The Involvement of Nurse Case Managers in Indiana Claims

When discussing medical benefits for work-related injuries in Indiana, it is often said that the employer is responsible for directing medical care for injured workers.  Members of the Indiana Worker’s Compensation Board are often quick to correct the common misconception that the employer “directs” medical care.  Instead, pursuant to Indiana Code 22-3-3-4, it is the responsibility of the employer to “furnish” an attending physician for the treatment of an employee’s work-related injuries.  The attending physician then directs the medical care.

To assist with furnishing medical care and adjusting their worker’s compensation claims, employers or their insurance carriers sometimes enlist the services of a nurse case manager (“NCM”).  Generally, a NCM should act as a liaison among the involved parties including the employee, employer/carrier, and medical provider.

The Indiana Worker’s Compensation Act does not contain specific provisions governing the involvement of nurse case managers in worker’s compensation claims.  However, by way of a written notice on its website, the Board has provided that:

A NCM may be involved in a claim to schedule appointments, help facilitate care suggested by the medical provider, and to report back to the employer and/or carrier.  However, a NCM should not express opinions, to either the injured worker or the medical provider, regarding an injured worker’s course of medical care or otherwise attempt to influence the process.  Additionally, a claims adjuster should not attempt to direct the care provided to an injured worker by the authorized treating doctor.

While NCMs often provide a useful tool for adjusting claims in Indiana, it is important for claims handlers and NCMs to be familiar with and to follow the guidelines set forth by the Board.  To that end, it is plainly apparent from the above guidelines that the role of the NCM should be limited to that of a facilitator or liaison and that any attempts to direct or influence an injured worker’s medical care may be in direct conflict with the Board’s guidelines.

The above guidelines were handed down by the Board quite some time ago; however, the involvement of NCMs in worker’s compensation claims continues to be a topic of discussion among attorneys and the Board.  Recently, it has been suggested that the Board is considering amending these guidelines.  Please continue to follow our blog for further updates on this topic and feel free to contact us to discuss this and any other topics involving worker’s compensation claims in Indiana.

Thanks to attorney Dane Kurth for this important summary.  Dane represents employers in both Illinois and Indiana on behalf of the firm.

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Iowa Supreme Court Reverses and Remands $25 Million WC Bad Faith Jury Award

In the case of Thornton vs. American Interstate Insurance Company, (May 19, 2017) the Iowa Supreme Court agreed that a workers compensation insurer had acted in bad faith as a matter of law in opposing an undisputed PTD claim at hearing, but disagreed that   its opposition to a partial commutation was also in bad faith.  The jury had  awarded  $25 million in punitive damages and $284,000 in compensatory damages.

The facts are complicated but important in order to understand the bad faith behavior claimed. In June 2009, the Employee was paralyzed below his chest, leaving him with no use of his left hand and limited use of his right hand, from a work related driving  accident. The insurance carrier’s conduct in addressing the claim included the following: The adjuster went to the hospital within two days, met with the family, and advised that  benefits would begin immediately. Two weeks after the accident the insurer received a medical opinion from Employee’s examining  physician that Employee was permanently and totally disabled (PTD). The carrier internally acknowledged and reserved his claim as PTD and began benefits that week. These benefits continued through trial. The Employee’s attorney requested wage documentation multiple times over two months, which was eventually provided, and which resulted in a $7 per week increase based on the new agreed wage.  When released from the hospital, the Employee moved into his in-laws’ home and the insurer arranged for modifications including installing a shower and hospital bed.  The insurer provided a wheelchair and van which was specially modified to the Employee’s height and weight.  In June of 2010, the carrier hired a home health care nurse so the Employee’s wife could return to work. Then, when the Employee separated from his wife and needed to move out, the carrier arranged for home health care and  modifications to his new apartment. The carrier also arranged for the Employee to take a disabled driver’s test.

In March 2011 the treating doctor opined that the Employee was at MMI. The carrier continued paying weekly benefits, assuming this was a PTD case. The insurer made two structured settlement proposals to Employee at that point (with Medicare Set-Aside provisions), but the Employee did not wish to discuss settlement until his divorce was finalized.  In May of 2012 , the Employee filed its Petition, alleging that he was PTD.  The carrier denied the PTD claim in its Answer.  In subsequent discovery, the Employee testified that he would like to get a job someday. Additionally, a vocational report was obtained by the Employer/Carrier in February of 2013 indicating that jobs may be available to the Employee.   Discovery further revealed that in March of 2013, defense counsel had met with the treating doctor regarding his opinion the the Employee was permanently and totally disabled, and, following that, the attorney reported that the treater was not going to be changing his PTD opinion.  He recommended that the carrier agree to settlement on a PTD basis, and warned that they may  face sanctions if they failed to do so. Nevertheless, the Employer/Carrier proceeded to hearing and contested the claim of a PTD, with the adjuster explaining that they felt they had at least the right to go to hearing. On May 23, 2013 the Deputy found the Employee to be permanently and totally disabled.

Shortly after the PTD award, the Employee filed a petition seeking partial commutation of the PTD award in a lump sum of $761,957 in order to buy a home, pay attorney’s fees,  and invest. The record demonstrated that the Defendants felt that although there was a good chance the Employee might be awarded the partial commutation, they also believed he was not  entitled to it.  As such, the Defendants resisted the petition. The Defendants offered evidence that the Employee had a history as a poor money manager.  They also presented experts who opined that commutation was not in his financial best interests and he did not have a sound game plan to protect or justify the lump sum commutation. The Employee presented his own experts who opined that the commutation was in his best interests if did not invade the principal. In May of 2014, the  Deputy granted partial commutation in a decision sharply critical of Defendants, and also awarded the costs of the Employee’s two experts.

Thereafter, the Employee filed a civil action for bad faith claims handling against the insurance carrier, alleging bad faith in disputing whether the Employee was PTD, and in contesting his petition for a partial commutation (lump-sum) award. 

The district court instructed the jury that the insurer, by contesting the PTD claim and commutation, had acted in bad faith as a matter of law by March 11, 2013 (nearly four years after the accident), and that the jury was to determine to what extent the carrier had acted in bad faith prior to that time. The jury then found the insurer had committed bad faith as of September 1, 2009, coinciding with its refusals to give wage information and its internal recognition of a PTD claim. The jury awarded $284,000 in compensatory damages and $25 million in punitive damages.

