If an employer can video a claimant, show it to a hired IME doctor, elicit an opinion that an injury has “resolved”, deny treatment, and thereby effectively eliminate the claim, the medical evidence relied upon should be held to a higher standard than stated by the court.  I don’t know what really happened in this case.  Perhaps the claimant’s shoulder problem (presumably a rotator cuff tear) had completely resolved (which is unusual with this type of injury), but the fact pattern of this case is common, which makes this decision even more disturbing.  Also — Per Curiam – not a single dissent.

I want to now address the issue of aggravation of a pre-existing condition.

A pre-existing condition is of course a condition or diagnosis that was present prior to the date of injury.  The issues are what happens when an injury at work aggravates the pre-existing condition and what must be shown to achieve allowance of the pre-existing condition on the basis of aggravation.

SB 7 which became law in 2006 changed the definition of injury with regard to aggravation of a pre-existing condition.  The revision was a response to the Supreme Court of Ohio’s decision in 1990 in Schell v. Globe Trucking, Inc. (1990), 48 Ohio St.3d 1.  In Schell, the court held that an injured worker need only show any aggravation of a pre-existing condition, even a slight aggravation, and that the aggravation need not “be of any particular magnitude.”

Under SB 7, the rules relating to substantial aggravation were changed significantly.  The new definition of injury [set for in Section 4123.01(C)(4) now provides:

“Injury” includes any injury, whether caused by external accidental means or accidental in character and result, received in the course of, and arising out of, the injured employee’s employment. “Injury” does not include:

A condition that pre-existed an injury unless that pre-existing condition is substantially aggravated by the injury. Such a substantial aggravation must be documented by objective diagnostic findings, objective clinical findings, or objective test results. Subjective complaints may be evidence of such a substantial aggravation. However, subjective complaints without objective diagnostic findings, objective clinical findings, or objective test results are insufficient to substantiate a substantial aggravation.”

In addition, on May 13, 2009 the Industrial Commission issued Memo A5 setting forth their policy and interpretation for hearing officers on the issue of substantial aggravation.  This memo provides the following:

“On or after August 25, 2006, when allowing a claim for substantial aggravation of a pre- existing condition, the hearing officer must cite in the order evidence which documents the substantial aggravation by objective diagnostic findings, objective clinical findings, or objective test results. The determination as to whether a "substantial aggravation" has occurred is a legal determination rather than a medical determination. Therefore, while it is necessary that a hearing officer rely on medical evidence which provides the necessary documentation pursuant to the statute, it is not necessary that the relied upon medical evidence contain an opinion as to substantial aggravation.”

This means that a doctor’s report and opinion does not need to contain the specific words “substantial aggravation”.  This issue is a legal determination based upon all of the evidence regardless of whether the term “substantial aggravation” is present in the causal relationship opinion.

To date, there has been only one published court decision addressing the issue of substantial aggravation.  In Smith v. Lucas County, which is a 6^th District Court of Appeals case, (6th Dist. No. L-10-1200, 2011-Ohio-1548) – the claimant sought additional allowance for aggravation of a pre-existing cervical disc condition. The condition was disallowed by the Industrial Commission and the claimant appealed into common pleas court.  The trial court granted the employer's motion for summary judgment, meaning the employer won the case, finding that there was no pre-injury diagnostic evidence to compare to a post-injury MRI and therefore the claimant failed to prove a "substantial aggravation" under the new statute.  The claimant then appealed to the Sixth District Court of Appeals.  That court affirmed the trial court's decision, but noted that if the claimant had provided sufficient documentation of her symptoms preceding the injury, substantial aggravation could have been established.  The court stated that such evidence would not necessarily require objective "before" and "after" findings or results.

In the Lucas case, the claimant provided only the treating physician’s affidavit and chart notes which he specifically stated were based on the history which the claimant related to him.  The court noted that the claimant failed to provide any information such as records or a statement from her prior physician and that the [post-injury] MRI revealed only the existence of [the condition] and provided an explanation for the claimant’s current symptoms.  This post injury testing did not establish that the condition was substantially aggravated by the injury because there apparently was no pre-injury information to establish the claimant’s baseline condition.

