statute can be applied retroactively to grant lump sums of up to $60,000 for all dates of injury. Nelson v. Industrial Claim Appeals Office, ___ P.3d ___, 2209 WL 1477557 (Colo App. 2009). The Order was released only a few days ago, so we will not know if Respondents will appeal the Order for some time.

Caution on Final Admissions of Liability
Posted by: Steven Picardi
May 1, 2009
Topic: Picardi Web Log

The Industrial Claim Appeals Office recently announced a holding with potentially significant ramifications for reopening a claim. In Barfoot v. XCEL Energy, W. C. No. 4-540-676 (April 16, 2009), the ICAO held that the statute of limitations for reopening a claim was tolled because Respondents' Final Admission of Liability failed to properly identify the date when claimant's Permanent Partial Disability benefits would be paid out in full.

The reopening statute provides that a case may be reopened to award additional compensation or medical benefits at any time within two years of the last payment of temporary or permanent disability benefits become due or payable. § 8-43-303(2)(a) (emphasis added). In Barfoot, the Benefits History on respondents' Final Admission of Liability incorrectly calculated the date when the last payment of Permanent Partial Disability benefits would be paid (the benefits were paid out in full in April 2005, but the Final Admission of Liability indicated they would be paid through May 2006). Claimant filed his Petition to Reopen within two years of the date the last benefits would be paid pursuant to the Final Admission of Liability, but more than two years from the last date the Permanent Partial Disability benefits actually were paid. Respondents argued that claimant's Petition to Reopen should be dismissed because it was not filed within two years of the date the last payment of Permanent Partial Disability benefits because due and payable. Claimant argued that the two year statute of limitations should be equitably tolled because the Final Admission of Liability put him on notice that the last benefits would be due and payable in May 2006. ICAO held that, because claimant testified that he relied on the incorrect date in the Final Admission of Liability in calculating when he needed to file his Petition to Reopen, the matter must be remanded to the Administrative Law Judge to determine whether the incorrect date in the Final Admission of Liability equitably tolled the statute of limitations.

This case emphasizes the importance of correctly calculating the date through which Permanent Partial Disability benefits will be paid, so that claimants cannot argue they were not properly informed of the date they needed to file a Petition to Reopen. In addition, the case may require companies to reconsider their methods of admitting for Permanent Partial Disability benefits in the Benefits History section of Final Admissions of Liability. Many carriers or TPAs admit for Permanent Partial Disability benefits from the date of MMI through "payout". This case may allow claimants to argue that using the term "payout" did not give sufficient notice of the date that a Petition to Reopen needed to be filed, such that the statute of limitations should be equitably tolled. This may require reconsideration of the use of the term "payout" on a Final Admission of Liability. Given the uncertainty and potential to lose the statute of limitations defense, it probably would be wise to calculate the date through which benefits will be paid in order to put claimants on notice of the date a Petition to Reopen must be filed.

CMS's Standards for Acceptable Proof of Rated Age
Posted by: Steven Picardi
April 23, 2009
Topic: Picardi Web Log 

Effective April 21, 2009, submitted rated ages that do not conform to CMS's standards for acceptable proof of Rated Age (which requires an independent rated age on the letterhead of an insurance carrier or settlement broker, and includes a statement from the submitter that all rated ages obtained on the claimant have been included in the MSA proposal), will be priced using actual age.  CMS will not consider re-pricing the workers' compensation case using the new or corrected rated age information provided by submitters. Therefore, make sure all MSA proposals include independent rated ages on the letterhead of an insurance carrier or broker.

Governor Ritter Signs Amendment to Workers' Compensation Act
Posted by: Steven Picardi
April 15, 2009
Topic: Picardi Web Log 

On March 24, 2009, Governor Ritter signed Senate Bill 09-070 into law. The intent of this bill is to amend the Workers' Compensation Act in an effort to clarify several workers' compensation procedures. The most important for adjusting purposes is the change to § 8-42-105(2)(a), which previously provided that the first payment of compensation was due no later than twenty days after notice or knowledge of a lost-time injury. The new statute requires payment of compensation at the time an admission of liability is filed. The statute "shall apply to workers' compensation claims (not injuries) on or after the effective date of the Act (which probably will be August 4, 2009, unless a referendum petition challenging the Act is filed, which is extremely unlikely).