On appeal of that decision, the Supreme Court first agreed that the insurer knew or should have known it lacked any reasonable basis to dispute that the Employee was  permanently and totally disabled, and, therefore, held that portion of the jury instruction was not in error.

The Supreme Court then analyzed the issue of whether a workers’ compensation insurer that pays weekly benefits can still be found in bad faith. It rejected the insurer’s argument that since the insurance contract was not introduced into evidence, and since all PTD benefits were paid, bad faith could not be found due to no showing of a denial of a right  guaranteed  in the contract.  The Court explained that insurance contracts contain an implied covenant of good faith that neither party will do anything to injure the rights of the other in receiving the benefits of the agreement. The Court further stressed that the reason the tort of bad faith claims handling is recognized in Iowa is  because traditional damages for breach of contract will not always adequately compensate an insured for an insurer’s bad faith conduct.  The Court also noted that insurance policies are contracts of adhesion, with unequal bargaining power between the insurer and insured.  The Court explained that to establish a first-party bad-faith claim against a workers’ compensation insurer, the plaintiff must show: (1) that the insurer had no reasonable basis for denying benefits under the policy and, (2) the insurer knew, or had reason to know, that its denial was without basis.

The Court concluded that the workers’ compensation insurer unreasonably contested the Employee’s PTD status at hearing despite early opinions from a medical professional and its own claims adjuster that the Employee, a quadriplegic, was permanently and totally disabled.

However, the Court  did find that the lower court erred by instructing that the insurer was in bad faith as a matter of law for resisting the partial commutation.  The Court disagreed that settlement negotiations rather than immediate stipulation to PTD was  bad-faith conduct, explaining that negotiations can be mutually beneficial to both employees and insurers, and that all parties are entitled to engage in settlement negotiations.  Regarding resisting commutation, the Court explained that commutation is different than the payment of weekly benefits, which are commanded by statute.  Commutation is only appropriate if the Employee demonstrates that commutation is in his best interests and therefore involves a weighing by the Commissioner of the worker’s preference and the benefits to the worker of receiving a lump sum payment against the potential detriments that would result if the worker invested unwisely, spent foolishly, or otherwise wasted the funds.  The Court concluded the insurer was not in bad faith for resisting commutation because the Employee’s petition for commutation was fairly debatable on its facts due to omissions in his proposed budget, his past spending habits, and his lack of experience with investments.

The Court held that the district court erred by instructing the jury that the insurer acted in bad faith by opposing the Employee’s commutation. Therefore, the Court concluded that the trial was fatally tainted by the erroneous instruction.  As such, the Court remanded the matter for a new trial on liability and damages, although the separate instruction that the insurer acted in bad faith in opposing the PTD claim was upheld.

This case illustrates the many pitfalls potentially facing an insurance carrier when handling a  catastrophic claim of this nature, and the painstaking care which must be taken with every claims handling decision in order to demonstrate reasonableness and  compliance with  Iowa  workers compensation law.  Thanks to I&F Partner Terry Donohue for thus summary of this case.  Terry handles Iowa claims for the firm and works out of the Chicago and Des Moines offices of Inman and Fitzgibbons.  Please feel free contact Terry with any Iowa workers’ compensation questions.

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WI Appellate Decision Erodes Exclusive Remedy Protection for Employers

In Re the Estate of Carolos Esterly Cerrato Rivera v. West Bend Mutual Insurance Company (No. 2017AP142),  Carlos Rivera was employed by Alex Drywall. Alex Drywall provided him as a temporary worker to Alpine Insulation. Carlos Rivera was a passenger in an Alpine owned vehicle involved in an accident while traveling from one Alpine job site to another. Carlos Rivera was killed in the accident.  The driver employed by Alpine was found to have been negligent.

The estate of Carlos Rivera filed a wrongful death action against Alpine and its insurance carrier. Alpine was successful with a summary judgement motion, and the estate appealed.

The Court of Appeals determined that a temporary worker can opt not to make a workers’ compensation claim and bring a tort claim against a host employer. The court acknowledged that, pursuant to the Wisconsin Workers’ Compensation Act, a temporary worker “who makes a claim for compensation” cannot sue the employer who hosted him in tort.  However, the court found that not allowing a temporary worker to bring a tort claim where he or she decided to not bring a workers’ compensation claim would require it to ignore the phrase “who makes a claim for compensation” or read words into the statute.

Thus, for the time being, temporary workers in Wisconsin can now sue their host employers in tort. This decision erodes the  Wisconsin Worker’s Compensation Act’s exclusive remedy provision and  exposes employers in Wisconsin to tort liability that they previously did not have or anticipate having. An appeal to the Wisconsin Supreme Court is quite possible.

Thanks to Partner Scott McCain for this update.  Scott handles both Illinois and Wisconsin claim on behalf of the firm and works from the firm’s offices in those states.

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Wisconsin WC Advisory Council Recommends Medical Fee Schedule

The Wisconsin Worker’s Compensation Advisory Council, created to advise the DWD and the legislature on policy matters concerning worker’s compensation law, is recommending legislators create a medical fee schedule to reduce workers’ compensation medical costs, according to a news release from mid to late 2017.

Worker’s compensation medical costs are rising quickly in Wisconsin. According to Wisconsin Business Voice, costs in WI were 60 percent above average for injuries that required seven or more days off of work in 2014/15, the latest years studied, and 47 percent above average for all injuries, including those with less than seven days lost time. Moreover, according to Wisconsin Business Voice, if you take a three year average, medical costs in Wisconsin remained the highest in the nation at 39 percent above average; the overall amount spent on worker’s compensation medical bills in Wisconsin has more than doubled since 1994, from $314 million to $648 million in 2014.

Forty-four states have implemented a medical fee schedule to control worker’s compensation medical costs. It’s unclear whether it will gain traction in the Wisconsin Legislature.

Thanks to Partner Scott McCain for this news update.  Scott handles both Illinois and Wisconsin claim on behalf of the firm and works from the firm’s offices in those states.

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Indiana Court of Appeals Broadens the Definition of Earnings in Calculating the AWW

It is well settled in Indiana that worker’s compensation is meant to benefit employees and that the Indiana Worker’s Compensation Act should be construed liberally.  According to a recent opinion issued by the Indiana Court of Appeals, in Midwest Equipment & Supply, Co. v. Garwood, this liberal construction appears to be especially true as it relates to calculating average weekly wages in Indiana.