The Lucas case is a poor beginning, I feel, to the interpretation of “substantial aggravation.”  It is unclear exactly what evidence was adduced in support of the claimant’s position. The court’s opinion is lacking in this respect.  For example, did the treating doctor’s affidavit state that there were no pre-injury symptoms (asymptomatic pre-injury condition).  Or,  was it that the pain was greater after the injury as compared to before the injury?  And, what exactly was the “history which the claimant related to her doctor”?  We really do not know the answers to any of these questions, which makes the decision ambiguous and imprecise.

The encouraging aspect of the Lucas case is the court’s finding that objective “before” evidence is not necessary (meaning objective evidence such as an x-ray or MRI taken prior to the date of injury).  Rather any evidence showing the pre-injury status of the condition in question is sufficient.  Based on the language of the opinion, this pre-injury evidence could take the form of medical records or a physician’s opinion. However, the court made it clear that silence on the issue will not work.

Keep in mind that the statute identifies three types of evidence which can provide the objective support for a substantial aggravation: 1) diagnostic findings; 2) clinical findings; or 3) test results. The statute does not say “and” – it says “or”. Thus, any of these three can provide the required proof.  Moreover, nothing in the statute requires pre and post injury comparisons.  However, as the Lucas court noted, there must be some evidence to describe the pre-injury status of the condition because there is no other way to determine whether a substantial aggravation occurred without knowing the pre-injury, baseline status of that condition.

I am sure that there will be many more decisions on this issue in the future as this is certainly a hot issue and an evolving area of Ohio workers’ compensation law.

When an injured worker settles his or her workers’ compensation claim the interests of Medicare must be protected with regard to conditional payments of medical bills made by Medicare to medical providers for treatment of the allowed conditions prior to the settlement.  Medicare’s interests must also be protected with regard to future payments to medical providers for treatment of the allowed conditions.   Stated differently, if Medicare has paid or pays in the future medical bills for treatment of the allowed conditions, Medicare wants its money back. The problem is how to best accomplish this in the context of complex and ever changing rules from the Centers for Medicare & Medicaid Services (CMS), which is the federal agency responsible for enforcing the Medicare Secondary Payer Act, 42 U.S.C. § 1395y(b)(2).

In the context of Ohio workers’ compensation claims, the Medicare Secondary Payer Act prohibits Medicare from paying for an injured worker’s medical services for treatment of the allowed conditions in claims where payment has been made or can reasonably be expected to be made by the Ohio Bureau of Workers’ Compensation (BWC) or by an Ohio self-insured employer.  In such cases Medicare is considered the “secondary payer” and the BWC (or self-insured employer) the “primary” payer.  There is an exception to this prohibition.  The Medicare Secondary Payer Act permits “conditional” payments for medical treatment of conditions covered by or likely to be covered by a workers’ compensation claim in situations where the payment for medical services under the workers’ compensation claim cannot be expected to be made promptly.  When conditional payments have been made by Medicare, the BWC or self-insured employer must reimburse Medicare when the workers’ compensation claim is allowed.  At that point the BWC or self-insured employer becomes the primary payer with respect to past and future medical bills for treatment of the allowed conditions.

 The Medicare Secondary Payer Act permits legal action by the United States against any and all entities (which include the Ohio BWC, self-insured employer, attorneys, and third party administrators) that are or were required or responsible to reimburse Medicare for payments made for treatment of the allowed conditions in a workers’ compensation claim. C.F.R. § 411.24 provides that CMS has a direct right of action to recover from any entity responsible for making primary payment.  This includes “an employer, an insurance carrier, plan, or program, and third party administrator.”  This enforcement provision has created a nightmare of fear, red tape and months of delay involved with CMS in determining whether Medicare has made conditional payments for the allowed conditions in a workers’ compensation claim and notifying the parties involved in the settlement of the workers’ compensation claim.  If conditional payments were made by Medicare, the BWC or self-insured employer must reimburse Medicare before the settlement of the workers’ compensation claim is approved.

 What Are Medicare Set-Aside Arrangements (MSAs)?