To view the statute please click here. 

If you have any questions regarding the new Act or any other issue, please feel free to give me a call or send me an e-mail.

Review of MSA Proposals for Drug Treatment Costs/Expenses
Posted by: Steven Picardi
April 9, 2009
Topic: Picardi Web Log

The Centers for Medicare and Medicaid Services (CMS) issued a formal memorandum on April 3, 2009, announcing that effective June 1, 2009, all Workers' Compensation Medicare Set-Aside (MSA) proposals will be reviewed to ensure the adequacy of future drug treatment costs/expenses using average wholesale price (AWP). The CMS will not use or recognize any other pricing, discounting, or calculation methods when determining the adequacy of the prescription drug amounts in WCMSA proposals (including Colorado's Medical Fee Schedule).

The full memorandum can be found at http://www.nuquestbridgepointe.com/news/uploads/cms_memo_4-6-2009.pdf.

If you have any questions regarding this memorandum or any other issue, please fee free to give me a call or send me an e-mail.

2008 Legislative Changes
Posted by: Steven Picardi
June 30, 2008
Topic: Picardi Web Log

Senate Bill 08-241 was the only bill having any impact on the handling of workers' compensation claims this year, but the bill significantly changed the law on apportionment.

Section 8-42-104(2) regarding apportionment for Permanent Total Disability benefits has been repealed completely. The legislature enacted new procedures for apportionment of Permanent Total Disability benefits, which were codified at § 8-42-104(4).

Section 8-42-104(3) disallows reduction of temporary total, temporary partial or medical benefits to an injured worker based on a previous injury (which had been permitted by decision of the Supreme Court). Therefore, an employer no longer may pay only a portion of medical or temporary disability benefits, arguing that a percentage of those benefits should be apportioned to prior injuries. 

Section 8-42-104(4) disallows apportionment of permanent total disability benefits when the disability is the result of (1) work-related injury; or (2) work-related injury combined with genetic, congenital or similar conditions. Permanent total disability benefits may be apportioned in cases where an occupational disease results from contributing factors both within and outside the workplace as set out in Anderson v. Brinkhoff, 859 P.2d 819, (Colo.1993). Therefore, if an injury aggravates or combines with a previous industrial or non-industrial disability to make an employee unable to earn any wages, the employer bears full responsibility for the Permanent Total Disability benefits.

Section 8-42-104(5)(a) allows for the reduction of a permanent medical impairment award (apportionment) when the employee has suffered more than one permanent medical impairment to the same body part and has received a previous award or settlement under a workers' compensation act. The permanent medical impairment rating applicable to the previous injury to the same body part shall be deducted from the permanent medical impairment rating for the subsequent injury to the same body part. Thus, in order to obtain apportionment under this subsection, the employer must show (1) a previous injury to the same body part; and (2) an award or settlement under a workers' compensation act of Colorado or some other state.

Section 8-42-104(5)(b) allows for the reduction of a permanent medical impairment award based on a non-industrial medical impairment to the same body part, only where the previous non-work related injury has been (1) identified; (2) treated; and (3) at the time of the work-place injury was independently disabling. If all these factors apply, the non-work related medical impairment percentage existing at the time of the work injury may be subtracted from the medical impairment rating for the work-related injury by the percentage of the non-work related medical impairment. The classic example of a non-industrial medical impairment is a degenerative spine. In order to receive apportionment for degenerative conditions, the employer must show that, at the time of the industrial injury, the employee was in treatment for the condition and it was, to some degree, independently disabling. If the condition is asymptomatic, then employers will not be able to obtain apportionment for the degenerative or non-industrial condition.

Section 8-42-104(6) permits employers or insurers to seek reimbursement or contribution by other employers or insurers for benefits paid to or for an injured worker, as long as the claimant's benefits are not reduced or affected by such contribution or reimbursement.

The statute applies to injuries occurring on or after July 1, 2008.

