Legislative Changes Include Changes in Third Party Recovery, Recoverable Costs, Investigation of Fraud, Access to Workplace Safety Records and Promulgation of Rules

The economic development bill that was recently passed by the Vermont Legislature contains a number of provisions that will change certain aspects of workers’ compensation claims administration.  A summary of those changes is located at: http://vtcompbulletin.blogspot.com/2014/05/new-laws-place-limits-on-ime-increase.html.

However, there are other changes as well. They include: Reimbursement to the employer/carrier from the claimant’s third party recovery; Recoverable costs at hearing or trial; Investigation of Fraud; Employee access to workplace safety records; and The Commissioner must adopt rules for prescription of opiods and for promoting cost effective, early, return to work programs.  Assuming the Governor signs the legislation, these changes will be effective July 1, 2014.

Reimbursement from Third Party Recovery:

The legislature has changed the way an employer and workers’ compensation insurance carrier is reimbursed for benefits paid under the Workers’ Compensation Act.  If, after deducting expenses of recovery, the recovery is less than the full value of the claim, the reimbursement to the employer shall be limited to that portion of the recovery allocated for damages covered by the Act.  If the Court has not allocated the recovery or the parties have not agreed to an allocation, then either party may request that the Commissioner make an administrative decision as to the allocation. When a request is made, mediation shall be ordered and, if unsuccessful, the Commissioner may make a determination or order arbitration on the matter.  See 21 VSA §624(e).

Recoverable Costs:

The legislature has now included deposition fees, subpoena fees and expert witness fees as recoverable costs for prevailing claimants.  See 21 VSA §678(a). 

Investigation of Fraud:

The statute contains a provision requiring that any claim of fraud first be investigated by the employer, or carrier and shall then be submitted in a written report to the Department.  Once received by the Department the worker shall have 30 days to respond in person or in writing.  The Department shall issue a determination on the allegation to which any party may appeal.  See 21 VSA §663b(a). An employee found to have committed fraud in order to receive workers’ compensation shall be ordered to repay the compensation fraudulently received in addition to any other penalties.  See 21 VSA §663b(b).  The Department has been mandated to study and report by January 2015 on the best practices to detect and deter workers’ compensation fraud.

Employee and Commissioner Access to Workplace Safety Records:

It has been mandated that an employer shall post a notice advising employees of where they may review the employer’s record of workplace safety in accordance with rules to be adopted by the Commissioner.  These records shall be reviewable by the employees and the Commissioner but shall not otherwise be publicly available.  See 21 VSA §691a.

Rules for Prescribing Opiods:

The Legislature, intending to protect employees from the dangers of prescription drug abuse, and the Commissioner, in consultation with other state departments, agencies and boards, has been charged with adopting rules consistent with best practices for prescribing opiods to employees who have suffered work related injuries. The rules will include patient screening, drug screening and claims adjudication.   See 21 VSA §640c(a)(b).

Rules for Cost Effective, Early, Return to Work Programs:

In an attempt to return an injured employee to work as soon as possible within any limitations, the Commissioner shall adopt rules promoting the implementation and development of cost effective, early, return to work programs.  See 21 VSA §641.

New Laws Place Limits on IME, Increase Amounts Paid for Burial and Funeral Expenses; Change Procedures for Discontinuances; and Requires Notice on Communications

The Vermont legislature has passed a bill with sections that will change certain aspects of workers’ compensation claims administration.  Assuming the Governor signs the legislation, the following changes go into effect July 1, 2014.

Below are summaries of four sections of the bill that will impact the handling of claims including: limitations on the employer’s ability to obtain a second opinion; increases to the maximum amounts paid for burial and funeral expenses in death claims; changes to the process for obtaining a discontinuance; and a requirement that contact with injured workers contain a statement regarding the ability to contact the Department of Labor.

Second Opinions:

The Legislature has limited the ability of an employer to have a medical provider conduct a second opinion with regards to a workers’ compensation claim.  Previously any exam performed at the request of the employer must be reasonable as to time and place.  With this legislation employers are limited to scheduling examinations within a two hour driving distance of the residence of the employee.  The Commissioner may permit an examination outside of the two hour driving radius if it is necessary to obtain the services of a provider that specializes in evaluation and treatment specific to the nature and extent of the employee’s injury.  See, 21 VSA §655.