The main issue in the Garwood case was whether bonuses should be considered earnings for purposes of calculating the employee’s average weekly wage, a calculation that is critical in determining the amount of benefits an employee receives.  It was undisputed that the employee received two bonuses totaling $21,750.  The first bonus, in the amount of $1,750, was an individual performance-based bonus.  The employee also received a $20,000 profit sharing bonus that had nothing to do with the employee’s individual performance.  The Indiana Worker’s Compensation Board and the Court of Appeals agreed that both bonuses should be included as earnings in the average weekly wage calculation.

According to Section 22-3-6-1(d) of the Act, an employee’s “average weekly wage” is defined as “the earnings of the injured employee in the employment in which the employee was working at the time of the injury during the period of fifty-two (52) weeks immediately preceding the date of injury, divided by fifty-two (52).”  The Act does not define earnings, nor does it specifically address whether bonuses constitute earnings pursuant to the Act.  Since the Act is silent on this issue, the Court of Appeals liberally construed the Act in favor of the employee in this case.

In its analysis, the Court of Appeals rejected the employers’ argument that the bonuses should be excluded because they were not regulated by any formal agreement, they were entirely discretionary, and the profit sharing bonus was not based on the employee’s output or performance.  While these statements may have been accurate, the Court of Appeals rejected the employer’s arguments and found that both bonuses constituted earnings, even the $20,000 bonus that had nothing to do with the employee’s individual job performance.

Given that the Act was ambiguous on the issue of including bonuses as earnings, it is not surprising that the Court of Appeals resolved this issue in favor of the employee.  Unfortunately for the employer, had this injury occurred only a few months later, beyond the fifty-two week period, the bonus would not have been included in the employee’s average weekly wage.

Thanks to attorney Dane Kurth for this important case law update.  Dane represents employers in both Illinois and Indiana on behalf of the firm.

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Efforts to Increase Illinois Medical Fee Schedule Thwarted by the IWCC

Earlier this year, the Medical Fee Advisory Board to the Illinois Workers’ Compensation Commission passed a Motion (5-3) recommending that the IWCC increase certain medical CPT coded fees by 30%.  Section 8.2 of the Illinois Workers’ Compensation Act grants the IWCC authority to make changes in the Fee Schedule when there exists “a significant limitation on access to quality healthcare in either a specific field of healthcare services [defined by CPT codes] or a specific geographic limitation on access.”  The motion asked to increase E&M codes for Levels 3, 4, and 5 in all four state regions by 30%. None of those Section 8.2 reasons was delineated when or supported by the Board, which not ironically consists of three employee representatives and two medical representatives against three employer representatives on this issue.

On December 20, 2017, the Illinois Workers’ Compensation Commission in its scheduled meeting voted 5-4 against this Motion.  The reasoning on the part of the five Commissioners in striking this motion was on the grounds that it believes the Illinois Workers’ Compensation Commission does not have authority to simply increase (or decrease) the medical fee schedule, but that this is a task reserved for the legislature.  After all, it was a legislative action that was required to institute a 30% reduction in the fee scheduled back in 2011.  We agree with the decision of the Illinois Workers’ Compensation Commission.

Thanks to Partner G. Steven Murdock  for this important Illinois update. Steve works out of the Chicago and St. Louis offices of Inman and Fitzgibbons and chairs the Firm’s Legislative Watch Committee.

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Missouri Alert: Another Reason to Insure Your New Employee is Not Undocumented

The Missouri Division of Workers’ Compensation has recently issued a decision involving an illegal immigrant.  In this case, the 34-year old claimant with an 8th grade education fell off a ladder sustaining injuries to his legs, feet, ankles and back.  He was diagnosed with compression fractures requiring the daily use of narcotics to control this pain. He was also diagnosed with PTSD and depression related to the injury. The claimant was found to be at MMI and given permanent work restrictions of less than sedentary work. One of the doctors opined that the claimant was permanently and totally disabled.   A vocational expert also opined that the claimant was unemployable due to his work restrictions and the need to lie down to reduce his pain. The employer’s expert concluded that the claimant could work on a sedentary basis.

Evidence revealed that the employer had knowledge of the claimant’s questionable immigration status.  He was a not a new employee. He also had a questionable Social Security number and he was paid in cash.

The employer unsuccessfully argued that the claimant’s undocumented status and lack of proficiency in English were important reasons as to why the claimant could not find work.  The ALJ found the restrictions of having to lie down and take narcotics daily to be credible. Despite his illegal status, the ALJ awarded him permanent and total disability benefits as the State of Missouri does not have a statutory distinction regarding immigration status and entitlement to work place injuries.

While there have been debates on whether the risk of injury should fall on the undocumented workers or on the employers who hire them, there is no law prohibiting undocumented immigrants to be entitled to permanent total disability benefits.  In this case, the employer paid the claimant with cash and ended up having to pay lots of cash to this undocumented claimant. Sanchez-Rivera v. Jorge Calderon Construction Company. 

To avoid this costly situation, employers need to take necessary precautions to ensure that their employees are legal.  The price of hiring an undocumented worker can be quite high.

Thanks to attorney Jill Baker for summarizing this important new development in Missouri. Jill works out of the Chicago and St. Louis offices of Inman and Fitzgibbons and can be reached at jbaker@inmanfitzgibbons.com.

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I&F Presents at Illinois Chamber of Commerce

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I&F regularly presents to clients, insurers, TPAs and businesses on matters of interest including worker’s compensation law and related issues. Here I&F attorneys Lauren Waninski and Kristin Thomas share their experiences handling WC cases in Illinois with the Illinois Chamber of Commerce.

If this presentation or any other topic in WC interests you, please contact us to discuss how we can meet your association or company’s needs.  We are available to provide either live presentations or webinars on legal issues in any of the states we cover – Illinois, Wisconsin, Iowa, Indiana, Michigan, and Missouri.

 

 

Illinois Average Weekly Wage: You Don’t Owe What You Don’t Know

The Illinois Appellate Court recently affirmed a Commission Decision in favor of respondent on the issue of whether a claimant’s concurrent wages as a pastor should be included as part of his average weekly wage calculations, in Bagwell v. Illinois Workers’ Comp. Comm’n (Nestle USA, Inc. ), 2017 IL App (4th) 160407WC, 84 N.E.3d 1149, 1151.