If you would like to discuss the statutory changes, please feel free to contact me.

2008 Benefit Rates
Posted by: Steven Picardi
June 24, 2008
Topic: Picardi Web Log

The Division of Workers' Compensation has released the compensation rates for the 2008 fiscal year (July 1, 2008, through June 30, 2009). The new maximum rate for Temporary Total Disability benefits, Temporary Partial Disability benefits, Permanent Total Disability benefits and Death benefits for injuries occurring between July 1, 2008, through June 30, 2009 is $786.17. The maximum rate for Permanent Partial Disability benefits is $431.97. The scheduled rate is $247.42. The maximum payable for disfigurement is $4,174.00, and for "extensive facial or body scars, burn scars or stumps resulting from the loss of limbs" is $8,348.00. For a Desk Aid listing the yearly compensation rate for each year since 1980, click here.

Penalties for Late Payment
Posted by: Steven Picardi
June 16, 2008
Topic: Picardi Web Log

The Industrial Claim Appeals Office recently upheld an award of penalties of $200 per day for a 7-day late payment of a TTD check, in Twiss v. Advance America, W. C. No. 4-717-937 (June 11, 2008). The Director issued the penalty based  on a letter from Claimant complaining that the check for TTD benefits was late, which the Director considered a motion for penalties. The Director requested a response from the respondent, who admitted that the check was late, expressed remorse and indicated that remedial procedures had been established to prevent delays in payment in the future. The respondent also requested a hearing if the Director did not believe that the response was sufficient. The Director granted $200 per day in penalties for seven days, primarily because the respondent admitted it had violated the Act and previously had been penalized for "similar conduct" in the same claim.

What makes the decision important is that it shows the relatively-new Director will grant significant penalties without a hearing based on relatively minor misconduct, and that he will do so without granting a hearing. Therefore, adjusters should be very careful when responding to letters from the Director concerning penalties.

Prior Authorization required for home health care
Posted by: Steven Picardi
May 14, 2008
Topic: Picardi Web Log

In a recent case, the Industrial Claim Appeals Panel has determined that a request for home health care or essential services is subject to the Rule 16-9 requirement of prior authorization. In Galicia v. Pietraszek Enterprises, Inc., W. C. No. 4-610-668 (May 9, 2008), ICAO determined that claimant's obtained home health care services without a prescription. Several years later the authorized treating physician opined that the home health care was reasonable and necessary. ICAO determined that the claimant did not seek prior authorization of the request for home health care services pursuant to Rule 16-5(A)(2) (which requires any provider not listed as a "physician provider" to obtain prior authorization under Rule 16-9 in order to provide covered services). ICAO found that the failure to obtain prior authorization for the home health care was a fatal defect to the claim for benefits, and dismissed the claim for services which were incurred prior to a contemporaneous referral (the services rendered after a third hospital stay, where the surgeon wrote a prescription for home health care upon discharge from the hospital, were found reasonable and necessary).   

Increase in Lump Sum statute not retroactive
Posted by: Steven Picardi
May 07, 2008
Topic: Picardi Web Log

In a prior post I discussed the legislative changes found in Senate Bill 07-258, which included a provision increasing the lump sum amount to $60,000. The statute was silent on whether the increase applied retroactively, to claims with a date of injury before the effective date of July 1, 2007. As you probably know, the Director had interpreted the statutory amendment as a procedural change having retroactive effect, and granted lump sums up to $60,000 even when the statute in effect at the time of the injury limited the maximum lump sum to a lesser amount. The Industrial Claim Appeals Office recently reversed the Director's order in Nelson v. Specialty Restaurants Corp., W. C. No. 3-987-235 (May 2, 2008) (attached below), and denied the Director's award of a lump sum up to $60,000, as the statute in effect at the time of the injury did not permit lump sums in that amount. Since this case is so recent, it is not known whether Claimant will appeal the decision. Please keep this decision in mind if you receive a new Application for Lump Sum on your older cases.    

