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Comp SPeak: Newsletter from Shanley Price

April 2021   |   Newsletter from Shanley Price

After an unprecedentedly frigid February, Shanley Price is very pleased to welcome the spring season.


This is a wonderful time of year in Austin, ordinarily filled with outdoor barbecues, crawfish boils, live music, and SXSW. This year will be a little different, but with
COVID-19 vaccinations in full force throughout the State of Texas, we are thankful to see a tiny glimpse of the light at the end of the tunnel.


We hope you are staying safe and well: good times are just a little further down the road!

Three Attorneys and Two Law Firms Charged with Fraud by Texas DWC

A grand jury has returned indictments against three attorneys and two law firms in Lewisville and Houston. The indictments resulted from investigations by the DWC’s Fraud Unit, which were referred to DWC’s prosecutor embedded in the Travis County District Attorney’s Office.

Indictments were returned against Roger Farahmand of the Langford, Wise and Farahmand Law Firm and Leslie Casaubon.  It’s alleged that from July 1, 2017, to August 31, 2019, Casaubon and her staff submitted billing through the DWC’s attorney fee processing system for work they did not do. The defendants are charged with engaging in organized crime, a first-degree felony, and securing the execution of a document by deception, a second-degree felony. If convicted, each could face up to life in prison and a $10,000 dollar fine. Leslie Casaubon is currently under indictment and has a similar matter pending in Travis County’s 460th Judicial District Court. 

The grand jury also returned indictments against attorney Adam Henderson of Houston, and the Adam Henderson Law Firm. The indictment alleges that between January 1, 2012, to January 31, 2019, Henderson submitted bills for work he did not do.  They are charged with securing the execution of a document by deception, a first-degree felony, and tampering with a government record, a second-degree felony. If convicted each could face up to life in prison and up to a $10,000 fine.

Attorneys who represent injured employees in the Texas workers’ compensation system are required to submit their fees through an automated system at DWC. Those fees are taken out of injured employees’ benefits. According to the DWC, the defendants are alleged to have been paid more than $900,000 out of their clients’ benefits as a result of the false and fraudulent fee bills.

The DWC urges those who suspect workers’ compensation fraud to call 1-844-FRAUD99 (1-844-372-8399) or visit http://www.tdi.texas.gov/wc/ci/wcfraud.html.

Copyright 2021, Shanley Price, LLP

Remaining Defendants Sentenced in Forest Park Medical Center Bribery Scam Case in Northern District of Texas

On March 22, 2021, U.S. District Judge Zack Zouhary sentenced the remaining defendants in the Forest Park Medical Center health care fraud bribery scam, a $40 million dollar fraud and bribery case involving 14 defendants.  

The scheme involved surgeons, physicians, and hospital administrators who steered patients, many of which were workers’ compensation claimants, to Forest Park Medical Hospital. Surgeons got kickbacks, disguised as “marketing” or “consulting fees” for their referrals.  The case began in 2016 and the defendants involved in the case were sentenced to a combined 74+ years in federal prison and ordered to pay $82.9 million in restitution.

Eleven of the defendants participated in the Texas workers’ compensation system, and included a nurse who recruited and preauthorized workers’ compensation requests, as well as the founder of a company that filled out preauthorization for workers’ compensation patients.

The DWC Fraud Unit found that insurance carriers in the Texas workers’ compensation system alone were billed over $14 million and paid $2.6 million in this case.

Judge Jack Zouhary sent to prison Wilton Burt, Jackson Jacob, Douglas Sung Won, Michael Bassem Rimlawi, Shawn Mark Henry, Mrugeshkumar Shah, and Iris Forrest, all of whom were convicted at trial in April 2019. Ten other defendants pleaded guilty before a trial. One defendant pleaded guilty after a mistrial.  Judge Zouhary also ordered the defendants to pay a total of $82.9 million in restitution.

Copyright 2021, Shanley Price, LLP

Accurate Reporting of COVID-19 and Reaction to COVID-19 Vaccine to Texas DWC

On March 2, 2021, the DWC issued a reminder to system participants regarding proper reporting and specific coding of: (1) claims involving COVID-19 exposure or infection, and (2) claims involving reaction to a COVID-19 vaccine. 

For claims involving COVID-19 exposure or infection, carriers are to submit a COVID-19 First Report of Injury using the International Association of Industrial Accident Boards and Commissions’ (IAIABC) codes for EDI claims reports: “cause of injury” code 83 – Pandemic and “nature of injury” code 83 – COVID-19.  In the incident description field, carriers should clearly indicate that the claim involves COVID-19.

