Back to Basics: Recalling Perini

Coverage under the Longshore and Harbor Workers Compensation Act has a somewhat tortured history. In today's application, we throw around words like "situs" and "status," but when a tough case comes along, it can help to recall the origins of the buzz words by tracing the history of Longshore coverage to see where your scenario fits in - if at all.  

 

How many of you have heard of "Perini coverage?" Do you really know what it is? In need of a quick refresher? Here goes.

 

When the Longshore Act was enacted in 1927, and up until the 1972 amendments, coverage under the Act was determined by the situs of the injury.  If a worker suffered a work related injury upon the navigable waters of the United States, or on a dry dock, regardless of what his job was, he was covered by the Longshore Act.

 

The 1972 amendments expanded coverage landward, “upon the navigable waters of the United States (including any adjoining pier, wharf, dry dock, terminal, building way, marine railway, or other adjoining area customarily used by an employer in loading, unloading, building, or repairing a vessel).” The 1972 amendments also added a “status,” or maritime employment, requirement to limit coverage to only maritime employees in the newly expanded “situs.” 

 

But the question arose: is a worker injured upon navigable water, who would have been covered prior to the 1972 amendments, no longer covered unless he can establish that he meets the new “status” requirement?

 

In Perini the Supreme Court held that Congress, in the 1972 amendments, did not intend to withdraw coverage from any worker who would have been covered prior to the amendments.  This is regardless of occupation.  If you are injured in the course of employment "upon the navigable waters of the United States," or on a dry dock, then you are covered by the Longshore Act.  There is no “status” test. This is "Perini coverage." 

 

There are two 'exceptions' to Perini coverage. The first is where the worker is excluded from coverage by an express statutory exception as found in Section 2(3) of the Act. Examples include clerical workers, security guards, and Jones Act seamen. These exceptions were added in the 1984 amendments; if Congress had wanted to overrule Perini, it could have done so at this time, but it chose not to. 

 

The second is a judicial "exception" that has been carved out to varying degrees by the Circuit Courts. It concerns workers who are upon navigable water "transiently or fortuitously" when injured. If the injured worker's connection to the water is tenuous, under certain circumstances, courts have denied Longshore coverage. This a factual inquiry and the outcome can vary by judge, court, and circuit. 

 

So, the bottom line is, if the worker was injured "upon the navigable waters of the United States," and his regular job duties require that he be there, and  he is not excluded by a specific statutory exclusion, then he is covered by the LHWCA.

Government Shut Down and Workers' Compensation

With the federal government shutdown still in place, many of you probably have questions about its direct impact on your workers' compensation claims. Two important federal government players are noteworthy.

1. U.S. Department of Labor. This includes the Office of Administrative Law Judges (OALJ) and the Office of Workers' Compensation Programs (OWCP). These are the two agencies that adjudicate and administer the Longshore and Harbor Workers' Compensation Act (LHWCA) and its extensions. Both Offices are closed. This means that no hearings will take place, no Informal Conferences will occur, no settlements can be approved, and filing deadlines are postponed. The Chief Administrative Law Judge has issued a general order regarding the status of hearings and filing deadlines during the suspension of Federal government services, which can be viewed here. The abrupt halt to the administration of these injured worker claims can be particularly costly to Employer/Carriers who are continuing to pay benefits while awaiting adjudication or settlement, and even devastating to injured workers who's benefits have been denied or suspended pending adjudication or settlement. Additionally, the long term ramifications of the shutdown of these operations remains to be seen; however, I expect that the effects of the shutdown will be felt for a long time after government gets back to work. It could takes months, or longer, to clear the backlogs that will be created by this hiatus. We will keep you posted as the saga continues. Please contact us if you any specific questions about what you should do with your claims while we wait; and we can certainly offer assistance with getting your claims back on track once the machine starts cranking again.  