 The device currently being used to protect the interests of Medicare with regard to payments to medical providers for treatment of the allowed conditions after the workers’ compensation claim is settled is called a Medicare Set-Aside Arrangement or Medicare Set-Aside Trust, both referred to as an MSA.  In an MSA the parties (BWC or self-insured employer and injured worker) agree to “set aside” a portion of the settlement funds to be used solely for payment of medical bills for treatment of the allowed conditions in the workers’ compensation claim.  The amount of money to be placed in the MSA and designated as such in the settlement agreement is negotiated by the parties based upon a reasonable projection of the amount necessary to cover medical expenses that would have been paid by the BWC or self-insured employer for treatment of the allowed conditions had the workers’ compensation claim not settled.  With regard to such future payments, Medicare is still considered a secondary payer until such time as the funds placed in the MSA are exhausted by payment of medical bills for treatment of the allowed conditions.  When the MSA is exhausted Medicare becomes the primary payer and will pay for all medical services.

 Prior to May 11, 2011, certain workers’ compensation MSAs required approval by CMS.  Approval was required when (1) the claimant is currently a Medicare beneficiary and the total settlement amount is greater than $25,000; or (2) the claimant has a “reasonable expectation” of Medicare enrollment within 30 months of the settlement date and the anticipated total settlement amount for future medical expenses and disability/lost wages of the life or duration of the settlement is expected to be greater than $250,000.

 Under CMS Memorandum Q2 dated 04/21/2003, an individual has a “reasonable expectation” of Medicare enrollment if any of the following situations apply:

(1)   The individual has applied for Social Security Disability Benefits;

(2)   The individual has been denied Social Security Disability Benefits but anticipates appealing that decision;

(3)   The individual is in the process of appealing and/or re-filing for Social Security Disability Benefits;

(4)   The individual is 62 years and 6 months old (i.e. may be eligible for Medicare based upon his/her age within 30 months); or

(5)   The individual has End Stage Renal Disease (ESRD) condition but does not yet qualify for Medicare based upon ESRD.

 On May 11, 2011, CMS issued a memorandum modifying its position and stating that submission of a workers’ compensation MSA proposal to CMS for review and approval is a “recommended” process and that “there are no statutory or regulatory provisions requiring that a WCMSA [workers’ compensation MSA] proposal be submitted to CMS for review.”  The foregoing thresholds requiring CMS approval were changed to “criteria for review” that CMS will employ when deciding whether to review an MSA proposal submitted by the parties to a workers’ compensation claim settlement.  The May 11^th memorandum stated specifically that “[t]he CMS no longer reviews new WCMSA proposals if the above thresholds are not met.”  The memorandum cautioned, however, that the thresholds reflect a CMS “operational workload standard” and should not be considered a substantive dollar or “safe harbor” threshold.  Since the issuance of the May 11, 2011 memorandum, there have also been two federal district court decisions in which both courts held that CMS approval of an MSA was not a condition or requirement of a settlement of a workers’ compensation claim.  See, Schexnayder v. Scottsdale Insurance Company, 2011 U.S. Dist. LEXIS 83687 (July, 29, 2011) and Smith V. Marine Terminals of Arkansas, 2011 U.S. Dist. LEXIS 90428 (August 9, 2011).

 Is an MSA Required in Your Workers’ Comp. Settlement?

 Medicare’s interests must be protected in every workers’ compensation settlement.  This presupposes that Medicare has an interest.  If you are not a Medicare beneficiary and have no expectation of enrolling in Medicare within 30 months of the date of the settlement, then there is no need for an MSA.  However, if you are already a Medicare beneficiary or have a “reasonable expectation” of enrollment in Medicare within 30 months of the date of your settlement, then you must have an MSA.  If an MSA is required and the settlement is greater than $250,000, or if you are a current Medicare beneficiary and the settlement is greater than $25,000, then submission of the MSA proposal to CMS for review is recommended although not required.  Submission of the MSA proposal for review will delay the settlement process for several months.

 How is the MSA Administered?

 At the time of settlement MSA funds should be set-aside in an interest bearing account and not comingled with other funds or bank accounts. The injured worked can self-administer the MSA account or have the MSA account professionally administered. An annual report or accounting must be made to CMS documenting that MSA funds were used to pay only for Medicare covered medical services and prescription drugs related to the allowed conditions in the settled workers’ compensation claim.

