At Bleakley Cypher , we believe we have an obligation to highlight the most recent and hottest topics involving Michigan Workers' Compensation and Employment Law. We know the high level of sophistication of our clients and the need to stay up to date on case law that impacts the daily work load. For that reason, we summarize important decisions that impact the Michigan Workers' Compensation Defense practice. We explain the significance of the case holding and provide practical advice.
Michigan Supreme Court Refines "Reasonable and Necessary" Medical Expenses (posted 8/2/11)
The Michigan Supreme Court recently refined the requirements for a "reasonable and necessary" medical expense. (Krohn v Home-Owners Insurance Company, -- NW 2d --, 2011; 2011 WL 3241622). The claimant was partially paralyzed after a severe motor vehicle accident. The claimant decided to pursue an aggressive and admittedly experimental surgery in Portugal. The surgery removed stem cells from the claimant's sinus cavities and transplanted the cells directly onto the injury site. The intended benefit would be that the stem cells would alter their composition to develop into spinal nerves thereby restoring some function to the claimant's spine.
This surgery was admittedly experimental; it has not currently been approved in the United States and has not undergone FDA testing. Despite the insurance company's refusal to cover the surgical expenses, the claimant traveled to Portugal where he underwent this surgery.
The Supreme Court held that when a medical procedure or treatment is experimental and not generally accepted in the medical community, the plaintiff must present "objective and verifiable" medical evidence establishing that the treatment or procedure was "in any way efficacious in plaintiff's care, recovery, or rehabilitation." "A treatment or procedure that has not been shown to be efficacious cannot be reasonable or necessary . . . ."
This case was decided under the strict parameters of the No-Fault Act, but could logically be applied to any case where the reasonableness of a medical expense is being challenged.
A Changing Paradigm - Partial Disability (posted 8/2/11)
The Michigan Supreme Court recently issued several Orders which could impact the analysis of disability in a very significant way. Historically, the definition of disability has focused on the inability to earn maximum wages - based on work history and training. Thus, applying the maximum wage earning analysis, if a worker is off work and only partially disabled but we are unable to identify any potential available jobs which would pay maximum wages, the current state of the law mandates exposure for full wage loss benefits. This remains true even if there are jobs available where the injured worker could be earning less money.
The recent Orders from the Michigan Supreme Court will seemingly allow defendants to take credit for what an injured worker could theoretically be earning, even if the potential job paid far less than the worker's average weekly wage, or if he or she was overqualified for the position.
While an Order does not carry the full weight as a formal decision from the Supreme Court, these Orders nevertheless provide a glimpse into the changing paradigm of disability in Michigan. It is reasonable to infer that if fully decided by the Supreme Court the decision would allow for some type of a partial disability offset.
Rarely Used Provision May Provide Substantial Savings for Insurance Carriers in Workers' Compensation Cases (posted 6/8/11)
A rarely enforced provision of the Health Care Service Rules provides a means for insurance carriers to greatly reduce prescription drug expenses. Rule 418.10912(2) of the Health Care Service Rules states that "[w]hen a generic drug exists, the generic drug shall be dispensed. When a generic drug does not exist, the brand name drug may be dispensed. A physician may only write a prescription for "DAW", or dispense as written, when the generic drug has been utilized and found to be ineffective or has caused adverse effects for the injured worker. A copy of the medical record documenting the medical necessity for the brand name drug shall be submitted to the carrier." (emphasis added).
The ramifications of this allow the insurance carrier to refuse to pay for name brand medication if a generic is available unless the prescribing physician has determined (with written documentation) that the generic is "ineffective" or results in "adverse effects."
MSPRC's Suspension of Rights and Responsibility Letters and Final Demand Letters (posted 6/8/11)
Recently, the Federal District Court of Arizona held that the Medicare Secondary Payor Recovery Contractor's ("MSPRC") conditional payment recovery procedures were contrary to the language of the Medicare Secondary Payor ("MSP") statute. Haro v Sebelius, CV 09-134 TUC DCB Fed. D. Az. The Court found that the MSPRC's requirement that the final demand letter amount be paid prior to the exhaustion of the waiver and appeals period is contrary to the MSP statute. The Court also ordered that the MSPRC cannot seek direct recovery from the plaintiff's attorney for the conditional payment funds.
It is important to note that this order has limited precedential value because this decision was rendered at the trial court level (district court). Moreover, the order addresses two very specific issues: 1) the MSPRC's right to charge interest after a settlement demand letter is issued and 2) the right of the MSPRC to seek recovery from a plaintiff's attorney.
Regardless, this decision has resulted in a recent directive by the MSPRC to indefinitely suspend the issuance of "Rights and Responsibilities" and "Final Demand" letters. This will likely be a temporary suspension until the MSPRC can determine how to react to the Haro decision. In fact, the MSPRC now indicates that "Rights and Responsibilities" letters will again be issued starting June 10, 2011.