On June 2, 2008, the claimant injured his low back at work while lifting a box of taffy off of the ground. He was diagnosed with an L4-L5 disc herniation that was confirmed by an MRI.  On September 2, 2008, the claimant underwent surgery for same. Thereafter, the claimant continued to complain of low back and leg pain, potentially related to his L5 nerve root.  The petitioner was awarded benefits but at issue in this case was what the appropriate average weekly wage for the claimant should be.  Specifically, the respondent disputed that his wages from being a pastor should be included in his average weekly wage.

The claimant served as the pastor of a Mt. Zion Missionary Baptist Church while he was working for the Respondent. He testified that he had been Mt. Zion’s pastor for 16 years.  He was serving as Mt. Zion’s pastor during the occurrence of the work accidents involved in this case, and he was still operating as a pastor at the time of trial.

The employer here was not disputing that they were not aware that the claimant actually operated as a pastor, however, they did not realize that he was actually paid for performing these services, and did not consider to be concurrent employment.  The key evidence on the issue actually came from the petitioner’s own testimony.

“When asked by his attorney whether his supervisors and employers at [the employer] knew that he was being paid for his job as a minister, the claimant responded:

“No, they didn’t know I was being paid, because my religious position had nothing to do with [the employer]. After I put in my eight hours at [the employer] that was all I owed to them. I didn’t owe them what else I was doing in my life. So, no, they didn’t know how much money I was making.”

The claimant confirmed this testimony on cross-examination during the following colloquy with the employer’s counsel:

“Q: In response to a question from your attorney today, you indicated that [the employer] wouldn’t have known what you were paid through the ministry because it was none of their business essentially or it was personal?

A: Yes, sir, because that was a side job, that wasn’t [the employer’s] concern, what I made.

Q: Okay. I just wanted to make sure I heard that correctly.

A: Yes, yes, sir.”

Id. ¶ 11

The Commission, now affirmed by the Appellate Court, found this to be substantial enough to find that the claimant’s wages from being a pastor should not be included in his average weekly wage for the purposes of benefit rates on the case.  The claimant argued that the employer should have known that he was being paid for being a pastor, but the Appellate Court disagreed, finding that, “Moreover, as noted above, the claimant admitted that he never told the employer that he was paid for performing religious services. It was therefore reasonable for the employer to assume that the claimant performed those services on a volunteer basis.”  Id.  ¶ 29

The Appellate Court went on to explain that it was not sufficient that the respondent merely knew that the claimant was performing the services of a pastor, but that the word “employment” necessarily requires that a respondent be aware that there was payment or wages for a particular activity.

Prevailing on an average weekly wage dispute can be complex, but keep in mind that in order for concurrent employment to be included for an average weekly wage, the respondent has be aware of not only what a claimant is doing but also has to have knowledge that the claimant is actually being paid for any other work done outside of employment with the respondent.  Be sure to stay tuned to the I&F blog for regular updates on the changes and clarifications in the law affecting average weekly wage issues throughout the Midwest!

Thanks to attorney Michael Bantz for the summary of this case.  Michael works out of the Champaign office of Inman and Fitzgibbons and can be reached at mbantz@inmanfitzgibbons.combbons.com.

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Michigan Board of Magistrates Dismisses Claim Based on Res Judicata

How many Applications can a claimant file in Michigan before he faces fines? In Michigan, an injured worker seeks benefits by filing an Application for Mediation or Hearing. This is known as Form WC-104A.

In Sheikh v. Pratt & Whitney AutoAir, Inc., the claimant filed his fifteenth application for mediation or hearing following a decision by the Workers’ Compensation Board of Magistrates that he had recovered from an injury he had sustained at work for the employer. The Commission affirmed the decision by the Board of Magistrates to dismiss the application because the claimant  described the same injury and claimed he had been looking for work. The claimant failed to allege that his condition had changed for the worse since the prior decision that he had recovered.

The claimant’s application that was dismissed included the same date of injury and nature of injury as provided in his previous applications. The claimant also claimed that he had been looking for but had not found a job.

The Board of Magistrates dismissed the case based on res judicata. Res judicata applies as this  matter had already been litigated.

The Commission agreed with the Board of Magistrates noting that the claimant had filed 16 applications in which he continued to allege the same date of injury and failed to allege any change of condition to the nature of the injury.  The Commission then cautioned the claimant he may be fined if he continues to file claims without pronouncing a change of condition to the nature of the injury or other relevant issue.

Thanks to I&F attorney Lauren Waninski for the summary of this interesting case.  Lauren handles cases in both Illinois and Michigan and practices out of the firm’s Chicago and Lansing offices.

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I&F Prevails as IL WC Arbitrator Finds that Routine Job Duties are Not Necessarily “Repetitive”

In a recent case before an arbitrator at the Illinois Workers’ Compensation Commission, Partner Steve Murdock prevailed in defense of an alleged claim for repetitive trauma, both on issues of accident and medical causal connection.  Claimant alleged that as a machine operator for more than two decades on a packaging line she frequently used her hands and wrists to handle packaging stock and packaging rejects daily.  Over time, she claimed to have developed symptoms of numbness and tingling in both hands and wrists, which was subsequently diagnosed as bilateral carpal tunnel syndrome.  Claimant’s treating physician performed bilateral carpal tunnel releases and released the claimant to return to work full-duty following same.

The employer’s independent medical examiner, noting that the claimant had underlying risk factors for the development of idiopathic carpal tunnel syndrome, reviewed the essential job functions analysis noting that the job duties were not those that are medically associated with the development of carpal tunnel syndrome and show a variety of tasks performed throughout the day breaking up any alleged repetition.  The treating surgeon provided a report with an equivocal statement on causation that the job duties “likely” contributed to her underlying idiopathic condition.  During the claimant’s testimony, she admitted that approximately half her day is simply spent watching the machine operate to see that it operates smoothly.

The arbitrator found that the job tasks and the timing in which they were performed varied enough in nature that there was no evidence of exposure to repetitive trauma in ruling that the claimant was not involved in an accident arising out of and in the course of her employment.  The arbitrator also found the causation opinion of the employer’s IME to be more convincing than that of the employee’s treating physician on that issue in finding no causal connection existed between the work duties and the bilateral CTS.