 The MSA may be funded in lump sum or annuitized. A structured MSA using an annuity normally reduces the cost of the MSA (the lump sum paid to the annuity company is generally lower than the lump sum placed in an interest bearing account).  As noted above, CMS becomes primary payer after the entire MSA account is properly exhausted. If the MSA is funded with an annuity, CMS becomes primary payer in any year that the fund is exhausted and CMS remains primary payer until the next annuity payment is received.

 If the injured worker is competent and able to direct and handle finances and medical bills, a self-administered MSA is a valid option in an Ohio workers’ compensation settlement.  The injured worker who self-administers must adhere to the administration rules and understand all obligations. He or she must comply with the following:

(1)  Place funds in an interest bearing account where funds can be separately accounted for (apart from checking and savings); (2) understand that the funds may only be used to cover future medical expenses for the treatment of the allowed conditions in the workers’ compensation claim which would normally be covered by Medicare; (3) become knowledgeable about what Medicare will and will not cover; (4) administer the MSA as it was written and presented to CMS; (5) ensure appropriate charges for treatment of the allowed conditions are paid from the MSA and not billed to Medicare; (6) report annually to Medicare (and keep accurate records of payments made from the account) so that Medicare can monitor expenditures and will commence payment for covered services when the MSA account is exhausted; (7) understand primary payer obligations in structured MSAs.  As noted above, if the MSA is funded with a yearly annuity, Medicare becomes primary payer in any year that the account becomes temporarily exhausted and until the next annuity payment is provided. If funded in lump-sum, then Medicare is primary payer at exhaustion of the account.  If it is too complex for the injured worker to administer his or her MSA, professional administration is available to accomplish all of the above.

 Attorney Fees

 In Ohio attorneys for injured workers are normally paid a contingent fee on settlements of workers’ compensation claims.  The attorney fee (typically between 25 percent and 40 percent) is charged on the gross amount of the settlement.  The question has been raised as to whether an attorney can charge a contingent fee on the medical portion (MSA portion) of the settlement.  In Ohio there is no prohibition on an attorney charging a contingent fee on the medical portion of a settlement.  Rule 1:5 of the Rules of Professional Conduct permits a reasonable contingent fee with no restriction regarding the medical portion of a settlement. At least one court decision directly addressed this issue. In Hinsinger v. Showboat Atlantic City, 2011 N.J. Lexis 96 (January 21, 2011), the issue was whether the CMS regulations and directives permit an attorney to recover fees for a judgment or settlement obtained on behalf of a client from the Medicare set-aside itself.  The court held that the attorney could recover fees from the MSA.  The court recognized the value of the legal services of the attorney in achieving the entire settlement including the MSA portion of the settlement.  Keeping in mind that the attorney fee must be reasonable, I have been unable to find any prohibition to an attorney charging a contingent fee on the MSA portion of an Ohio workers’ compensation settlement.

 Conclusion

 The settlement of any workers’ compensation claim is complicated.  When Medicare is involved, the settlement is oppressively complicated.  Therefore, when Medicare is involved and an MSA is needed, I strongly advise that all injured workers confer with an attorney prior to attempting to settle a workers’ compensation claim.  The rules and directives from CMS are subject to change at any time.  Determining the amount of a settlement to be allocated to an MSA is a complicated process and involves negotiation.  Legal advice and representation by a qualified workers’ compensation attorney is therefore indispensable in achieving a correct result.

See, State ex rel. Lackey v. Indus. Comm., 129 Ohio St. 3d 119, 2011-Ohio 3089.

Comment

Historically, if an injured worker retired due to injury-related considerations and later had surgery based upon the allowed conditions, temporary total compensation was payable.  There was no requirement that the injured worker show that he had not abandoned the entire workforce.  In Lackey the injured worker was unable to show that his retirement was injury-related and therefore the requirement that he also show that he had not abandoned the entire workforce was not at issue.  Even so, the court stated that such a requirement exists.  This represents a significant change in the prior standard regarding injury-related retirement.

Advice

If you voluntarily retire for non-injury related reasons you will not be entitled to temporary total disability compensation for a post retirement injury-related period of disability unless you have returned to the workforce prior to the period of disability.

