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Paying It Twice

Imagine a conversation in a restaurant between a customer who orders a three-course meal and the waiter, who brings the customer a bill after the first course.  “But I have not even finished dinner yet?” objects the customer.  The waiter responds, “you misunderstand, this bill is just for the procedure.  We had several cooks working on this meal.” At the end of the meal, the waiter then brings a second bill to the table, announcing “now this is the bill for your food.”

But isn’t that paying it twice! One might say that this hypothetical sounds absurd. Yet isn’t this what happens all the time in negotiations regarding awards for permanent partial disability benefits?   The employer is presented with a large medical bill from the surgeon for a low back fusion surgery early in the case, perhaps over $100,000. The carrier, third party administrator or employer then pays the medical bill.  Two years later, when permanency settlement negotiations ensue, the petitioner’s counsel tells the judge, “My demand is 40% permanent partial disability because this was a two-level fusion.”  That will mean a payment of about $145,000.  The response should be, “so what  – my client already paid that bill.”

Valuing a case for permanency based on the medical diagnosis or based on surgery having been performed is simply paying it twice.  The argument — “this was a two level fusion” is legally irrelevant.  The Supreme Court of New Jersey said in Perez v. Pantasote, 95 N.J. 105 (1984) that to obtain a permanent partial disability award, the employee must show proof of a lessening to a material degree of working ability.  Alternatively, the Court said, “Another criterion that may be considered in determining whether the injury is significant enough to merit compensation is whether the injury substantially interferes with other, nonwork-related aspects of the petitioner’s life.” In other words, an award must be based on factual evidence offered by the petitioner that this accident produced significant changes in work or in non-work activities.  Usually, people are back to work doing the same job at the time of settlement, so the focus shifts to the impact on non-work aspects of life.

Our Supreme Court has spoken clearly, yet how many times have we heard this same argument: “This case is worth more because there was a surgery two years ago to the shoulder,” or “this surgery was open and not arthroscopic.”   These arguments are red herrings: they do not address the legal test above. When it comes to awarding permanency, the focus should never be on the type of surgery that took place two years ago but rather on the present functional loss, if any,  of the injured worker.   Every case is different.  Some spine surgeries produce tremendous recovery for patients; some do not.  I know many people who have undergone fusion surgery and it has eliminated their pain and restored their function to pre-injury status.  Such a person would not be entitled to a substantial award of permanency. Others find that surgery failed, and at the time of settlement they have major life changes.  

So why is there so little attention paid to the words of our Supreme Court?  One reason is that practitioners were wrongly taught to value cases based on the type of surgery, operated or unoperated, open or arthroscopic. Prior to the Perez decision, that’s how workers’ compensation worked.  There were literally charts that practitioners used valuing cases based on diagnosis and surgery with operated surgeries being valued higher than unoperated surgeries – as if having a surgery meant one would have more changes in one’s life!  These myths continue until today.   Another reason for the tendency to compensate people for diagnoses as opposed to functional changes is that many of the doctors who do permanency examinations do not understand what the law requires.  Most of the IME reports we all read are just regurgitations of medical records that lawyers and adjusters already have read and have sent to the IME doctors.  This happens on both sides of the fence.  Many doctors do not ask anything about pre-accident level of function and post-accident level of function.  Some use meaningless canned phrases in every single report like “cold and damp weather aggravate discomfort.”

What should practitioners and judges be focusing on?  In a word, the facts.   Was the employee a weightlifter but now cannot lift weights? Did the employee have to quit his or her job because it was too physical in favor of a lower paying job?  Can the employee no longer enjoy his or her avocation of swimming because of a shoulder injury? Is the employee doing his or her job without any limitations and taking more overtime than before?  Was the employee doing well enough to add a second job?  Does the injured worker with a knee and shoulder injury now regularly go hiking and bowl in a league? These are the kinds of legal and factual considerations that drive the value of cases up or down for permanency purposes  — not whether there was or was not a surgery and not what the diagnosis was.

I would suggest to every practitioner that one should read the permanency exams closely.  Employers are required to pay only for proof of functional loss, which is proven not by operative records from 18 months ago but by current facts and sometimes current testimony.  What the medical records add is context:  if someone says he can no longer run but the injury is carpal tunnel syndrome, that assertion would make no sense.  But if the injury were a foot fracture, that would make sense.  Having a medical impairment may mean nothing at all, even if an MRI backs it up.  I have a lateral meniscal tear in my knee.  If it were from a work injury, I could present the MRI evidence of the tear, but I would not get a permanent partial disability award in New Jersey because I run at least four days a week.  The tear has not caused any change whatsoever in my life other than occasional pain. 