Appellate Commission Tightens Restrictions for Injury Related Wage Loss (posted 5/3/11)
In a decision recently issued by the Workers' Compensation Appellate Commission (Adkins v Asama Coldwater Manufacturing, Incorporated 2011 ACO #54) the WCAC affirmed a magistrate's decision denying ongoing wage loss benefits because the wage loss was not directly attributable to the work place injury.
In this case, plaintiff, Wesley Adkins, was injured when he was struck by a hi-lo. Pursuant to company policy, he was required to undergo a post accident drug screen. The test came back positive for cocaine, which claimant readily admitted to ingesting on the weekend before his work injury. After discovery of the positive drug test, the claimant was discharged pursuant to company policy. Accordingly it was argued that the claimant should not be entitled to ongoing wage loss benefits as his loss of income was not attributable to his work injury but rather his voluntary ingestion of cocaine.
The magistrate ultimately agreed the defendant's position and held that plaintiff's wage loss was not attributable to his injury. This was appealed and the Workers' Compensation Appellate Commission upheld the magistrate's decision stating that in order to be entitled to wage loss the plaintiff must establish a loss of wage earning capacity directly attributable to the alleged work injury. In this case, the voluntary ingestion of cocaine, albeit predating the alleged injury, was a sufficiently independent cause to terminate employment and refute the ongoing entitlement to wage loss.
Federal Judge held that Michigan's Medical Marihuana Act does not regulate private employment (posted 2/9/11)
In 2008 voters passed a referendum enacting Michigan's Medical Marihuana Act (MMMA) making it legal for qualifying patients to possess and use medicinal marijuana. After its approval, Joseph Casias, aged 30, applied for and received his medical marijuana card allowing him to possess and use medicinal marijuana to alleviate the symptoms of an inoperable brain tumor.
After suffering an on-the-job injury while working for Wal-Mart, Casias was required to submit for routine drug testing. After his test came back positive for marijuana he was terminated. This prompted Casias to take legal action against Wal-Mart; suing for wrongful termination on the basis that Wal-Mart's drug policies violated the MMMA. Casias v Wal-Mart, 2011 WL 487591.
The case was removed from the state court to the Federal District Court where Judge Robert Jonker heard arguments on Wal-Mart's Motion to Dismiss. Ultimately Judge Jonker dismissed the case and denied remand to the state court, holding that the MMMA's application was limited to protecting an individual from criminal prosecution and does not create a private cause of action.
The practical implications of this case affirm an employer's right to maintain a strict drug-free workplace.
Recoupment of Benefits from First-Party Litigation (posted 2/9/11)
A recent unpublished decision by the Michigan Court of Appeals opens the door for workers' compensation insurance carriers to assert a lien against proceeds a claimant receives from a first-party recovery. Hughes v. Shepler, Inc., 2010 WL 4226649 (Mich App).
In Hughes, the workers' compensation carrier voluntarily paid wage loss and medical benefits to an employee injured while working as a ship deckhand. While Plaintiff was receiving these benefits he filed an admiralty suit seeking available benefits under the Merchant Marine Act, 46 USC 30104 (The Jones Act).
The workers' compensation carrier learned of the admiralty suit and filed a lien seeking recoupment of the workers' compensation benefits it had paid. Plaintiff settled his admiralty suit, and in resolving the lien issue, the Court applied equitable principles barring double recovery and permitted the workers' compensation carrier to recoup a portion of the benefits paid.
Right of recoupment from third-party actions is well established in the workers' compensation arena; Hughes effectively extends that right of recoupment to proceeds of first-party settlements.
Seasonal Employment and Wage Loss (posted 2/9/11)
In a recent unpublished decision, Coleman v. Michigan Paving & Materials Co., 2010 WL 5094364 (Mich App), the Michigan Court of Appeals affirmed its prior holding that it is the plaintiff's burden to "show that he suffered wage loss that was causally linked to his work-related injury." See Romero v. Burt Moeke Hardwoods, Inc., 280 Mich App 1 (2008).
Coleman and Romero have particular relevance in the context of seasonal employment.
In Coleman, the Plaintiff (a construction worker) provided no evidence that his wage loss in the "off season" was attributable to any factor other than a typical seasonal layoff. The Court determined that, regardless of his injury, Plaintiff would not have been working for Defendant in the months Defendant does not perform road construction operations, and he offered no evidence that he would have been working elsewhere during that time. The Court determined Plaintiff failed to prove a causal link between his work-related injury and wage loss in the seasonal layoff months as required by Romero, and therefore, Defendant was entitled to a reduction in its liability for wage loss benefits during that period.
Coleman clearly affirms the proposition that a plaintiff will not be entitled to wage loss benefits merely by proving a disability. He must establish that the work cessation or reduction in wages is causally connected to the work-related disability.
To keep up to date contact our attorneys to learn more at 866-677-9243.