If you retire for physical reasons related to your work injury you will be entitled to temporary total disability compensation for a post retirement injury-related period of disability even if you have not returned to the workforce provided that you can show that you have not permanently abandonded the entire workforce.  Presumably, this will require that you submit to the BWC and Industrial Commission evidence that you have been seeking employment.  At the time of your injury-related retirement, you want to be sure to have medical evidence that your retirement was in fact precipitated by physical problems related to your work injury.

While the failure of a worker to report a work injury to the employer will not necessarily result in the denial of the related workers’ compensation claim, the timely and accurate reporting of a work injury will eliminate issues that may defeat a valid claim.

Example

I represented a middle aged injured worker who sustained a sprain to his right shoulder and contusion to his right hip when he slipped on ice and fell in his employer’s parking lot while leaving work.  There were no witnesses.  Rather than returning to the plant to report the injury, he went home and treated himself with over the counter pain medication. The following day his right shoulder continued to bother him. By the end of his shift, he realized that he was genuinely injured and decided to seek treatment.  He would have reported the injury at that time, but his supervisor had already gone home.  The following morning, he verbally reported the injury to his supervisor.  He was sent to an Urgent Care for treatment and related his slip and fall in the employer’s parking lot.  He also related that he previously had been treated for right shoulder pain that his family doctor attributed to arthritis. He was eventually diagnosed with a torn rotator cuff and required surgery.  The employer defended the workers’ compensation claim on the basis that the injured worker did not report the injury in a timely manner, that there were no witnesses, and that his right shoulder problems were pre-existing and unrelated to any alleged work injury.  After a series of hearings and appeals, the claim was allowed.  However, had the injured worker reported his injury right away, his claim would have been routinely approved and the hearing process avoided.

Discussion

When you sustain an injury at work, you should report your injury and exactly how it occurred to your employer or supervisor as soon as possible.  The longer that you delay in reporting your injury, the more questions can be raised.  If your employer has a policy for reporting injuries, you should follow the policy, including completing an incident report.  Even if you do not feel as though you were seriously injured, you should still report the incident.  Symptoms may not become acute for several hours.  One of the most common mistakes made by injured workers, as demonstrated in the above example, is failing to report sprain/strain injuries that occur near the end of the workers’ shift.  In such cases, the worker believes that the sprain/strain is minor and can be self treated at home. What often happens, however, is that within the next few hours, symptoms become acute.  When the injury is reported the next day, the employer will question whether the injury occurred at work and will often reject the claim for that reason.  If the injured worker had problems in the injured body part prior to the work injury, the delay in reporting the incident before the end of the shift becomes even more of a problem. In such cases, it can be extremely difficult to prove that the strain/sprain injury occurred at work rather than being a continuation or flare-up of the prior condition.

Advice

Always report your work injury to your employer accurately and as soon as possible.  Follow all employer policies regarding reported a work injury.

In State ex rel. Mast v. Industrial Commission, 2011-Ohio 2865 (Tenth District), decided June 14, 2011, the court answered in the affirmative.

Facts

The injured worker sustained traumatic loss of her left thumb, left index finger, and left long finger in a workplace injury.  She was compensated under R.C. 4123.57(B) for a scheduled loss award equivalent to her entire left hand because of the loss of two or more digits on the same hand.  The injured worker’s physician obtained authorization to surgically transplant her left great toe to her left thumb to improve the function of the left hand.  The left great toe was subsequently amputated and transplanted to create a new left thumb.  The claim was amended to allow “amputation of left big toe”, and the administrative order allowing this additional condition was not appealed.  The injured worker thereafter filed for a scheduled loss of the left great toe under R.C. 4123.57(B) since she was now missing her left great toe.  The Industrial Commission denied the scheduled loss of the left great toe, and the injured worker appealed.