Arguing that a case is worth 30% because the petitioner had a rotator cuff tear and that’s what rotator cuff tears are worth is a gross misunderstanding of New Jersey law.  The equivalent would be a student demanding admission to Cornell University right after he took the SAT test because he took an expensive SAT prep course and everyone in his class who took that course has always been accepted.  The Cornell University Admissions Department will surely decline admission until it sees the results of the SAT test.   IME physicians must ask the relevant questions about the impact of the injury on one’s life.  Nothing is more important than that in the examination.  The obligation of the employee is to provide information about significant life changes caused by the accident.  In some cases, the employer may contest the allegations.  If an employee says he or she cannot run anymore because of the accident, the employer can offer evidence that the same employee recently ran several 5k races.      

Under the Perez case, objective evidence of an impairment is still required, like a positive MRI, but that is not enough to get a permanency award.  For an award of permanent partial disability, the focus must always be on proof of loss of function at work or at home at the time of the settlement.  Regardless of the type of surgery that took place and regardless of what the MRI showed,  if the employee is functioning well at the time of settlement and there are minimal life changes, then the award must be correspondingly low.  

There has never been any legal support for the argument that every fusion surgery is worth over 30% or every rotator cuff tear is worth 30%. These are myths that have cost New Jersey employers tens of millions of dollars over the years.  We do not compensate medical records:  we compensate real live people.  Every person is different: some people have great results with minimal life changes after surgery, physical therapy and pain medicine treatment and should receive much lower awards than those who have major life changes from an accident that continue to affect them negatively at the time of settlement.

The post Paying It Twice appeared first on NJ Workers' Comp Blog.

Notable Win: Complete Dismissal of Claim for Dependency Benefits

Client: A national insurer

Court: Workers’ Compensation

Trial Attorney: Prudence Higbee, Esq. 

Brief Attorney: Prudence Higbee, Esq. and Jaclyn Terranova, Esq.

**Results may vary depending on your particular facts and legal circumstances**

Matter Caption: Schonewolf v. South Jersey Bakery

Following a trial that included the testimony of two factual witnesses and three medical experts Judge French granted a complete dismissal of a claim for dependency benefits.  On October 11, 2017, the decedent rolled his ankle while climbing off of a forklift.  Three days later he passed away. The diagnosis at the time of death included severe sepsis, community acquired pneumonia and cardiac arrest.  The petitioner demanded lifetime dependency benefits totaling more than $1,000,000.00. 

At trial, the attorney for the petitioner offered testimony by two different experts who submitted two different theories on causation. The first theory was that the decedent died from an acute pulmonary embolism that originated from a deep vein thrombosis (DVT) in the ankle, which developed because the decedent rolled his ankle at work.  The second theory was that after the decedent developed a DVT in his ankle due to rolling it at work, Staph aureus bacteremia entered the body through micro abrasions caused from the stretching of swelled skin from the ankle injury, the DVT propagated above the knee, and into the lungs, subsequently leading to sepsis and death, all within 72 hours of the work incident.

Prudence Higbee successfully defended this case by offering the testimony of an infectious disease expert, Dr. Stephen Smith, who opined that neither of the petitioner’s theories could have caused the decedent’s death. First, Dr. Smith confirmed there was no medical evidence to support a finding that petitioner sustained acute pulmonary embolism. Notwithstanding the fact that a DVT could not be caused by an ankle sprain or rolling of an ankle, Dr. Smith agreed with the petitioner’s second expert that petitioner died due to severe sepsis caused by Staph aureus bacteremia, but explained that the infection had to be present in petitioner’s body well before he sprained his ankle as he was in severe septic shock and acute renal failure when he presented to the hospital, within just 48 hours of the ankle injury.

The Honorable Ingrid L. French, A.S.J.W.C. found Dr. Smith’s testimony to be credible and supported by the medical records in evidence. Judge French found that although there was no evidence to confirm when the local seeding of Staph aureus bacteremia took place, when Mr. Schonewolf arrived to the hospital just two days after the work incident, the progression of the infection was so severe that it supports a finding that the seeding began prior to his ankle injury.  Based on the foregoing, Judge French found that the petitioner failed to sustain her burden of proof and dismissed with prejudice the claim for dependency benefits.

Notable Win: Dismissal with Prejudice after Filing Motion to Dismiss for Violation of the Fraud Act

Client: Robert Wood Johnson Hospital

Court: Workers’ Compensation

Trial Attorney: Ashley M. Fiore, Esq.

Brief Attorney: Brian P. Berkoff, Esq. and Nicholas Stephens,Esq.

**Results may vary depending on your particular facts and legal circumstances**

Matter Caption: AnnaMarie Angelo v. Robert Wood Johnson Hospital

Petitioner filed two workers’ compensation claims for alleged injuries to the neck, shoulders, back, bilateral legs and right hip.  After many years of ongoing disputed causally related need for treatment requests, the petitioner filed a Motion for Medical and Temporary Disability Benefits wherein she certified to her restrictions, complaints and need for treatment for the lumbar spine. The petitioner sought additional medical treatment, temporary total disability benefits and permanency benefits.