Congratulations to Partner G. Steven Murdock  and to our client on this victory, which was accomplished through diligent teamwork on the part of the employer, its third-party claims administrator and our office. Steve works out of the Chicago and St. Louis offices of Inman and Fitzgibbons and chairs the Firm’s Legislative Watch Committee.

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Wisconsin Court of Appeals hold Expert Medical Opinion from Unlicensed Doctor Admissible at Trial

Under Wisconsin law, a WKC-16-B certified practitioner’s report is admissible at trial as evidence of the diagnosis, necessity of the treatment, and cause and extent of the disability so long as the practitioner consents to and is available for cross examination . On November 8, 2017, the Court of Appeals (First District)  held that a WKC-16-B is admissible if it is certified by a doctor licensed in the State of Wisconsin, regardless of the doctor’s status at the time of the hearing. American Family Mutual Insurance Company and Preferred Metal Products v. Robert Haas and LIRC, ( Appeal No. 2017AP59).

Robert Haas was injured at work on March 1, 2001. This accident was accepted as compensable, as was an initial surgery. On January 26, 2015, the ALJ held a hearing regarding the nature and extent of Haas’ injury. In dispute was liability for three e subsequent surgeries that were performed by Dr. Cully White in 2011. Dr. White completed a WKC-16-B on both May 4, 2011, and October 3, 2013. In each WKC-16-B, Dr. White related the need for  the three disputed surgeries to the work injury.  At trial, the employer objected to the admission of Dr. White’s WKC-16-B forms, arguing that they were inadmissible because Dr. White was no longer licensed to practice medicine (Dr. White voluntary surrendered his license to practice medicine in December 2013).   The administrative law judge overruled the objection and allowed White’s 16-B reports into evidence and found White’s opinion more credible than the expert’s written report filed by the employer. The employer  appealed. LIRC upheld the decision of the administrative law judge, and the circuit court upheld the decision of LIRC.

The Court of Appeals affirmed the judgement of the LIRC, noting that Wisconsin law requires only that the doctor certifying the WKC-16-B consents to being subjected to cross-examination. It noted that the employer did not subpoena nor seek to cross-examine White, and  that there was no dispute that at the time White filed the 16-B reports, he was both licensed and practicing medicine. The Court found that the relevant time frame for matters contained in the 16-B reports is when  they were written, and that there was no evidence in the records that Dr. White did not consent to being cross examined or that he was unavailable at trial.  The Court did acknowledge that the lack of licensure and cause for same might be relevant to an opinion set forth in a WKC-16-B, but that this factgoes to weight, not admissibility.

In view of this decision, counsel for respondent would be well advised to assess the credentials and licensure status of a practitioner certifying a WKC-16-B well in advance of trial. For while lack of a license at the time of trial will not impact the admissibility of the WKC-16-B, the certifying doctor should be subpoenaed  so that he/she can be cross examined as to the cause for lack of a license in order to impact the weight of any opinion rendered.

Thanks to Partner Scott McCain for bringing this case to our attention.  Scott works out of the Chicago and Milwaukee offices of Inman and Fitzgibbons.  If you have any questions about workers’ compensation claims in Wisconsin , please feel free to reach out to Scott.

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Illinois Appellate Court Revisits the issues of Traveling Employees and Increased Risk

A recent Illinois appellate decision, Kenaga v. Village of Hoffman Estates, 2017 IL App (1st) 161859WC-U, is interesting as it not only touches on a hot-button topic in the Workers’ Compensation field, but also for the analysis of the various courts involved.

The claimant was a police officer for 24 years. As part of his duties, he was required to testify at the courthouse on his day off. He was compensated for his time in court, but not for the time spent traveling to and from the courthouse. He used his personal vehicle to get to the courthouse and parked in the municipal garage that was reserved for law enforcement officers. After appearing in court, the claimant descended a flight of stairs in the parking garage and missed a step. As a result, he grabbed the hand rail and felt an immediate pain in his right arm. He found to have suffered a complete tear of the distal bicep tendon.

An issue in this particular case was whether the claimant was a traveling employee. In Illinois, an employee is considered a traveling employee if his job duties require travel away from the employer’s premises. According to the decision in *this* case, if the petitioner is considered a traveling employee, then any act the employee is directed to perform by the employer, any action the employee has a common-law duty to perform, and any act that the employee can reasonably be expected to perform are all compensable. The Arbitrator concluded that the claimant fell into this classification, both in terms of his ordinary duties and the specific tasks that he was performing for the respondent at the time of the accident. The case was appealed to the Commission, who reversed, finding that the fall down the stairs was the result of a neutral risk and there was no evidence of a defect. The Commission did not address whether the claimant was a traveling employee. The Circuit Court affirmed the decision of the Commission, applying a similar analysis.

The Appellate Court reversed the Commission and Circuit Court decisions. It noted that the undisputed facts established that the claimant qualified as a traveling employee at the time of the injury. It first noted the general rule that an employee traveling to or from work is generally not within the scope of employment. However, it stated that an exception exists where an employer causes (or requires) its employee to travel away from a regular work place. The duties of a police officer, particularly within these facts, fall under this exception. As such, it found that his conduct was both reasonable and foreseeable to the respondent, stating that “we have little trouble concluding that traversing a flight of stairs between the place the claimant was performing his work-related duties and the place designated for him to park while performing those duties was both reasonable and foreseeable. The case was remanded to the Commission for further proceedings to determine what benefits the claimant was entitled.

This case is interesting for a couple of reasons. Initially, there were multiple layers that reviewed these facts (Arbitrator, 3 Commissioners, Circuit Court Judge, and 5 Appellate Court Justices) Of those that reviewed this case, 4 (3 members of the Commission and the Circuit Court Judge) did not mention nor analyze this issue under the traveling employee doctrine, while 6 opined that this claim clearly involved a traveling employee. The take away is that the traveling employee doctrine is a complex issue and even the experts are in disagreement as to whether to apply this standard, let alone the actual analysis of the standard.

As to the actual analysis, in this case, the Appellate Court explicitly stated that a risk analysis is not necessary under the traveling employee doctrine, a position that is squarely at odds with prior Illinois Appellate Court decisions on similar issues, namely the recent case of Nee v. Illinois Workers’ Compensation Comm’n, 2015 IL App (1st) 132609WC, where the necessity for a risk analysis was discussed at length.  As is evident here, this issue is nowhere near resolved, though it should be pointed out that Nee was a published decision, whereas the instant case was not and, thus, cannot be cited as precedent.