Burial and Funeral Expenses:

The legislation increases the amount paid by employers for burial expenses when a work related injury results in death.  When death results from a work related injury the employer is responsible for paying the actual costs of burial and funeral expenses in an amount not to exceed $10,000 and the actual expenses for out of state transportation of the decedent to the place of burial in an amount not to exceed $5,000.  Previously an employer was to pay $5,500 for burial and funeral expenses and $1,000 for transportation.  Also, every two years the Commissioner is tasked with evaluating the average amount for burial and funeral expenses, and provide a recommendation to the Legislature as to whether an adjustment is warranted. See, 21 VSA §632. 

If a person has suffered a work injury and dies from some other cause while receiving disability or impairment benefits if the person does not have a dependent, then the employer is liable to pay the remaining amount due but no more than the actual burial and funeral expenses not to exceed $10,000.00 and the actual expenses for out-of-state transportation of the decedent to the place of burial not to exceed $5,000.00. See, 21 VSA §639.

Discontinuance of Benefits:

When an employer seeks to discontinue benefits the employer shall continue to give the employee seven days notice from receipt of the discontinuance before terminating the benefit.  However, new language has been added that “if the claimant disputes the discontinuance, the Claimant may file with the Commissioner an objection to the discontinuance and seek an extension of 14 days.  The objection to the discontinuance shall be specific as to the reasons and shall include supporting evidence.  A copy of the objection shall be provided to the employer at the time the request is made to the Commissioner.” The statute continues to provide that the payments are made without prejudice and may be deducted from any amounts due for impairment if the Commissioner approves the discontinuance.  See, 21 VSA §643a.  The statute has a sunset provision repealing it on July 1, 2018 and replacing it with statute that was in effect prior to this amendment. 

There is also a provision that the Commissioner assess the financial and administrative impacts of the provisions and provide the Legislature with a report in 2017 that addresses: whether the statutory provisions expedited the discontinuance process; whether the statutory provisions affected workers’ compensation rates; how many requests were received, acted on, the time required for action; whether there was an order for reinstatement of benefits; and any other matters deemed relevant by the Commissioner.  See, 21 VSA §654c.

Notice Required on Communications with Claimants:

A new provision requires that any communication from the employer or insurance carrier to the claimant that is not required to be on a form must include a statement advising the claimant that he or she should contact the Department of Labor’s Workers’ Compensation Division to determine any right to object or appeal, as provided by law and to seek information from the Department on process and procedures. See, 21 VSA §602.

Mileage To/From Work Deducted From Travel To/From Medical Appointments

The Vermont Department of Labor has reiterated that an employer/carrier is entitled to deduct mileage for the normal commute distance from the mileage to and from physician visits. Myrick v. Ormond Bushey and Sons, Op. No. 07-14 WC (April 25, 2014).

A worker who travels to receive medical treatment is entitled to mileage reimbursement for "mileage beyond the distance normally traveled to the workplace."  Id., (citing Workers' Compensation Rule, 12.21).  Such a rule denies reimbursement for regular commuting expenses but serves to "make the worker whole by providing compensation that he or she would not have incurred but for the work injury." Myrick v. Ormond Bushey and Sons, Op. No. 07-14 WC (April 25, 2014)(citing, Fosher v. Fletcher Allen Health Care, Op. No. 11-11 WC (May 5, 2011).  The deduction of mileage for the commute occurs whether the injured worker is employed or receiving temporary benefits at the time of the medical service.

Employer Not Required to Pay for Services Provided By Unlicensed Provider

The Vermont Department of Labor has ruled an employer/carrier is not responsible for paying for treatment provided by an unlicensed or uncertified provider if Vermont law requires that only a licensed or certified practitioner can provide a particular type of medical service.  Myrick v. Ormond Bushey and Sons, Op. No. 07-14 WC (April 25, 2014).