The respondent was able to secure incredible surveillance which demonstrated that petitioner was in peak physical condition despite her allegations otherwise to the Court, respondent’s need for treatment expert and petitioner’s need for treatment expert. Based on this, all benefits were terminated and respondent pursued a Trial on its Motion to Dismiss for Alleged Violation of Fraud Act.

Our office proceeded with testimony and carefully went through all of petitioner’s alleged complaints and restrictions. The surveillance secured clearly contradicted her testimony. At the conclusion of her testimony, the surveillance was presented to the Judge and petitioner’s attorney. All parties agreed that Dismissals of both claims with prejudice were appropriate based on the multiple material misrepresentations made by petitioner. No further benefits were paid to petitioner and the petitioner was ordered to pay for stenographer fees associated with her testimony.

  • Firm News

Workers’ Compensation Shareholder Joins Capehart Scatchard

With over 20 years of litigation experience, Karen V. Vincent focuses her practice on the representation of employers, self-insured companies, and insurance carriers in workers’ compensation defense matters.

Ms. Vincent earned her J.D. from Widener University School of Law and a B.A. degree from Colorado State University. She is a member of the American Bar Association, New Jersey State Bar Association, Association of Trial Lawyers of America, Justice James H. Coleman, Jr. Inn of Court, and New Jersey Association for Justice. She is admitted to practice law in New Jersey and the United States Supreme Court.

Notable Win: Driscoll v. Costco

Client: Costco Wholesale

Court: Superior Court of New Jersey Appellate Division

Trial Attorney: Jennifer A. Cottell, Esq. 

Brief Attorney: McKenna R. Parris, Esq.  

**Results may vary depending on your particular facts and legal circumstances**

The Appellate Division affirmed the trial court’s denial of the Petitioner’s Motion for Medical and Temporary Benefits.  The trial court found Costco’s two expert witnesses, both authorized treating doctors, more credible than the Petitioner’s medical expert who did not review significant medical records including an MRI of the lumbar spine and an EMG study.  He was also unaware of the Petitioner’s prior back injury.  Nevertheless, his treatment of one injection provided only 50% relief for one week, and he had no definitive future treatment plan for the Petitioner.  The trial judge concluded that the Petitioner did not sustain her burden of proving that she was in need of further causally related medical treatment.  The Appellate judges found that there was sufficient credible evidence in the record to support the trial court’s decision and affirmed.

Private Sector EMTs and Paramedics Are Now Covered Under New Legislation Signed by New Jersey Governor Creating a High Rebuttable Presumption in Favor of Compensability of Strokes or Heart Attacks

The recent passage of A5909 has generated many questions from hospitals and private sector ambulance companies which provide EMT and paramedic services.  The questions focus on the recently passed legislative overhaul of N.J.S.A. 34:15.7.3.  That original 1988 law is entitled, “Cardiovascular or cerebrovascular injury or death of police, fire or emergency personnel in response to an emergency: presumption of compensability.”

On January 16, 2024, Governor Phil Murphy signed a sweeping overhaul of this 1988 legislation, providing coverage for a new category of employees, namely paramedics and EMTs, and extending the coverage to private sector paramedics and EMTs. The new law covers paramedics and EMTs who suffer a heart attack or stroke while responding to a public safety or medical emergency or remediating from one within a 24-hour period after the emergency has ended.

As readers know, a presumption of compensability shifts the burden of proof to the employer to disprove a case.  The original 1988 public sector cardiovascular or cerebrovascular law employed a preponderance of evidence presumption, meaning essentially that if the employer could prove by more than 50% that the heart attack or stroke was not work related, then employer would prevail.  The overhaul law which was passed last week changed the presumption to a much higher legal standard.  Now the employer has to prove by clear and convincing evidence that the heart attack or stroke was not related to work.  This is the first statute in New Jersey history to apply a clear and convincing evidence standard in workers’ compensation. 

What does this new standard mean? Readers can think of clear and convincing evidence as requiring the employer to offer proof that demonstrates by a high probability that the facts or medical evidence offered by the employer are true or accurate. Merely showing that the employer’s position is more likely than not to be accurate (just over 50%) will be insufficient to meet the clear and convincing evidence standard.  The defense must demonstrate a high probability that its position is accurate.

The questions that have been coming into our office have focused on what the new law means when it refers to private sector EMTs and paramedics.   Does this mean every single paramedic and EMT in New Jersey who has a heart or attack or stroke in close time relation to an emergency call is covered by this high presumption?  Unfortunately, this new law does not provide any commentary.  Here is what it says:

Coverage under this law shall apply to “any career emergency medical technician or paramedic, employed by the State, a county, a municipality or a private sector counterpart, who is engaged in public emergency medical and rescue services.”  Some have asked what the word “counterpart” means.  This is not a legal term, so one can study a dictionary definition.  The word “counterpart” is defined as someone who performs a function that corresponds to that of another person.  Example, the Manager of a baseball team is the counterpart to the Coach of a football team.  They perform similar services for their respective teams.  Does this new law mean that every private sector paramedic and EMT is automatically considered a “counterpart” of a public sector paramedic or EMT? 