Stay with us as we continue to monitor the developments of the traveling employee doctrine on this blog.

Thanks to attorney Frank Johnston for providing the above summary and analysis.  Frank practices out of I&F’s Champaign office and is a member of the I&F Legislative Watch Group .

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I&F Presents at 10th Annual Illinois Chamber of Commerce Workers’ Compensation and Safety Conference

Inman & Fitzgibbons attorneys Terry Donohue and Allison Mecher recently presented on the topic of Lost Time Benefits at the 10th Annual Illinois Chamber of Commerce Workers’ Compensation and Safety Conference. In this presentation, they discussed the basics of temporary total and temporary partial disability benefits, the current case law governing TTD/TPD, and common situations that arise involving payment of TTD/TPD and how to handle those situations from a defense standpoint.

If this presentation or any other topic in WC interests you, please contact us to discuss how we can meet your association or company’s needs.  We are available to provide either live presentations or webinars on legal issues in any of the states we cover – Illinois, Wisconsin, Iowa, Indiana, Michigan, and Missouri.

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What’s Happening with Illinois’ Medical Marijuana Experiment?

In late 2014 and early 2015 we first began reporting on Illinois’ Compassionate Use of Medical Cannabis Pilot Program Act. Now that this Act has been in effect since January 1, 2015 and with the national uptick on the legalization of cannabis, both medicinally and recreationally, we thought it time for an update on where Illinois stands and where it is going.

For some background, you may recall that this legislation was passed as a “pilot” program, which means it has an expiration date.  Initially set to expire on January 1, 2018, this was extended to July 1, 2020 simply because the program really did not get up and running until the early part of 2016 because of all of the regulations that had to be put in place and then the licenses that had to be approved for the growers, transporters and dispensaries. The Act allows for persons called “qualified registered patients” (QRP’s) with one or more of several qualifying conditions (which you can find at http://www.dph.illinois.gov/) to be authorized for the use of limited quantities of medicinal marijuana, which in turn can only be obtained from a limited number of dispensaries and only by prescription from a physician specifically licensed by the State to prescribe cannabis.  It is a heavily regulated system with a limited number of regional growers, distributors and dispensaries throughout the State.  Meanwhile, cannabis remains a Schedule 1 controlled substance under Federal law.  This means that all cannabis must be purchased and consumed within the State of Illinois. Under the Act, Employees who become qualified registered patients are not required to inform Employers of this, but if a QRP Employee tests positive for THC (the primary ingredient in cannabis) in a post-accident or random drug test for a “zero tolerance” Employer, the Employer’s drug policy is not restricted from terminating that employee simply because she is a QRP.  The Employer, however, if it learns of the QRP status of the Employee is not allowed to discriminate against that employee simply because of her QRP status. There are many more details and exceptions, but that is the Act in a nutshell.

So what’s new?  We predicted back in 2015 that within the next five years, we should not be surprised to see Illinois follow the path of states such as Colorado and Washington in legalizing the use of cannabis for recreation.  We are two plus years down the road, and the discussions have already begun fueled by an increasing number of other states (California, Nevada, Maine, Massachusetts, Oregon and Alaska) having legalized recreational use of cannabis and at least six more states likely to do so within the next year. The tax revenue reported in Washington and Colorado is enticing for any state in a debt crisis like it’s never seen before. While the federal government within the past couple of months refused to declassify cannabis as a Schedule 1 Controlled Substance (which makes the use, sale and transport of cannabis anywhere within the U.S. illegal), Washington D.C. also joined the ranks of the eight states that have now legalized the recreational use of cannabis.  Ironic isn’t it that those that have decided not to declassify cannabis can actually light up a joint at their homes in our country’s capitol?

The U.S. Attorney General’s Office has issued a memorandum that allows the Federal Controlled Substance Act and the states’ cannabis acts to co-exist stating that it will not seek to prosecute those persons within the states where the use of cannabis has been legalized, either medicinally or recreationally.  This does not mean it allows those residents to transport the goods across state lines or use cannabis in states where it is not legalized. That is still strictly forbidden.  Bottom line, stay within the state where it is legalized and follow the rules for that state, and we (the feds) will not bother you.

Illinois has introduced legislation (HB 2353 and SB 316), but not spoken seriously at this point, about legalizing recreational cannabis. The legislation did receive committee hearings, but was rather summarily tabled this year.  That said, the light is clearly turned on and there is discussion with some saying it could very well happen in 2018.

Bur for now, let’s start with the decriminalization of marijuana in Illinois in July 2016.  Although not mainstream news, in July 2016 Governor Rauner signed into law a bill that reduced punishment for individuals that possess up to 10 grams of marijuana to fines of $100 to $200.  Local governments can add other penalties as they choose, but state laws which would have previously treated such possession as a class B misdemeanor with up to six months in jail and fines of up to $1,500 have been removed.  Additionally, the state will expunge records of these fines every six months, automatically.  And, in addition to the possession, the law changed the DWI requirement from the presence of “any amount” of THC in driver thought to be intoxicated to require the presence of 5 nanograms of THC in the blood for a DWI conviction. Mind you, the possession of cannabis for anyone aside from the QRP’s and their registered caregivers in Illinois is still currently illegal, but this reduction in the illegality of it is a second step.

But what about the medical program?  Where is that at, and how is it working?  You can follow this program, including current updates and whether any new conditions are added to the list (PTSD was just recently approved to be on this list) at the website for Illinois Compassionate Use of Medical Cannabis Pilot Program Act found here: https://www.illinois.gov/gov/mcpp/Pages/default.aspx.  You will find the following reported as of October 4, 2017:  Retail sales in August 2017 alone totaled $7,765,672.87 (yes, that is millions of dollars) serving 15,650 patients who purchased a total of 390,553 grams of dry cannabis.  There are currently 53 licensed dispensaries in Illinois serving those 15,650 current QRP’s, and total retail sales from November 2015 through September 30, 2017 from those dispensaries is $96,348,861.29.  30,000 applications for QRP status have been filed since November 2015.

