GQ Corner

Q. Can we still get an annuity to settle out death benefits to a widow?

A. Yes, DWC will still approve a properly filed request to pay benefits by annuity in a death case. It is not actually a settlement, but is a change in the payment period, coupled with a transfer of responsibility for payment to the annuity company. The Division has created the DWC-31 for that purpose. Remember that the carrier remains ultimately liable for the benefits if the annuity company folds. But there are significant protections that are in place to make sure that this won’t happen. First, you file your request with DWC and work with them to get it approved. If approved, you will ultimately convert the payment period to a monthly and arrange for payments from the annuity insurance company.

Q: There is an employee who was moving some spools of wire and sustained a dislocated shoulder when he tried to catch them as they began to tip over. He has tested positive for marijuana. How does that affect his claim? Can it be denied in its entirety because he tested positive for drugs or does some criteria need to be met in order to deny?

A: In Texas, if the employee was intoxicated at the time of the injury, that may be raised as a total defense to the claimant. Texas Labor Code section 406.032(1)(A). It does not matter whether intoxication played any role in the accident. It is total defense to the claim.

For marijuana there is no numerical test for intoxication, but rather the general definition of intoxication applies: “lack of the normal use of the physical or mental faculties” at the time of the injury. Tex. Lab. Code § 401.013.

It is often suggested that there is a shifting burden of proof. Once the carrier presents probative evidence that the IW may have been intoxicated, then the burden is said to shift to the IW to prove that they were not intoxicated. Further, if the carrier can present a post-injury urinalysis or blood test that shows intoxication, that evidence creates a rebuttable presumption that the IW was intoxicated. Tex. Lab. Code § 401.013(c).

So, the post-accident drug test does create a reasonable basis on which to dispute the claim based on an assertion that the IW was intoxicated at the time of the accident. You do need to specifically raise this affirmative defense in a PLN-11 with language such as, “Carrier asserts that it is relieved of liability under Tex. Lab. Code § 406.032(1)(A) because claimant was intoxicated at the time of the injury.”

Q: Carrier is paying pursuant to a “Not at MMI opinion” through the date of statutory MMI. On the date of statutory MMI, what is the Carrier supposed to do? Is the Carrier required to do anything? Is the Carrier required to make a reasonable assessment. Is the Carrier required to request a designated doctor exam?

A: Rule 130.2(e) controls. It says that you can do one of three things, or a combination of those three things:
1.            Do nothing,
2.            Request a DD, and/or
3.            Make a reasonable assessment of the IR and pay it within 5 days of making the reasonable assessment.
The Carrier should double check to ensure that the date of statutory MMI has been calculated correctly. Additionally, if the Carrier elects to make a reasonable assessment, it must actually be reasonable. Carrier should not be assessing a 3% for a lumbar sprain/strain because a 3% would never be awarded for this injury.

The Carrier is not required to do anything, but can choose to make a reasonable assessment or send Claimant to the DD if they want to.

Q: I have a question regarding the applicability of Insurance Code Sec. 1305.153(e) for extent of injury disputes.  The question is:

Is Sec. 1305.153 (e) only applicable if the carrier contests compensability of the injury (denial of a claim)?  Or does it also apply to disputes of extent of injury? 

The rule states an insurance carrier shall notify in writing a network provider if the carrier contests the compensability of the injury for which the provider provides health care services.  A carrier may not deny payment for health care services provided by a network provider before that notification on the grounds that the injury was not compensable.  Payment for medically necessary health care services provided prior to written notification of a compensability denial is not subject to denial, recoupment, or refund from a network provider based on compensability.  If the insurance carrier successfully contests compensability, the carrier is liable for health care provided before issuance of the notification required by this subsection, up to a maximum of $7,000.

The rule was previously interpreted for me to mean it applies to all compensability disputes (liability and extent of injury).  It was explained that because a network provider and carrier have a relationship through the carrier’s network contract, the carrier is basically not allowed to ambush the provider with a denial for entitlement or extent of injury prior to being notified of a compensability dispute.  I know TLC § 409.021 and §124.3(a) don’t apply to disputes of extent of injury, but does that mean a dispute of extent of injury is not a compensability dispute…

A: An extent of injury dispute is not a dispute regarding compensability. See the Supreme Court’s comments in Ayala (citing Lawton) below.

Unlike compensability, extent of injury disputes arise when the carrier believes additional conditions are unrelated to the compensable injury. Because this is an extent of injury dispute, section 409.021(c)’s sixty-day deadline does not apply, and Zenith “has up to forty-five days from the date it receives a complete medical bill to dispute whether [the] treatment [for the lumbar condition] was necessary.” Lawton, 295 S.W.3d at 650.

Zenith Ins. Co. v. Ayala, 325 S.W.3d 176, 178 (Tex. 2010)

I do not believe that Sec. 1305.153(e) is applicable to a dispute regarding compensability. In other words, the $7,000 payment obligation is only applicable to cases where compensability is disputed.