Sometimes the Legislature adds comments after a new Bill explaining its analysis of the main changes to the bill.  There are no comments to explain why this law, formerly focused only on the public sector, is now applicable to private sector paramedics and EMTs.   It seems clear that this law will apply to a situation when a hospital or a private company enters into a contract with a municipality, county or the State to provide paramedic or EMT services for residents or facilities within the municipality, county or state. What we cannot tell is if a contract with a public sector employer is a threshold requirement.  Example:  a private sector ambulance company enters into a contract directly with a nursing home to perform emergency services.  Does that make the private sector EMT a “counterpart” under the above definition?  Does it matter that perhaps in the past the municipality used to perform these services with its paid or volunteer EMTs for the nursing home?  No one knows the answer, but we do know this:  arguments for a broad interpretation of this new law will be advanced by paramedics and EMTs who suffer heart attacks or strokes.  Those cases will be tried in the courts, which will eventually provide us with an answer.

It is also important to understand two other major aspects of the legislative overhaul of N.J.S.A. 34:15-7.3. First, the former requirement that the public safety official prove that he or she was “acting under orders from a competent authority in effecting a response” has been deleted.   The private sector paramedic or EMT does not have to demonstrate proof that he or she was ordered to respond to the emergency by some superior from work.

The other point to understand is that covered employees, including paramedics and EMTS, are presumed to be covered while “remediating from a law enforcement public safety or medical emergency.”  This language is also new.   The word “remediating” is defined as “leaving an emergency in a reasonable period of time, not to exceed 24 hours from the end of the emergency, to carry out post-injury agency protection and decompression including measures such as ‘critical incident stress debriefing.’”  In other words, if the heart attack occurs within 24 hours after the emergency has ended, most likely the presumption of compensability will still apply.   Again, this presumption is the highest presumption ever applied to any New Jersey workers’ compensation statute.

The post Private Sector EMTs and Paramedics Are Now Covered Under New Legislation Signed by New Jersey Governor Creating a High Rebuttable Presumption in Favor of Compensability of Strokes or Heart Attacks appeared first on NJ Workers' Comp Blog.

Notable Win: Dan Lepore and Sons, Company v. Liberty Mutual Insurance

Client: Liberty Mutual Insurance

Court: Philadelphia County Court of Common Pleas

Brief Attorney: Edward F. Kuhn, lll

**Results may vary depending on your particular facts and legal circumstances**

Liberty Mutual Insurance (“Liberty”) defended Dan Lepore and Sons in a Workers’ Compensation case filed by one of Lepore’s employees. The Philadelphia Workers’ Compensation Court found the claim compensable. Lepore felt the claims were fraudulent and was very upset with the outcome. The Workers’ Compensation decision was appealed and the matter was then settled pending the appeal.

Lepore then filed a Complaint alleging Liberty breached the insurance contract by failing to provide conflict-free counsel in the Workers’ Compensation case. Lepore also included a bad faith count for the handling of the Workers’ Compensation claim and for Liberty’s billing practices. We also filed a Counterclaim on Liberty’s behalf against Lepore for Lepore’s failure to pay its deductible.

We filed a motion for summary judgment on behalf of Liberty to dismiss Lepore’s Complaint and to enter judgment on Liberty’s Counterclaim. Lepore also filed a motion for summary judgment to dismiss Liberty’s Counterclaim. The court granted Liberty’s motion for summary judgment to dismiss Lepore’s Complaint and granted Liberty’s Counterclaim. Lepore’s motion was denied.

Respondent Defeats Alleged Claim of Aggravation and Motion for Medical and Temporary Disability Benefits Seeking Payment for Five Spinal Surgeries

Cases involving aggravation of preexisting conditions are quite common in workers’ compensation and are often complex.  Adequately addressing such claims requires obtaining the pre-accident medical treatment records and obtaining expert opinion on whether the work accident aggravated the prior condition. Donald Smith v. H & H Transportation, Inc., No. A-3568-21 (App. Div. December 20, 2023) presents a scenario in which two highly qualified spine surgeons disagreed on whether there was aggravation caused by the work injury.

The facts were not disputed.  Mr. Smith was injured in a motor vehicle accident on January 7, 2017 while driving a tractor trailer.  Years before this accident, he was treated for his back, starting in 2005. Again in 2009 he received treatment for his back.  A CT scan was done of the mid-back in March 2016 revealing degenerative changes.