Where are we going?  Illinois currently collects 7% tax revenue on the wholesale of medical cannabis, which according to the link above has been $55,825,656.71 since November 2015.  That is a total tax revenue in two years of $3,907,795.97 from a total of 15,650 people.  The population of Illinois as of July 2016 was 12.8 million, approximately 23% of which are under the age of 18. So if we conservatively estimate 65% of the population is over 21 (the age used as the legal age for use of recreational cannabis) and then assume 30% of that population decides to use recreational cannabis regularly, we could see 15,650 purchasers increase to 2.5 million purchasers.  Perhaps more than would actually use cannabis recreationally, but you get the idea.  A State in a budget crisis looking for more revenue . . .   We will hold to our prediction that by 2020, Illinois may very well join the ranks of other states legalizing the use of recreational cannabis.

Finally, we are seeing courts in other states find in favor of injured employees that medicinal marijuana is a “reasonable and necessary” medication for treatment of work injuries and ruling that the insurance company, third-party claims administrator or employer must reimburse the employee for money spent to pay for this.  Because, again, the federal government does not condone the use of cannabis, federally regulated banks and insurance companies are having a hard time with this because it essentially means that these federal institutions could be considered laundering money for an illegal drug trade.  Hmm. Regardless, the state courts in Maine, Connecticut and New Jersey have recently ruled that under their state laws the employer is liable for the payment of the costs for legally prescribed medicinal cannabis, and we do not see that this will be viewed any differently in any of the other states.  Now how those payors work out the payment for this is another matter, but for the time being it will most likely be a reimbursement to the employee, who in most all cases is paying cash at the dispensaries for those medications.

This is still developing law across the country, and we encourage an open dialogue and further investigation into the merits, or lack thereof, of medicinal cannabis as well as a discussion into whether it should be declassified by the federal government as a Category 1 Controlled Substance.  We will continue to follow these developments and keep our readers informed of any cases in Illinois that address medicinal cannabis.

Thanks to Partner G. Steven Murdock for the summary of these new developments.  Steve works out of the Chicago and St. Louis offices of Inman and Fitzgibbons and chairs the Firm’s Legislative Watch Committee. .

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Illinois Gov. Rauner’s Veto of “WC Reform Bills” Sustained by Override Vote

illinoishousechamberDuring the veto session yesterday in Springfield, the Governor’s veto of HB 2622 was sustained by a vote of 65-50-1. This bill would have establish a statewide workers compensation insurance company.  Governor Rauner also vetoed a Democratic  sponsored “workers’ compensation reform bill,” HB 2525.  This has not yet been called for a vote to override the veto, but we expect this to be called during the current session.  We will continue to monitor these activities, and keep our readers posted.

Illinois Update: *Petitioners* also Required to Provide Treating Records More Than 48 Hours Prior to Hearing

Most Workers’ Compensation practitioners and claims handlers from Illinois are aware of the fact that the Illinois Workers’ Compensation Act (IWCA) requires the Respondent to provide all of the reports from an IME expert more than 48 hours before the deposition of that IME expert or a trial, but it is a lesser known fact that Petitioners and their attorneys also have a duty to provide all of the treating records more than 48 before a trial.

The last paragraph of Section 12 of the IWCA states that, “in all cases where the examination is made by a surgeon engaged by the injured employee…it shall be the duty of the surgeon making the examination at the instance of the employee, to deliver to the employer, or his representative, a statement in writing of the condition and extent of the injury…said copy to be furnished the employer, or his representative, as soon as practicable but not more than 48 hours before the time the case is set for hearing… If such surgeon refuses to furnish the employer with such statement to the same extent as that furnished the employee, said surgeon shall not be permitted to testify at the hearing next following said examination.”

The language in section 12 states that the surgeon must themselves be providing the records to the Respondent, however, in practice it is the Petitioner that would realistically be supplying the records.  In a similar fashion, it is usually the Respondent that supplies the reports from an IME expert more than 48 hours prior to the deposition.

It is also important to note that while the language used in that paragraph of section 12 states that the Petitioner’s treating surgeon shall not be permitted to testify at the next hearing after an examination, the Commission has interpreted this to also mean that such a surgeon’s treating records would also not be admissible in these circumstances.

In Connie Love, Petitioner v. Rgis Inventory, Respondent, 15 IL. W.C. 013194 (Ill. Indus. Com’n Apr. 8, 2016), that is exactly what the Commission ruled.  The Petitioner attempted to admit records into evidence that were not disclosed to the Respondent more than 48 hours prior to trial.  Respondent objected to same and that Arbitrator allowed the records into evidence, but was then overruled by the Commission on this issue.  The Commission cited Section 12 and referred to the Respondent’s citations of Ghere v. Indus. Comm’n, 278 Ill. App. 3d 840, 663 N.E.2d 1046 (4th Dist. 1996) and Mulligan v. Illinois Workers’ Comp. Comm’n, 408 Ill. App. 3d 205, 946 N.E.2d 421 (1st Dist. 2011).  Factually, the Commission also noted that it did not matter that Respondent was “fully aware” of who the Petitioner’s treating physicians were and noted that the “Petitioner was seen on the eve of the commencement of the arbitration hearing…”

Interpreting Section 12 to require that Petitioners must provide treating records prior to a deposition or hearing is also supported by the famous Appellate Court case, Ghere v. Indus. Comm’n, 278 Ill. App. 3d 840, 845, 663 N.E.2d 1046, 1050 (4th Dist. 1996), in which the Court stated, “We believe the purpose of section 12 would be frustrated if we read section 12 to only apply to examining physicians. It seems to us from the language of section 12 that the purpose of having the employee’s physician send a copy of his records to the employer no later than 48 hours prior to the arbitration hearing is to prevent the employee from springing surprise medical testimony on the employer. Cf., Cook v. Optimum/Ideal Managers Inc., 130 Ill.App.3d 180, 188, 84 Ill.Dec. 933, 939, 473 N.E.2d 334, 340 (1984). With this purpose in mind, we see no justification in limiting section 12 of the Act to examining doctors and we now so hold.”

It is crucial to protect the rights of Respondents in any trial setting, and keep in mind that Petitioners are not allowed to surprise the Respondent with records that are not provided until the time of hearing.  For more practice tips and pointers, stay tuned to the I&F blog!

Thanks to attorney Michael Bantz for the summary of this very important element of the practice.  Michael works out of the Champaign office of Inman and Fitzgibbons and can be reached at mbantz@inmanfitzgibbons.combbons.com.