2. Centers for Medicare/Medicaid Services. Although CMS offices are not fully operational, and much of the staff are being furloughed, the contractors will continue normal operations. The government shutdown will NOT result in termination of operations at the Workers' Compensation Review Contractor (WCRC), the entity responsible for the review of Medicare Set-Aside submissions, and the Medicare Secondary Payer Recovery Contractor (MSPRC), the entity that handles the recovery of conditional payments on behalf of Medicare. While this means that Medicare Set-Asides that have been and will be submitted to the WCRC may continue to be reviewed, because the final approval of an MSA is issued by the CMS Regional Offices, and these offices are not contractors, but are part of the Federal Government, there may be delays in receiving the final approval of submitted Medicare Set-Asides. Therefore, although operations will not cease, with each added shutdown day, the backlog of paperwork increases.  

 

Some other things to note: the US Postal Service is self-funded and will continue its normal operations; government agencies and services that are funded separately from the funding that is presently being impacted will continue; for example, law enforcement offers will stay on the job; key government functions, such as air traffic control, remain functional under emergency funding statutes. Also, the US Department of Veterans Affairs and Social Security Administration are funded by long-term or mandatory appropriations and are thus are largely unaffected.  

 

And what about if you do business with the government? Do you still work? Will you be paid? What do you do with your employees? For answers to these and other questions, check out our Vandeventer Black's Construction Law Blog.

EMPLOYER ISSUES IN WORKERS’ COMPENSATION: UNDOCUMENTED WORKERS

Employees working for an employer covered by the Virginia Workers’ Compensation Act are entitled to monetary benefits when a work-related injury causes a total loss of wage earning capacity, such as where the worker is unable to return to his or her job because of a temporary or permanent injury.  This applies equally to unauthorized or undocumented workers in the United States.  

 

However, the Virginia General Assembly has made a policy decision that employers and insurance companies are not required to pay partial loss of wages in cases where the injured worker is “not eligible for lawful employment,” for example, unauthorized or undocumented workers.  Thus, while unauthorized workers are not barred outright from coverage under the Virginia Workers’ Compensation Act, they are barred from claiming and receiving wage loss compensation once they have regained at least some work capacity following their industrial accidents. 

 

Therefore, when you are discussing the adjudication of a workers’ compensation claim with the attorney retained to represent your interests in defense of such a claim, make sure your attorney is aware if there is any question of the immigration status of the injured worker, and be sure to include all documentation you have pertaining to the injured workers’ immigration status. 

The Surveillance Chronicles, II

Here's another gem for you. A postal worker was receiving workers' compensation benefits - and has now been convicted of criminal fraud. The claimant was spotted on "The Price is Right," waiving her arms and even spinning the 'big wheel' - twice!

Social media - and even regular old television it seems - can be an effective surveillance tool. More on that to come . . .  

The Princess and the Pea: Liability for Prescription Mattresses?

When is a mattress a covered medical expense under the Virginia Worker's Compensation Act?  The answer may change depending on the facts of the case.

The general rule is that orthopedic type mattresses do not meet the definition of necessary medical attention under Virginia Code § 65.2-603.   The Commission has consistently held that mattresses do not meet the definition of "necessary medical attention."  Hutcherson v. Washington Metropolitan Area Transit Authority, 65 O.I.C. 268 (1986); Griffin v. Richardson-Wayland Electrical Corp., VWC File No. 155-38-38 (Oct. 19, 1992)(holding that an orthopedic box spring and mattress is not included in the terms "medical attention" or "orthotic appliance" for which the employer is responsible); Williams v. Hercules, Inc., 64 O.I.C. 357 (1985)(holding that a waterbed does not meet the definition of "medical attention").

But, the Commission has held that in certain cases, a prescribed mattress may be considered an "appliance" under section 603(A)(1)(ii). Wratchford v. Townsend Tree Service Co., VSC File No. 215-83-38 (Mar. 18, 2008).   This is a case-by-case determination. In Wratchford, the Commission was asked to rule with respect to a magnetic RX mattress that was prescribed by the treating physician as a device designed with a particular purpose of addressing the claimant's pain situation.  In that case, the Commission determined that the bed could be considered an appliance under 603(A)(1)(ii).  The Commission determined that the mattress was medically necessary where the treating physician had provided a detailed scientific explanation of why and how the appliance was needed to treat and alleviate the claimant's pain.