In the case of a claim involving an adverse reaction to the COVID-19 vaccine, the DWC asks that insurance carriers not report using “nature of injury” code 83 – COVID-19.  Rather, carriers should report COVID-19 vaccine reaction claims using the new "nature of injury" code 38 – Adverse Reaction to a Vaccination or Inoculation combined with the "cause of injury" code 83 – Pandemic. Insurance carriers should also clearly indicate whether the claim involves a COVID-19 vaccine reaction in the incident description field by using language such as “COVID-19 vaccine reaction.”

The DWC states that proper reporting and coding will allow it to accurately monitor the frequency, cost, and outcome of these reported claims.

Copyright 2021, Shanley Price, LLP

Is an Adverse Reaction to a COVID-19 Vaccine Compensable in Texas?

On March 22, 2021, the DWC issued a memorandum advising to file a First Report of Injury with the DWC if a COVID-19 vaccination relates to an employee’s job and it causes the employee to miss one or more days of work.  However, the DWC correctly points out that “submitting a First Report of Injury to DWC does not mean that a COVID-19 vaccine reaction is work-related or that the insurance carrier is liable for payment.” (Emphasis added.) 

With the increased availability of COVID-19 vaccinations, it is expected that many employers will mandate that their workers become vaccinated as a requirement to remain employed. If the employee becomes ill, suffers work incapacity, or requires medical treatment as a result of an adverse reaction—is this covered under workers’ compensation?  It will depend upon the facts of the particular case.

Coverage turns on whether an injury or illness “arises out of and in the course of employment,” and whether an adverse reaction to a vaccination is compensable will be a question of fact to be determined by the ALJ based on his or her evaluation of the evidence and the particular facts of each case.  However, if the employer mandates that the employee become vaccinated, and/or tells the worker that they cannot return to work unless they are vaccinated, it’s possible that an adverse reaction to the vaccination will be deemed compensable.  In addition, adverse side effects from receiving a vaccine at a vaccine clinic hosted by an employer would likely be compensable, since the inoculation occurred on work premises.  (See, e.g., Payne v. Galen Hosp. Corp., 28 S.W.3d 15, 20-21 (Tex. 2000) (adverse reaction caused by employer-provided medication was compensable under the Texas Workers’ Compensation Act).  Compensability is less clear in cases where the employee becomes sick from a vaccination that was merely encouraged, or facilitated by, the employer.  

In order to balance the interests of workplace safety and exposure to workers’ compensation claims, employers may want to have separate policies depending upon job duties and based on whether the employee works in close proximity to others. For example, the employer could require vaccines only for employees who work in close contact with each other or with the public, but not for those who work in a private office and/or are able to perform their duties remotely.

If you have questions or would like help evaluating compensability of a specific case involving an adverse reaction to a COVID-19 vaccination, please contact one of the attorneys at Shanley Price, LLP.

Copyright 2021, Shanley Price, LLP

Shanley Price Associate, Amanda Schwertner, Selected to 2021 Texas Rising Star

Shanley Price is thrilled to announce that Associate Amanda J. Schwertner has been selected as a 2021 Super Lawyers Rising Star!  Amanda exemplifies what it means to be a “Rising Star” both at SP and within the practice area of insurance defense, and we are honored to recognize her accomplishments.

Super Lawyers is a rating service that selects outstanding lawyers from more than 70 practice areas who have attained a high degree of peer recognition and professional achievement. The selection process includes independent research, peer nominations, and peer evaluations. Rising Stars candidates must be either 40 years old or younger or in practice for 10 years or less.

Prior to joining Shanley Price, Amanda worked in private practice in the areas of general civil litigation, business transactional law, administrative law, and workers’ compensation defense. Amanda has a background in medical, having served as a sports trainer while an undergrad at Texas Tech University.  She has a knack for complicated medical cases, diving deep to find key insights that often become a foundation to our clients’ defense. 

Amanda has also exemplified the SP culture of collaboration and support.  Amanda is recognized as both a strong legal researcher and a strong litigator, a rare combination in the field of workers’ compensation defense.  She is also a genuinely nice person.  The only thing more exciting than the impact that Amanda has already brought to SP and our clients is the impact she’ll bring in the future as she continues to grow her practice.

Congratulations, Amanda!

Copyright 2021, Shanley Price, LLP

Texas Legislative Update – Many Bills Filed Impacting the Workers’ Comp System

The Texas Legislature continues to propose legislation that, should it pass, will drastically impact workers’ compensation in our state. One bill in particular—HB 4385--has the capacity to drastically affect the way medical treatment is administered in the Texas workers’ compensation system, and essentially would overhaul the entire designated doctor process in Texas.