After the January 2017 work accident, petitioner saw Dr. Anthony Parks, who ordered an MRI, which showed a “right sided herniated disc at T7-8.”  Dr. Parks suggested a second opinion, which took place with Dr. Ryan Cassilly, an orthopedic surgeon at Garden State Orthopedics. Dr. Cassilly received the previous 2016 CT scan and compared that result to the new MRI in 2017.  He felt that the petitioner’s disc abnormalities at T7-8 were not related to the January 2017 motor vehicle accident because the disc was calcified and because the bone spurs between the vertebra had fused, suggesting to Dr. Cassilly that petitioner had a long-standing degenerative condition.  Dr. Cassilly concluded that there was no need for further causally-related treatment.  Respondent then terminated medical and temporary disability benefits.

On his own, petitioner saw Dr. Gregory Przybylski, a neurosurgeon, who reviewed the 2017 MRI.  Dr. Przybylski believed that petitioner suffered from radiculopathy related to the protrusion at T7-8.  He recommended a CT guided selective nerve block at T7-8.  Dr. Przybylski performed five spinal surgical procedures over the next 28 months, including a fusion procedure.

Petitioner filed a motion for medical and temporary disability benefits.  When asked whether he had told the three physicians involved in this case about his prior medical history, he insisted that he had done so but asserted that all three doctors failed to record the history in their reports.  The Judge did not credit this testimony.  All three doctors testified that petitioner never revealed to them his prior medical history.

The case focused mostly on the testimony of Dr. Cassilly, who performed respondent’s IME, and Dr. Przybylski, who performed multiple surgical procedures on petitioner.   Dr. Cassilly said that he saw no spinal cord compression and viewed the 2017 MRI as showing “multiple osteophytes or bone spurs coming off his thoracic spine.”  He said that these findings were not a result of any acute injury but were degenerative.  He also opined that the five surgeries were not a result of any acute injury and were not related to the 2017 motor vehicle accident.  The two main points Dr. Cassilly emphasized were:

  1. The 2016 (pre accident) CT scan showed that the herniated disc at T7-8 was “fully calcified” well before the 2017 accident.
  2. The size of the bone spurs at T7-8 had not changed at all.

Dr. Przybylski admitted that he had not reviewed the 2016 CT scan when he first testified on the issue of causation. After he reviewed the 2016 CT scan, he retracted his opinion that the 2017 work accident caused the calcified disc and agreed with the opinion of Dr. Cassilly on this issue.  Nonetheless, Dr. Przybylski maintained that petitioner’s symptoms were worsened by the 2017 accident and required the five surgical procedures.  The main point that he raised was that petitioner’s condition improved following the nerve block procedure. That led him to conclude that the 2017 accident had caused a nerve injury. 

The Judge of Compensation was faced with two conflicting opinions on causation from two well respected board-certified spine surgeons, one who performed an IME on causation and need for treatment, and the other who operated on petitioner’s spine on an unauthorized basis.  The issue at hand was whether the 2017 accident aggravated the petitioner’s pre-accident condition at T7-8.  The Judge found that Dr. Cassilly’s opinion was “credible, logical and consistent, both medically and factually.”  She concluded that the medical records indicated “evidence of long-standing degenerative etiology rather than acutely post-traumatic” injury.  In the opinion of the Judge of Compensation, there was no aggravation, exacerbation, or acceleration of the petitioner’s underlying condition because the 2016 CT scan and 2017 MRI showed essentially the same findings.

The Appellate Division affirmed the decision of the Judge of Compensation for all the reasons cited by the Judge of Compensation in her opinion.  The Court first observed case law that states that an employer takes the employee as the employer finds the employee, with all preexisting conditions that may exist. The Court added, “the injury is not compensable if a preexisting condition is its sole cause,” citing Sexton v. Cnty. of Cumberland/Cumberland Manor.

In weighing the experts’ opinions, the Appellate Division noted that Dr. Przybylski changed his position on the issue of prior calcification of the disc once he saw the 2016 CT scan.  Dr. Cassilly arguably had been in a better position to opine on causation because he did review the 2016 CT scan at the time of his examination and report.   

This is one of the best cases to read in years to understand the legal standard of aggravation in workers’ compensation.  The Judge of Compensation focused on whether there was any objective medical evidence of change in the preexisting medical condition caused by the work accident.  That is the legal standard in New Jersey.  Quite apart from what the injured worker may say, when the medical studies are essentially the same pre- and post-accident, aggravation is not likely to be found. Dr. Przybylski conceded that the studies were essentially the same once he learned about and reviewed the prior 2016 CT scan, but he offered an after-the-fact analysis that if petitioner improved from a nerve block, then the work accident must have injured the nerve.  This argument failed to impress the trial and appellate courts.  The other interesting aspect of this case is that the opinion of the one-time IME physician on causation carried the day over the opinion of the surgeon who performed five spinal surgical procedures. 