Court’s Analysis

The court discussed State ex rel. Qiblawe v. Indus. Comm., 96 Ohio St.3d 347, 2002-Ohio-4759 as the precedent cited for denying the scheduled loss of the great left toe.  In Qiblawe the injured worker had her index finger surgically transplanted to the site of another finger that had been lost due to an industrial injury.  Although Qiblawe involved two amputations, the court found that the injured worker was entitled to only one amputation award because the surgically amputated finger was transplanted with successful functionality and only one digit was lost.  The Qiblawe court cited State ex rel. Welker v. Indus. Comm., 91 Ohio St.3d 98, 2001-Ohio-292, in which the injured worker’s thumb was completely severed and then successfully reattached.  The issue in Welker was whether the scheduled loss should be determined as of the time of the injury or from the point of reattachment and recovery.  The Welker court held in favor of the latter view.  Applying Welker to the instant case, the court found the facts distinguishable from Qiblawe in two respects.  First, the injured workers’ amputations involved two different extremities, and second, she was not separately compensated for the loss of her thumb.  The court held that under the Welker rationale the injured worker is entitled to a scheduled loss for both the loss of her two fingers on her left hand and the loss of her great left toe because she is missing these digits after reattachment and recovery.

Comment

While this decision is favorable to the injured worker, it appears that the court was incorrect in finding that the claimant had not been compensated for the amputation of the thumb because the scheduled loss of the thumb was a component of the scheduled loss award for the entire loss of the left hand.  Moreover, like Qiblawe, the injured worker in the instant case had two amputations (the left thumb and left great toe) but only the loss of one of those digits – the left thumb.  This is a confusing decision and an issue that perhaps needs clarified legislatively.

Background

In a line of cases involving the surgical replacement of a natural lens or cornea due to a workplace injury, the Ohio Supreme Court consistently held that the injured worker was entitled to compensation under R.C. 4123.57(B) for total loss of vision.  See, State ex rel. Kroger v. Stover (1987), 31 Ohio St.3d 229; State ex rel. Gen. Elec. Corp. v. Indus. Comm., 103 Ohio St.3d 420; State ex rel. AutoZone, 117 Ohio St.3d 186.  See also, State ex rel. Parsec, Inc., v Agin, 155 Ohio App.3d 303.  In such cases, the court found that “loss of uncorrected vision” as used in R.C. 4123.57(B) meant loss of vision prior to correction by the surgical replacement of a natural lens or cornea.  Thus, injured workers were always entitled to a total vision loss award in any case where the natural lens or cornea was replaced.  In each of those cases, however, the total vision loss existed prior to the transplant procedures.  Breaking with the precedent established in the above line of cases, the court used this distinction to deny total vision loss in State ex rel. Baker v. Coast to Coast Manpower, LLC, 2011-Ohio-2721, decided June 9, 2011.

Facts

In the Baker case, the injured worker Baker was struck in the right eye by a piece of metal and subsequently developed a traumatic cataract necessitating surgical replacement of the natural lens.  Baker filed a motion with the BWC for loss of vision of the right eye under R.C. 4123.57(B) based on the cataract surgery in which his natural lens was removed and replaced by an implant.  However, prior to the surgery Baker’s loss of uncorrected vision was 20/25, and after the surgery his vision returned to 20/25, which equated to an eight percent of uncorrected vision and less that the minimum twenty-five percent uncorrected vision loss required for any loss of vision award under R.C. 4123.57(B).  The Industrial Commission denied Baker’s motion and found that Baker had sustained only an eight percent loss of vision.  Baker filed a complaint in the Tenth District Court of Appeals for a writ of mandamus ordering the Industrial Commission to grant his request for compensation for a total loss of vision.

Court’s Decision

The court held that since Baker’s uncorrected loss of vision never reached the minimum twenty-five percent prior to the lens replacement surgery or after the surgery, he did not qualify for any vision loss award.  The court rejected Baker’s argument that the removal of the natural lens results in the loss of sight. The court stated that this bright line approach disregards the plain language of R.C. 4123.57(B) which requires a loss of sight of an eye for the employee to be entitled to compensation.

A forceful dissenting opinion was written by Justice McGee Brown noting that the court was breaking with precedent and ignoring the court’s prior holdings in which lens replacement surgery was considered “corrective” rather than “restorative” thereby entitling the injured worker to the vision loss award.  Justice McGee Brown further correctly noted that had Baker delayed his surgery until his natural lens became opaque and obscured his sight, then he would have qualified for the total vision loss award under the majority’s analysis thus creating an incentive for injured workers to delay necessary medical treatment.

Comment

This is an unfortunate decision for injured workers who require lens replacement surgery who must now presumably wait until the vision loss progresses to a total vision loss to qualify for a vision loss award.  For a 2011 claim this award is $97,875.00.