HB 4385 would drastically impact medical benefits under workers’ compensation, and would provide for several presumptions in favor of a treating doctor’s opinion.  (Currently, these same types of presumptions are reserved for the opinion of the designated doctor, a state-appointed, supposedly neutral doctor.) 

HB 4385 would eliminate preauthorization requirements and utilization review. Instead, it would provide that an injured employee is entitled “to all healthcare reasonably required by the nature of the injury as and when needed as determined by the employee’s treating doctor.” It would create a presumption that all services provided by the injured employee’s treating doctor are reasonable, and would do away with the requirement that the treatment be consistent with medical policies or fee guidelines, or subject to utilization review. The bill would also eliminate an insurance carrier’s ability to dispute a bill based on lack of preauthorization.

The bill further provides that an injured employee would be eligible for IIBs based on a finding of impairment made by his/her treating doctor, and that the treating doctor’s impairment rating is presumed to be correct. The proposed legislation further deletes the provision allowing for a dispute of that impairment rating. The bill would shift the verification of a “substantial change in injured employee’s condition” from a designated doctor to the treating doctor. Finally, the bill would remove monitoring and oversight authority of designated doctors from the medical advisor and medical review board. 

As you can imagine, we will be tracking this bill closely and will provide further updates as and when they occur.

HB 1270/SB 293 would expand practice of chiropractors to include treatment for the neuromusculoskeletal system; this means they could diagnose, analyze, examine, and evaluate conditions that relate to both the musculoskeletal and nervous system if the disorder manifests in both systems.

HB 3623 would extend coverage and create a presumption of compensability for certain healthcare providers to include post-traumatic stress disorder (PTSD) suffered as a result of his/her employment during a “public health” disaster (e.g. COVID-19). 

HB 4445 would require employers to provide written notice of potential exposure to a public health emergency to its employees and subcontractors who were in the same area of the workplace at the time the infected employee was present. The employer would also be required to provide information regarding public health emergency-related benefits to which they are entitled under federal or state law, including WC benefits.  

SB 2598 would amend the date of injury for PTSD diagnosis for first responders to be the 30th day after the date on which the first responder was first diagnosed with the disorder. 

HB 2502 seeks to extend LIBs entitlement to include a “substantial paralysis” that requires the injured employee to use a wheelchair for mobility, regardless of whether “minimal movement” of the affected limb is possible. 

HB 4038 proposes to extend LIBs entitlement to injured employees with adhesive arachnoiditis (swelling condition in lumbar and sacral spinal canal). 

HB 3120 (companion SB 1450) would amend LIBs entitlement with regard to third-degree burns. In addition to HB 2505 and HB 4038, this bill also seeks to amend the “insanity or imbecility” language used in defining entailment to LIBs based on a traumatic brain injury.  

HB 2654 would expand the intoxication presumption to include a positive test to include an analysis of “blood, urine, or any bodily fluid collected during an autopsy” and would remove the “voluntary introduction” language from the intoxication presumption. It also provides that the presumption may be rebutted only with credible and objective evidence that the person was not intoxicated. 

HB 3098 would allow designated doctor exams for the purpose of determining maximum medical improvement (MMI) and impairment rating (IR) to be performed using telehealth services or telemedicine medical services.

HB 1339/1752 would change the procedure for conducting a Benefit Review Conference (BRC). Currently, the Act provides that BRCs are to be held in-person. The bill would change this and would allow for BRCs to be held via telephone or videoconference, unless there is good cause to have an in-person proceeding. 

HB 3818 would require the Commissioner to adjust fees for a designated doctor (DD), post-DD required medical exam doctor (post-DD RME), treating doctor, or treating doctor referral in order to reflect inflation. The bill also provides a minimum amount be paid to a DD or post-DD RME doctor when the injured employee fails or refuses to attend a scheduled exam.  

HB 3042 would add subsections to Texas Labor Code §413.011 granting authority to the Commissioner to amend or replace, at any time, treatment guidelines, return-to-work guidelines, individual treatment protocols relating to reimbursement policies and guidelines, and the prescription medication formulary to ensure the guidelines, protocols, and formulary are concurrent and comply with the requirements of §413.011. 

Please see our February edition of Comp SPeak for a more in-depth review of bills filed prior to 2/07/21. We will continue to keep an eye on these bills as the Session progresses. However, please remember that simply because a bill has been filed does mean it will pass and that there will be a modification in the law. The Legislature must approve the bill and it must also be signed by the Governor before the bill becomes law.

Copyright 2021, Shanley Price, LLP

 In Good Form

A regular feature highlighting one DWC form or PLN per month; including its purpose, potential pitfalls, and tips for using it correctly and properly.