Practitioners, employers, and adjusters regularly analyze the issue of aggravation of a preexisting condition, and the process can be quite challenging. Each year there are literally thousands of cases in New Jersey that turn on this very issue of aggravation. Getting all the prior medical records is a major challenge, particularly in New Jersey, because our state allows no interrogatories in traumatic injury claims.  New Jersey also permits no depositions of the petitioner, except in extraordinary circumstances. Obtaining past medical history depends heavily on what is asked in the medical examination. But what if the doctors write that they asked about prior treatment history, but petitioner denied any prior medical treatment to the injured body part?  How does the employer or carrier then find out about prior treatment?  That is exactly what happened in this case.  All three doctors testified that petitioner denied any prior mid-back treatment.  For his part, petitioner insisted that he told the doctors about his prior back treatment, but they all failed to record in their reports what he told them.

It is not stated in this opinion how the respondent managed to obtain the prior treating records at issue. We only know from reading the opinion that somehow the records were obtained, thereby allowing the issue of aggravation to be addressed in detail by the Judge of Compensation and Appellate Division. Getting the prior records is not the end of the process.  Once the prior medical records are received, they must be provided to the medical expert, who then thoroughly reviews them along with all post-accident medical records, examines the petitioner carefully and opines on whether the work accident caused objective changes to the preexisting medical condition.  This process may sound easy but in practice it is far more difficult than it sounds. It takes a lot of time and effort to do this right.

The post Respondent Defeats Alleged Claim of Aggravation and Motion for Medical and Temporary Disability Benefits Seeking Payment for Five Spinal Surgeries appeared first on NJ Workers' Comp Blog.

Appellate Division Holds Employee Who Worked and Attended School Is Eligible for Temporary Disability Benefits After Unemployment Benefits Terminated

There are not many cases involving eligibility for temporary disability benefits while attending school. The case of Soto v. Hoosier Care, Inc., No. A-0507-22 (App. Div. December 11, 2023) discusses this issue directly.

The facts in the opinion are threadbare, and the reader will have many more questions than answers after reading this decision. The employee, Ms. Soto, was injured while working as a CNA for Hoosier when a picture frame fell from a wall onto her on April 21, 2018.  She injured various parts of her body, including her neck and shoulder.  The case settled for 25% permanent partial disability apportioned 15% cervical and 10% for the right shoulder.

Petitioner returned to work and began working for Complete Care as a CNA.  She then worked for Interim Agency as a home health aide in the fall of 2019.  In 2020, she started taking classes at Ocean County College 15-25 hours per week.  In July 2021, Interim Agency closed.  Petitioner got a job briefly with Lars Home Care and thereafter she applied for unemployment benefits.  She received unemployment benefits from September 2021 until April 14, 2022. She continued as a full-time student at Ocean County College while she looked for a job.

In March 2022, petitioner filed a reopener petition in the New Jersey Division of Workers’ Compensation seeking further benefits from her 2018 accident.  Petitioner saw Dr. Kris Radcliff on April 7, 2022.  He reviewed her prior MRIs and ordered x-rays.  He diagnosed a disc collapse and observed that the 2018 work injury materially contributed to this diagnosis. Dr. Radcliff felt that an anterior cervical fusion in the neck would be necessary. Petitioner testified that Dr. Radcliff took her out of work on April 7, 2022.  However, this was not stated specifically in the text of the doctor’s report and the doctor never testified.  The report itself said petitioner’s status was “out of work.”  Respondent objected to petitioner’s testimony that the doctor told her not to work as hearsay, but the objection was overruled because Dr. Radcliff’s report had gone into evidence uncontested at trial.

Petitioner filed a motion for medical and temporary disability benefits on May 13, 2022.  Respondent agreed to pay medical benefits but denied the claim for temporary disability benefits.  The Judge of Compensation ordered temporary disability benefits commencing April 15, 2022, which was the day after unemployment benefits ended.  The Judge of Compensation noted in an amplification of his prior decision that petitioner “became unemployed because her employer closed; sought employment while collecting unemployment benefits; attended college; and could not work because of injuries causally related to her 2018 work accident, as Dr. Radcliff found.”

On appeal, respondent argued that petitioner removed herself from the workforce by attending college and argued that petitioner failed to prove that she would have been working but for her work-related disability. The Appellate Division affirmed the decision of the Judge of Compensation. “We conclude Hoosier’s argument is without merit.  It is undisputed that Soto maintained employment from 2019 until the summer of 2021.  As the compensation judge found, Soto ‘worked two jobs after the accident with Hoosier.’ The judge specifically determined Soto became unemployed because her employer, Interim Agency, went out of business in July 2021. Thereafter, she collected unemployment benefits from September 2021 to April 2022, and certified weekly to searching for employment.”

The court also rejected respondent’s argument that petitioner’s college pursuits amounted to voluntary unemployment, stating, “… college attendance alone is not dispositive of her employment status. Soto testified that she started school in the fall of 2020, continued to work while in school, and continued to seek employment while in school.”  The Court rejected the application of Tamecki v. Johns-Manville Products Corporation, 125 N.J. Super. 355 (App. Div. 1973) to the facts of this case.  The court observed that Tamecki involved a college student who was injured during a temporary summer job and received temporary disability benefits only until he returned to school full time, at which point temporary disability benefits were properly terminated. “Here, the judge found Soto credibly testified that her college studies did not change her involuntary unemployment status and that she suffered loss of wages as a direct result of her compensable injury.”