New Office Address
Posted by: Steven Picardi
March 31, 2008
Topic: Picardi Web Log

The Picardi Law Firm has moved! The new address is:

Law Office of Steven J. Picardi, P.C.
12900 Stroh Ranch Way, Suite 110
Parker, CO 80134-7401.
Phone, fax and e-mail remain the same: 
(303) 872-7461 - Local
(888) 781-0369 - Toll-free
(303) 778-8947 - Facsimile
steve@picardilawfirm.com - E-mail

Penalties for dictating medical care
Posted by: Steven Picardi
January 29, 2008
Topic: Picardi Web Log

Section 8-43-503(3) provides that employers and insurers "shall not dictate to any physician the type or duration of treatment..." The Industrial Claim Appeals Office just issued a very concerning opinion affirming the award of $14,000 in penalties against an employer for "dictating" medical care. Gianzero v. Wal-Mart Stores, Inc., W. C. No. 4-669-749 (December 10, 2007). 

Dr. Quick, the authorized treating physician, referred Claimant to a hand surgeon, Dr. Hart. Claimant sought a change of physician to Dr. Conyers, a different hand surgeon. The attorney for the employer denied the change of physician, but also indicated that Dr. Quick and Dr. Hart were capable of determining whether an additional referral was warranted. Dr. Quick then referred Claimant to Dr. Conyers. A case manager, through an intermediary at Conentra, then contacted Dr. Quick and asked Dr. Quick to provide the medical necessity of referring Claimant to Dr. Conyers. Dr. Quick then stated that he would "hold off" on the referral until his deposition in the matter, so the appointment with Dr. Conyers was "deferred" until after Dr. Quick's deposition. Following Dr. Quick's deposition, the adjuster authorized treatment with Dr. Conyers.

The Administrative Law Judge found that the insurer "used written directives at Concentra to attempt to dictate to the authorized treating physicians the type or duration of treatment" and "interfered with Dr. Quick's care of the claimant by requiring pre-authorization of Dr. Quick's referral of the claimant ... and then refusing to pre-authorize the referral" until after Dr. Quick's deposition. The ALJ found a pattern of attempts to dictate medical care by the insurer, and awarded penalties of $400 per day.

While the rationale for awarding penalties is questionable and probably is based on the particular facts of the case (since, from what I can tell from the decision, it was Dr. Quick's decision to place the referral "on hold", not a directive from the employer), this decision clearly indicates the danger of questioning the authorized treating provider's referrals. I would caution any insurer or self-insured employer to be careful when attempting to keep referrals limited to particular providers, as an ALJ may interpret those attempts as "directing" medical care.

If you would like to discuss this case in more detail, please feel free to contact me.

Rule 8 - Report to Division
Posted by: Steven Picardi
January 02, 2008
Topic: Picardi Web Log

The Division of Workers' Compensation has published a notice reminding all insurers, employers, and third-party administrators that they must track how often employees request a change of physician under Rule 8's automatic one-time change of physician provisions.

Rule 8 hidden trap - change of physician request form
Posted by: Steven Picardi
January 02, 2008
Topic: Picardi Web Log

As addressed in my previous post regarding Rule 8, Rule 8-5 permits the employee to request a one-time change of physician within ninety (90) days of the date of injury (but before reaching maximum medical improvement). The employee initiates the change of physician request by completing the form established by the Division (which is set forth below) designating another provider on the initial Designated Provider List. However, there is a hidden trap in this form which creates a significant danger to employers.Technically, a claimant could insert the name of any physician into the form. While this does not meet the statutory requirements of the form, the burden is on Respondent's Representative to provide written objection to the request, setting forth the basis for believing the notice does not meet the statutory requirements, within seven (7) business days. Rule 8-5 specifically provides if the Respondent's Representative does not timely challenge the form of the request for a one-time change, the request for a one-time change must be processed and the new authorized treating physician appointed as of the date of the first appointment. Thus, the rule effectively changes the previous 20-day period to object to a change of physician down to seven (7) business days. All Respondents' Representatives need to be aware of the potential for a claimant to insert a "rogue" physician on the form, and must timely object to the request to change to the rogue physician.

If you would like to discuss this issue or any other issue with me, please feel free to contact me.