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Recent Indiana Slip & Fall Claim Expands the Definition of “Neutral Risk”

In a recent Indiana Court of Appeals case, McBride v. Midwest Estate Buyers, LLC, the Court delved into whether an employee’s slip and fall resulted in an injury that “arose out of” her employment.  In this case, the claimant was employed at a jewelry store and liked to wear nice, stylish clothing to work.  On the date of the incident, the claimant was wearing boots with zippers on the inside of the leg.  As she stood to greet a customer, the zippers hooked together causing her to fall and break her leg.

Compensable WC claim?

In Indiana, an injury arises out of one’s employment if a reasonably prudent person would consider the injury to have been born out of a risk incidental to the employment.  Indiana courts place risks incidental to employment into three categories: (1) employment risks, (2) personal risks, and, (3) risks neither distinctly employment nor distinctly personal in nature (i.e., neutral risks).

The compensability determination is different depending on the category of the risk.  Naturally, injuries resulting from employment risks are compensable.  On the other hand, injuries resulting from risks distinctly personal in nature are not compensable.  What about risks that lie somewhere in between – risks containing both elements of employment and personal risks?  These risks falling within the third category, neutral risks, are compensable in Indiana.

In the McBride case, the employer denied the claim because the claimant’s fall and injuries resulted from a personal risk, which is not compensable.  At trial, the Single Member and the Board agreed with the employer.  The Board relied on the fact that the claimant fell because of her boots.  The same boots that she selected and purchased on her own, that she chose to wear on the date of the incident, and that she was not required to wear.  The Court of Appeals reversed the Board’s decision.

Surprisingly, the Court of Appeals acknowledged that the claimant’s injuries were the result of her personal choice of attire.  Based on this acknowledgement, one would have expected the Court of Appeals to categorize this as a personal risk.  The Court then took its analysis a step further.  The Court of Appeals also determined that the claimant dressed up to look stylish at work when she interacted with customers.  Accordingly, the Court concluded that the claimant’s injuries stemmed from a risk that was “neither distinctly employment related nor distinctly personal in character,” a neutral risk.  Therefore, the claimant’s injuries were deemed compensable.

It should be noted that the McBride case does not change the standard by which categories of risks are analyzed in Indiana.  While the risk analysis remains the same, this decision seems to broaden the definition of what constitutes a neutral risk.  In this case, the Court of Appeals seemed to go to great lengths to find that there was some element of risk beyond the obvious personal risk.  The unfortunate result for employers is that more claims involving slip and fall injuries may be deemed compensable if the Board follows the precedent established by the Court of Appeals in this case.

Thanks to attorney Dane Kurth for this important case law update.  Dane covers both Illinois and Indiana for the firm.

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Understanding Medicare’s Secondary Payer Private Cause of Action against Primary Payers

As a “secondary payer,” Medicare has an interest in any workers’ compensation claims where it may have paid for medical care that might be related to the workers’ compensation injury. Medicare calls payments it makes to a Medicare beneficiary “conditional payments.” The condition is that Medicare will seek reimbursement for the payments made if it turns out that a “primary payer,” such as a workers’ compensation insurer, should have paid for the treatment, pursuant to 42 USC 1395y(b)(2)(B).

The Third Circuit and Eleventh Circuit Courts have established that Medicare has a right to recover double damages through a Medicare Secondary Payer private cause of action against primary payers for failure to timely reimburse the conditional payments, pursuant to 42 USC 1395y(b)(3)(A). This cause of action is ripe and actionable 60 days after the settlement check is issued.

Thus, it is imperative that whenever a petitioner in a workers’ compensation claim is Medicare-eligible or likely Medicare-eligible, the insurer or TPA complete a “Conditional Payments Check” as soon as practicable in order to reveal any payments made by Medicare that might be related to the claim. If the search reveals that such payments were made, the parties will need to account for any reimbursement to Medicare for the bills it paid prior to settlement of the claim. If this process is not completed and reimbursement is not made within 60 days of the issuance of the settlement check, there is a risk that Medicare will seek to recover double damages through the Medicare Secondary Payer Act private cause of action.

We will continue to monitor the development of case law in this area as the courts rule on the boundaries of this cause of action, including what entities or individuals this cause of action can be brought against.

Thanks to attorney Allison Mecher for the excellent summary of this important issue.  Allison works out of the Chicago offices of I&F and joined the firm after working at the Social Security Administration, Office of Disability Adjudication and Review,

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Wisconsin Supreme Court Ruling a Win for Employers in Cases with Documented Pre-Existing Degenerative Conditions prior to Surgery

The decision of the Wisconsin Supreme Court in Flug v. LIRC, 2017 WI 72 (decided on June 30, 2017), is a clear win for the employer side in cases involving pre-existing degenerative conditions that lead to surgery.

In Flug, a retail store supervisor was changing merchandise prices with the use of a hand-held scanner when she experienced pain in her neck radiating down her right arm. The respondent accepted compensability at the start and paid for medical expenses and TTD.

The petitioner ultimately underwent a discectomy in the cervical spine. Her post-surgical disability rating was rated at 22% body as a whole.

After surgery, the respondent obtained an IME. The IME physician opined that the work accident caused only a temporary neck strain, and not the need for surgery and its resulting permanent disability. Diagnostic testing prior to surgery had revealed pre-existing degenerative arthritis in the cervical spine.

The ALJ, LIRC, and Circuit Court ruled in favor of the employer. The Wisconsin Court of Appeals remanded the case to the LIRC to assess whether the petitioner undertook surgery in good faith.

The Wisconsin Supreme Court held that “[b]ecause Ms. Flug’s surgery treated her pre-existing condition, not her compensable injury, her claim must be disallowed.”  The majority further held that “. . . an employee is not eligible for benefits under Wis. Stat. § 102.42(1m) if the disability-causing treatment was directed at treating something other than the employee’s compensable injury.”

This case highlights the importance for employers to seek post-surgical IMEs in cases involving documented pre-existing arthritis prior to surgery. Thanks to Partner Scott McCain for bringing this study to our attention.  Scott works out of the Chicago and Milwaukee offices of Inman and Fitzgibbons.  If you have any questions about workers’ compensation claims in Wisconsin , please feel free to reach out to Scott.

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