The medical aspect of this case is murky because the surgeon never testified.  All the court had was a medical report.  Respondent focused on the deficiencies of the report of Dr. Radcliff.  That report barely mentioned anything about inability to work other than stating that petitioner was “out of work.”  Those are two different issues. Petitioner came to her own rescue in this case by testifying that Dr. Radcliff specifically told her that she could not work when he saw her on April 7, 2022.  That was the single most important fact in this case because it pertained directly to the claim for temporary disability benefits.  A doctor has to take an employee out of work for an employee to obtain temporary disability benefits.  Without petitioner’s own statement that the doctor told her not to work, petitioner would likely have lost her claim.  Hoosier’s employer objected that this statement from petitioner constituted hearsay.  The Judge and the Appellate Division allowed petitioner’s statement mainly because both parties had agreed to enter into evidence the report of Dr. Radcliff.  Additionally, the Court also noted that the Judge of Compensation found petitioner to be very credible in her testimony.

A review of this unreported opinion suggests that this was a trial apparently in which only one person testified:  the petitioner.  Since Dr. Radcliff did not testify, one will never know if he had been aware when he saw petitioner on April 7, 2022 that petitioner was already out of work on unemployment benefits or knew that she was also going to school 15-25 hours per week.  There is also no discussion in the opinion about how many classes petitioner was taking when she saw Dr. Radcliff and whether these classes took place during working hours.  It is also not explained in the opinion why the unemployment benefits ended on April 14, 2022.  Further, there is no mention of whether surgery ever took place or if it did take place, when the surgery occurred. There are simply insufficient facts in this opinion for a full understanding. The record that the judges had to work with was very limited because apparently only one witness testified. The opinion mentions no testimony from any other witnesses.  Employers will certainly question how an employee who was receiving unemployment benefits for seven months while taking classes would be entitled to receive temporary disability benefits when surgery was recommended for an injury that occurred four years earlier and when the record does not recite whether or when surgery took place or whether her classes continued during working hours after April 7, 2022.  

The dearth of facts in this case makes it hard to understand the outcome in this particular case. Putting that observation aside, the legal principle articulated here is important for all practitioners, employers and adjusters to consider.  This case limited the 1973 decision in Tamecki to its specific facts, namely that a young college student who was injured in a temporary summer job but returned to school full time was not entitled to temporary disability benefits during the college school year.   The court said the Soto case presented completely different facts.  It involved an employee who had a full-time working history while taking classes. The Court concluded that Tamecki does not prevent such an employee from obtaining temporary disability benefits when an employee is injured during the course of employment but also is taking classes.

The post Appellate Division Holds Employee Who Worked and Attended School Is Eligible for Temporary Disability Benefits After Unemployment Benefits Terminated appeared first on NJ Workers' Comp Blog.

Medical Provider Cannot Sue Workers’ Comp Carrier for Breach of Contract to Get Around New Jersey’s Exclusive Remedy for Medical Disputes

Medical claim petitions comprise an increasingly large percentage of New Jersey workers’ compensation claims with over 5,000 being filed in 2023 alone.  One of the problem areas remains jurisdictional issues when a New York or Pennsylvania workers’ compensation case is referred to New Jersey just for a one-time medical procedure. The recent case of Hudson Regional Hospital v. New Hampshire Insurance Co., No. A-0978-21 (App. Div. November 16, 2023) presents an interesting procedural twist in this complicated area of law.

Hudson Regional Hospital in Secaucus, New Jersey provided treatment to five New York residents for injuries that took place in New York while working for their New York employers.  The hospital applied for compensation for the medical treatment of these five patients from the New York Workers’ Compensation Board, which awarded compensation based on the New York fee schedule.  The amount reimbursed to the hospital was less than the charges.  Under Section 13 of the New York Workers’ Compensation Law, medical providers must write off the unpaid balance after fee schedule payments, but the provider can also dispute the compensation awarded by the New York Workers’ Compensation Board through an arbitration procedure.  In this case Hudson Regional did not dispute the compensation for treatment of the five payments through the New York Board.

Instead, Hudson Regional decided to file claims in the New Jersey Division of Workers’ Compensation seeking reimbursement under the New Jersey Workers’ Compensation Act, which does not have a fee schedule.  Hudson Regional argued that they could file in New Jersey because the medical procedure took place in New Jersey.  Since New Jersey has no fee schedule, the state bases payments for physicians, surgeons, and hospitals on services that are “reasonable and based upon the usual fees and charges which prevail in the same community for similar physicians’, surgeons’ and hospital services.”  Hudson Regional sought to be paid the difference between payments under the New York Workers’ Compensation Board and the hospital’s billed charges.