The workers' compensation statute requires the employer to pay for reasonable medical services caused by a work injury, provided they were "lawfully delivered medical services."  Id. (citing 21 V.S.A. §640). If a practitioner is not required to be licensed or certified to provide treatment under Vermont law, then the employer may be responsible for paying a charge for service.  V.O. Windsor Hospital, Op. No. 12-08 WC (March 27, 2008)(citing 21 V.S.A. §640(a)).

Additionally, the decision reaffirms that an employer is not obligated to to pay charges of a provider who fails to maintain treatment records or submit appropriately documented medical bills.  Myrick v. Ormond Bushey and Sons, Op. No. 07-14 WC (April 25, 2014).

Lent Employee Doctrine Revisited

The lent employee doctrine occurs when one employer, the general employer, lends an employee to another employer, the special employer. The presumption is that employment continues under the general employer and the general employer remains liable for injuries suffered by the employee. See Thorn v. Albany Ladder, Op. No. 17-02WC (Apr. 2, 2002) (citing 3 Larson’s Workers’ Compensation Law §67.03). This presumption may be overcome if there is “a clear demonstration that a new temporary employer has been substituted for the old.” Id. In order for the special employer to become liable: “[T]here must be a contract of hire, express or implied between the special employer and employee. . . . This involves an informed consent by the employee before the employment-relation can be said to exist. This requirement being met, there remains the necessity of showing that the work being done is essentially that of the special employer and lastly that such special employer has the right to control the details of the work.” Mercier v. Holmes, 119 Vt. 368, 375 (1956).

Vermont Senate Considers Workers' Compensation Bill

The Vermont House has passed H. 645 an act relating to workers’ compensation.  The legislation is now pending in the Vermont Senate where it is being considered in the Senate Finance Committee.

The Bill’s provisions include:

·         An increase the amount payable for funeral expenses from $5,500.00 to $10,000.00;

·         An increase in the amount payable for transportation of the decedent to the place of burial to $5,000.00;

·         An injured worker who disputes a discontinuance may file for an extension of the seven day waiting period extending the liability for payment for an additional seven days;

·         Only relevant evidence is to be filed with a discontinuance;

·         That the Commissioner adopt Rules governing prescription of opiods; and

·         That the Commissioner adopt Rules promoting development and implementation of cost-effective, early return-to- work programs.

The legislation is located at the following link:  http://www.leg.state.vt.us/database/status/summary.cfm?Bill=H%2E0645&Session=2014

Insurer Not Responsible For Paying Wages When Employee Misses Work to Attend Medical Appointment

The Department of Labor has ruled that a workers’ compensation insurance carrier has no obligation to pay wages to an employee when that employee misses work to attend a medical appointment for treatment of a work injury.  Hathaway v. Griswold, Op. No. 04-14WC (March 17, 2014).  The Act states that, “an employer shall not withhold wages from an employee for an employee’s absence from work for treatment of a work injury, or to attend a medical examination related to a work injury.” 21 V.S.A. § 640(c).  The Department has concluded that the term “employer” in this context does not include the insurance carrier as the statute confers on the carrier an obligation to pay “compensation,” or “benefits” and those terms are not synonymous with “wages”. Hathaway v. Griswold, Op. No. 04-14WC (March 17, 2014).

The Department has mandated that the current employer of a worker who has suffered a work injury not withhold the employee’s wages while attending a medical appointment for treatment of a work related injury.  Hathaway v. Griswold, Op. No. 04-14WC (March 17, 2014).  This is true whether the worker was injured at the current place of work, or at an earlier workplace.  The Department found a distinction in the Act between the use of the term “an employer” versus the term “the employer” concluding that the, “indefinite article “a” connotes a more general reference.” Hathaway v. Griswold, Op. No. 04-14WC (March 17, 2014); See, e.g., State Farm Fire & Casualty Co. v. Old Republic Insurance Co., 644 N.W. 2d 715,718 n.5 (Mich. 2002).  The Commissioner concluded the specific language was a choice by the Legislature of an intent to broaden the prohibition against wage withholding to encompass not only the employer where the injury occurred but any future employer. Hathaway v. Griswold, Op. No. 04-14WC (March 17, 2014).