As anyone familiar with workers’ compensation in Texas will know, forms are a very important component to adjusting claims.  Every month we will be focusing on a specific form, be it a DWC form, a Plain Language Notice (PLN), a general notice form, or other form used in the context of workers’ compensation.  

This month’s focus is the PLN-1 Notice of Denial of Compensability/Liability and Refusal to Pay Benefits. The purpose of the PLN-1 is to notify the claimant or (in the case of a fatality claim) death benefits beneficiary and the DWC of the carrier's denial of compensability of, or liability for, an injury. In other words, this form is used by the insurance carrier when it is disputing a workers’ compensation claim in its entirety.  

In addition to the general claim information to be included at the top of the form, the carrier must provide a clear explanation for its action, including its reason(s) for the denial.  Denials should be based upon information the carrier has obtained or verified, and the carrier must provide a full and complete statement of the facts surrounding the claim that justify and serve as the grounds for the denial of compensability or liability for the claim. A generic statement such as “liability in question,” “compensability in dispute,” “under investigation” or similar phrases with no further description of the factual basis for the denial does not satisfy the requirements of DWC Rules. 28 Tex. Admin. Code §124.2.

In the case of a first responder, if a PLN-1 is sent in response to a claim for which a presumption is claimed to be applicable, the PLN-1 must also include a statement by the carrier that: (1)  explains why the carrier determined a presumption does not apply to the claim for compensation; and (2)  describes the evidence that the carrier reviewed in making the determination that a presumption does not apply. Tex. Lab. Code §409.022(d).

If an insurance carrier does not dispute compensability of the claim by filing the PLN-1 on or before the 60th day after the date the carrier is notified of the injury, the carrier waives its right to dispute compensability. Tex. Lab. Code §409.021(c). The grounds for the refusal specified in the notice constitute the only basis for the insurance carrier's defense on the issue of compensability in a subsequent proceeding, unless the defense is based on newly-discovered evidence that could not reasonably have been discovered at an earlier date. Tex. Lab. Code §409.022(a).

The carrier must file a copy of the PLN-1 with DWC and the appropriate Electronic Data Interchange (EDI) transaction. The notice of denial is not considered complete until a copy of the PLN-1 and the electronic filing have been received by DWC.

Copyright 2021, Shanley Price, LLP

Comp SPeak Claims Management Tip
of the Month

Tools for the claims management trade.

This month’s tip of the month ties in with the PLN-1 Notice of Denial. As noted above, the carrier’s grounds for denial as specified in its PLN-1 constitute the only basis for its defense to compensability, and the carrier may not raise additional defenses to payment unless that defense is based on newly-discovered evidence that could not reasonably have been discovered at an earlier date.  It is very difficult to show that a defense is based on evidence that could not reasonably been discovered within the 60-day investigation period.  Therefore, the claims handler should take great care to list all defenses to liability for which it has reasonable grounds; otherwise, the defense could be deemed to have been waived.  

For example, an employee is rear-ended on his way to work.  The claimant later goes to the ER and as part of his treatment is given a drug screen which comes back positive for methamphetamine.  The employee fails to notify his employer of the injury until two months later, when he claims a compensable injury in the form of a whiplash injury to his cervical spine.  

In the above scenario, the insurance carrier has reasonable grounds for at least three potential defenses to liability: (1) the injury was sustained while “coming to” work, and thus, was not sustained while in the course and scope of employment, (2) the injury was sustained while the employee was in a state of intoxication, and (2) the injury was not reported timely within 30 days to his employer.  The insurance carrier must raise all three defenses to compensability on a PLN-1 filed within 60-days’ notice of the claim, or it waives that defense.  All three defenses do not need to be raised on the same PLN-1; for example, if the carrier raises the course and scope defense and the timely reporting defense on day 45, then (in the course of its investigation), learns on day 50 of the employee’s positive drug test, the carrier may file an additional PLN-1 additionally raising the intoxication defense.  The intoxication defense is not waived so long as it is filed within 60 days of receiving first written notice.  However, all three defenses must be raised on a PLN-1 within the 60-day investigation period, or else the carrier could be deemed to have waived the defense.  

If the carrier needs additional time to develop a defense, as long as there are reasonable grounds for the defense based upon facts obtained during the carrier’s investigation, it would be safest to err on the side of raising the defense within 60-day investigation period.  If it later appears that there is inadequate evidence to support the defense, the carrier can opt to accept the injury by initiating benefits, or (in the case of multiple defenses raised) drop the defense for which there is inadequate evidence and maintain the remaining defenses.  

If you have any questions regarding best practices for raising a defense to compensability in one of your claims, please feel free to contact a Shanley Price attorney.

Copyright 2021, Shanley Price, LLP

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