Carrier Prevails in Medical Bill Dispute

In the absence of a reimbursement agreement with the medical provider, workers' compensation carriers in Virginia are required to pay medical providers according to the prevailing community rate as provided by Va. Code Section 65.2-605 and Rule 14 of the Virginia Workers' Comensation Commission Rule 14.  In a dispute, the carrier bears the burden of establishing that the charges do not meet the community standard.  This is a difficult burden that often requires reliance on statistical experts and the existence of accurate and up-to-date rate databases that correspond to the community in question.  A recent decision out of the Virginia Worker's Compensation Commission, Hill v. VDOT-NOVA District Management, JCN 2099265 (Feb. 1, 2013), indicates that such complicated statistical data may no longer be necessary for a carrier to prevail in a provider fee dispute. 

In Hill, the carrier successfully defended a provider's reimbursement claim using the testimony of a doctor from the same area of Northern Virginia who practiced in the same specialty field as the claimant's provider.  In 2008, the claimant's neurosurgeon performed a fusion surgery on the claimant with the assistance of a physician's assistant.  The medical provider's office then billed the physician's assistant's work to the carrier at 95% of the surgeon's rate (more than $20,000).  The carrier paid only a portion of the bill on the grounds that the physician's assistant's charges exceeded the usual, customary, and reasonable rate for the community.  The provider filed a claim for the balance of the bill.

The carrier hired another neurosurgeon from the area to review the disputed charges.  In his deposition, the carrier's neurosurgeon testified that 20% was the upper limit of charges for physician's assistant's based upon his inquiries with the majority of other medical practices in the area.  Noteably, the carrier's neurosurgeon admitted that had no statistical date samples to support his conclusion. The Commission acknowledged that while the prevailing rate typically has been established through expert statistical analysis, "we have never held that this was the only manner in which the prevailing community rate could be ascertained."  The Hill decision shows that a doctor's testimony may be used to successfully defend a medical provider claim where the doctor has significant knowledge regarding the prevailing rate in the community for similiar proceedures and fully explains the basis for that knowledge.

U.S. Supreme Court - A Houseboat is not a Vessel

The Supreme Court recently issued an opinion that may have the effect of permitting more injured workers to fall within the realm of the Longshore and HarborWorkers Compensation Act (the “ Longshore Act”) but excluding them from the Jones Act. In Lozman v. City of RivieraBeach, the Court further addressed the issue of whether or not a particular structure is a “vessel.”

 

The opinion involved a houseboat that had no independent source of electricity, no steering mechanism and had French doors and ordinary windows (as opposed to watertight portholes).  The Court stated “in our view a structure does not fall within the scope of this statutory phrase unless a reasonable observer, looking to the home’s physical characteristics and activities, would consider it designed to a practical degree for carrying people or things over water.”  The Court, therefore, found the home not to be a vessel.

 

The issue in Lozman was whether admiralty jurisdiction was proper. Therefore, the decision may impact whether a worker is covered under the Longshore Act.  If a worker is not a Jones Act “seaman,” he or she is likely protected under the Longshore Act.  If, because of this case, certain workers are not Jones Act seaman because the structures they work on are not “vessels,” the Longshore Act will expand to cover those workers.

 

This case acts to limit what constitutes a vessel, which could take some workers out of Jones Act coverage.  The Court stated that if the structure in question, is used to transport people or things over water, it is a vessel.  The “reasonable observer” test stated in Lozman creates a practical approach to look at borderline cases and does away with the “anything that floats is a vessel” approach taken by some jurisdictions.  At present, the case may only directly affect those workers on house boats or floating restaurants or businesses.  However, it remains to be seen how individual jurisdictions will use the Lozman case’s definition of “vessel” to—perhaps unintentionally—include more workers under the Longshore Act.    

 

By Tim Boykin, Attorney

 

I Would've Offered Light Duty, But I Fired Him . . .