All the New Jersey medical claim petitions were dismissed for lack of jurisdiction since the only connection to New Jersey was the location of the medical procedures.  These were New York workers’ compensation cases in every respect. Hudson Regional did not appeal the dismissals of their medical claim petitions to the Appellate Division.

What happened next makes this case very unusual.  The hospital decided to file a complaint in the New Jersey Law Division against New Hampshire Insurance Company alleging that the five patients were third-party beneficiaries under the insurance policies New Hampshire Insurance issued to their employers.  Hudson argued that the patients were entitled to workers’ compensation benefits under the New Jersey Workers’ Compensation Act, which pays much higher medical benefits to providers than under the New York fee schedule.  The complaint further alleged that New Hampshire Insurance breached the contractual rights of the five patients, was unjustly enriched and engaged in bad faith and unfair claim settlement practices.  The complaint sought payment of $386,961.32.

The trial court agreed with New Hampshire Insurance that the civil complaint had no basis in law whatsoever because the New Jersey Division of Workers’ Compensation has exclusive jurisdiction over claims for reimbursement for medical treatment arising from work-related injuries.  Hudson Regional appealed this decision.  The Appellate Court agreed with the trial judge in its holding that the New Jersey Division has exclusive jurisdiction on issues pertaining to disputes over medical treatment arising from workers’ compensation. The Court rejected the breach of contract suit with some blunt language: “An employee who receives an unfavorable decision from the Division cannot circumvent the comprehensive statutory structure enacted by the Legislature to address work-related claims by filing a suit alleging breach of contract in the Superior Court against their employers’ workers’ compensation carrier seeking workers’ compensation benefits denied by the Division.” 

Having found against Hudson Regional, the Court went on to consider the case of D’Ascoli v. Stieh, 326 N.J.  Super. 499 (App. Div. 1999).  In that case a Pennsylvania resident, employed by a Pennsylvania employer, suffered an injury while working in Pennsylvania but sought treatment in New Jersey from a New Jersey surgeon.  The patient agreed in writing to pay the fees for services for the New Jersey surgeon, regardless of insurance coverage.  The Court read the D’Ascoli case as supporting the right of a New Jersey medical provider to file an action in the Superior Court against an out-of-state patient to recover fees for medical services that were provided for a work-related injury, “even if that patient received workers’ compensation benefits in their home state.” The Court observed that Hudson Regional also had obtained an assignment of workers’ compensation benefits from each of the five patients but chose not to sue the patients.  Rather, Hudson Regional sued New Hampshire Insurance, which the Court said violated the New Jersey Workers’ Compensation Act.

This case is very helpful to practitioners and employers. Hudson Regional no doubt anticipated that an appeal on jurisdictional grounds would have failed.  There have already been decisions in New Jersey making clear that where the only contact with New Jersey is the location of the medical procedure, New Jersey does not have jurisdiction over a medical claim petition.  So, the hospital tried a novel end run with a suit against the workers’ compensation carrier for breach of contract.  That approach has now been soundly rejected.  The hospital could have sued the five individual patients under the above D’Ascoli case for the difference.  There were, however, likely several reasons that the hospital did not want to sue the patients.

It is an understatement to say that there is something unseemly about this recurrent scenario:  a New York resident is injured in New York, works in New York, is hired in New York, and gets treated in New York for his or her work-related injury.  Then the worker is abruptly referred to New Jersey for a medical procedure.  The medical provider then applies for compensation from the New York Board, receives that compensation, and turns around and seeks additional compensation under New Jersey law for the difference between the New York fee schedule payment and the much more generous “usual and customary” non-fee schedule reimbursement in New Jersey.  When the medical provider’s request for additional payments under New Jersey law is rejected, the provider retains counsel and files a medical claim petition in New Jersey.

These attempts to file medical claim petitions in New Jersey on New York cases are unfair and costly to employers, third party administrators and carriers. The referral itself to New Jersey exclusively for the medical procedure must also be puzzling to New York injured workers because all their treatment took place in New York until the procedure and New York City has a widely acclaimed private and public health care system.  Why does this scenario keep happening? The seminal difference between the two states is that New York provides fairly modest reimbursements to medical providers under their state’s  fee schedule, while New Jersey provides among the highest medical reimbursements in the nation. The reimbursement can sometimes be five or ten times higher in New Jersey than New York.

One must wonder how many carriers, third party administrators and employers have unwittingly paid more money on such medical claim petitions, not realizing that there is no New Jersey jurisdiction at all when the only contact in New Jersey is the location of the medical procedure.

The post Medical Provider Cannot Sue Workers’ Comp Carrier for Breach of Contract to Get Around New Jersey’s Exclusive Remedy for Medical Disputes appeared first on NJ Workers' Comp Blog.

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