As a result of the 2009 decision by the Virginia Court of Appeals in Shenandoah Motors, Inc. v. Smith, 53 Va. App. 375, 672 S.E.2d 127 (2009), the framework for challenging claims to post-termination partial disability benefits changed significantly. It used to be the case that in order to bar a claim to post-termination partial disability benefits, the employer was required to show the following:

                  (1)        that the employer made a bona fide job offer suitable to the employee’s capacity,

                  (2)        that the employer procured a job offer for the employee, and

                  (3)        that the employee unjustifiably refused to accept the job offer.

The court’s ruling in Shenandoah Motors amends the first requirement to allow an employer to effectively challenge a claim to post-termination partial disability benefits by showing that the employer would have made selective employment available during the post-termination period of the employee’s partial disability but for the employee’s termination for cause from full-duty employment after suffering a compensable injury.

 

In other words, an employer may now bar a claim to post-termination partial disability benefits by establishing constructive refusal of selective employment by the employee—i.e., that the employee’s post-injury amounted to refusal of an offer of selective employment, even in the absence of an actual bona fide offer of selective employment by the employer.

An employer may establish constructive refusal of selective employment by showing that it would have offered the employee suitable selective employment but for the employee’s termination for cause. In Shenandoah Motors, uncontradicted testimony stating that an offer of light-duty employment would have been made had the employee not been previously terminated for cause while working full-duty was sufficient for showing constructive refusal of selective employment. Still, the court noted that when challenging a claim to post-termination partial disability benefits based on an employee’s constructive refusal of selective employment, the employer must persuade the Virginia Workers’ Compensation Commission with a preponderance of the evidence that the employee’s actions amounted to constructive refusal of selective employment, even though the employer never made an actual bona fide offer of selective employment.

 

Employers may preemptively bolster their abilities to challenge claims to post-termination partial disability benefits based on constructive refusal of selective employment by notifying all employees of the availability of light-duty employment in the event of an injury, and of the requirements and protocol for requesting such employment. Employers might additionally remind all injured employees of the availability of light-duty employment. Such policies will likely strengthen employers’ claims, when challenging claims to post-termination partial disability benefits based on an employee’s constructive refusal of selective employment, that light-duty employment would have been made available but for the employee’s termination for cause.

Introducing Our New Commissioner . . .

A workers' compensation attorney out of Richmond has been elected to the Workers' Compensation Commission. R. Ferrall Newman will fill the now vacant seat, the one that is designated as the "neurtral" on the three-member Commission. He will join the designated "employer advocate," Commissioner Williams, and the designated "claimant advocate," Commissioner Marshall, for a six-year term beginning on March 1, 2013.

For more about Mr. Newman's background, check here.

We will keep you posted on the trends and tenadancies of the new panel in due course.

The Surveillance Chronicles

Whether or not to incur the expense of surveillance in a workers' compensation case is a difficult question. Even if you feel it in your adjuster gut that this claimant is faking, catching the fraud on video is another matter. And even if you do get video of the claimant carrying groceries in violation of her 10 pound lifting restriction, often times doctors are still reluctant to remove the restrictions - this phenomenon is worthy of its own post to come later. So the question remains, does surveillance work and is it worth the cost?

 

I am a believer in the use of surveillance in many situations. But only if done right; otherwise it can be a huge wast of time and money. So, from time to time, I will be posting stories of some successful surveillance, and some not to successful attempts. Maybe we can hone in on a pattern of what works and what doesn't to improve the effectiveness of our surveillance attempts. Here's one to get us started.

 

Bay Area Woman's Sex Act Reveals Workers' Comp Fraud. Here, a woman with an ankle injury was caught by investigators tossing her crutches in the car, running through the park, and performing oral sex on her boyfriend in the park. Not only were her benefits terminated, she was prosecuted by the state for fraud - sentenced to nine months in jail and ordered to pay more than $79,000 in restitution.

 

Surveillance - 1; Fraud - 0 . . . but who's keeping score? Ummm, we are.