OKLAHOMA WORKERS COMPENSATION UPDATE OKLAHOMA SENATE BILL 1062

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1 OKLAHOMA WORKERS COMPENSATION UPDATE OKLAHOMA SENATE BILL 1062 In May 2013 the Oklahoma Legislature passed Senate Bill 1062 and Governor Fallin signed a new Workers' Compensation Bill into Law. The Bill is an attempt to reform Oklahoma Workers' Compensation into an administrative system. As with most sweeping changes the new law raises a number of questions including how it will be applied, how claims under the old law will be handled, etc. There are also a number of questions regarding the constitutionality of portions of the new law. Below you will find a brief summary of significant changes to Oklahoma Workers' Compensation as a result of the new law. The majority of the new law is set to go into effect on February 1, 2014 and will apply to all claims with injuries dates of February 1, 2014 and after. We will continue to monitor and will advise when and if any constitutional challenges to the new law are filed with the Oklahoma Supreme Court. 1. DEFINITIONS, Sec. 2 Continuing medical maintenance Removed provision which allowed the court to award even when not recommended by treater or CIME. Course and scope of employment Now specific provisions regarding parking lot and injuries occurring on work breaks. Cumulative Trauma Directly/independently of all other causes and the employee shall have completed at least 180 days of continuous active employment with employer. Gainful employment Does not include part-time, occasional or sporadic employment but new statutes fail to define full-time or part-time employment. Major cause More than 50% of resulting injury, disease or illness. It must be established by a preponderance of the evidence. If the workplace was not the major cause of the injury, then Claimant does not have a cause of action outside of the Workers Compensation Act. Misconduct definitions Includes nine specific incidents of misconduct, ranging from unexplained absenteeism/tardiness to violation of a law. AMA Guides ALJ/Commission shall apply the most current version, which is the 6 th edition. Prior to this, Oklahoma used the 5 th edition. Surgery Injections still are not considered surgery. Common law spouse Found in Section 47 and pertaining to payment of death benefits There must be a court order finding common law marriage.

2 2. DISCRIMINATION/RETALITORY PROVISIONS, Sec. 7 This section notes that an employer may not retaliate or discriminate against an employee for: 1. A filed claim under this Act; 2. Retaining a lawyer for representation regarding a claim under this Act; 3. Instituted or caused to be instituted any proceeding under the provisions of this Act; or 4. Testified or is about to testify in any proceeding under the provisions of this Act. The Commission has exclusive jurisdiction to determine if a violation of this Section has occurred and may award back pay up to $100, The prevailing party can receive attorney fees and costs. Based on the wording of the statute, it is unclear if there remains a separate cause of action in district court for the wrongful termination of a Claimant during a period of temporary total disability for the sole reason of being absent from work or for the purpose of avoiding payment of temporary total disability benefits to the injured employee. 3. PSYCHOLOGICAL OVERLAY, Sec. 13 No mental injury/illness is compensable unless caused by a physical injury to the Claimant (unless arises out of an Act of violence), and diagnosed by licensed psychiatrist or psychologist. In addition, disability is limited to 26 weeks unless it is shown by clear convincing evidence that benefits should be continued but not to exceed 52 weeks. In addition, death within a year of original injury due to the consequential psychological overlay would allow claim for death benefits; if death is more than a year, then no compensable injury. 4. HEART ATTACKS/VASCULAR INJURIES, Sec. 14 The first two provisions are about the same, but now the provision finds physical/mental stress shall not be considered in determining whether the employee or claimant has met his/her burden of proof. The physical stress portion is not likely to withstand judicial review. 5. CREATION OF THE COMMISSION, Sec. 19 The Commission shall consist of three full time Commissioners with a minimum of three years of WC involvement. Said individuals are appointed by the Governor and confirmed by the Senate. One of the three has to be selected from a three person slate selected by the Speaker of the House. Commissioners are to serve six year terms and can be reappointed one time. Commissioners then appoint the Administrative Law Judges who must have been

3 licensed to practice law at least three years and have three years of OK WC experience. 6. THIRD PARTY CLAIMS, Sec. 43 and 44 The Carrier shall have 2/3 lien on net subrogation after reasonable cost of collection. It appears that the carrier has an absolute right to intervene and must intervene in third party case in order to protect its subrogation rights. Subrogation is allowed in death claims. Carrier can now file a subrogation claim on its own, but they will have to advise Claimant of said filing and provide any balance awarded above the subrogation amount to the Claimant. Need to advise Claimant of right to obtain private attorney. Carrier can go after Employers uninsured/underinsured motorist coverage. 7. TEMPORARY TOTAL DISABILITY, Sec. 45 There is a 104 week maximum for Temporary Total Disability (TTD) at 70% of Average Weekly Wage (AWW), not to exceed 70% of the state AWW. One 52 week extension if there is a consequential injury upon a showing of medical necessity by clear and convincing evidence. Can file to terminate TTD if claimant misses 3 consecutive appointments without valid excuse; Claimant can object within 10 days and hearing to be set within 20 days. Failure to have transportation to and from appointments is not considered valid excuse. 8. TEMPORARY PARTIAL DISABILITY, Sec. 45 Claimant can receive 70% of the difference between their light duty wages and his/her pre injury AWW. The total cannot exceed their TTD rate. 9. PPD AWARDS, Sec. 45 No Permanent Partial Disability (PPD) awarded to body parts which did not receive treatment. Except where a claim is Joint Petitioned, going back to Joint Petition term instead of compromise settlement, payment of PPD awards are deferred/held in reserve by the employer or insurance carrier. If the employee has reached Maximum Medical Improvement (MMI) and has been released to return to work and then returns to his preinjury or equivalent job for a terms of weeks determined by dividing the total dollar value of the PPD award by 70% of the employee s AWW (TTD rate) then reduce award by 70% of AWW (TTD rate) for each week the claimant works pre-injury job. If the claimant is terminated for misconduct while working post PPD award, the burden is on the employer to show the misconduct. If Employer proves misconduct, it affects payment of any balance of PPD order left after previously described reductions. If employee/claimant refuses the offer of work, the PPD order is deferred and reduced by

4 70% of AWW for each week the employee/claimant refuses. Claimant attorney fees for PPD is calculated upon total PPD award and paid in full at time of deferral. Overall this new provision reads if the Claimant returns to his job and works long enough his PPD award will eventually be reduced to zero although his attorney will get paid. Max PPD award is 350 weeks. 10. PREVIOUS DISABILITY, Sec. 45 Pre-existing impairment with same employer: Any award shall be reduced by current dollar value of percentage of permanent partial disability determined to be pre-existing. The current dollar value is calculated by multiplying the percent of the pre-existing PPD by the compensation rate in effect on the date of the accident or injury against which the reduction will be applied. Pre-existing impairment with different employer: Employer against whom benefits are being sought shall be entitled to a credit for the percentage of pre-existing permanent partial disability. 11. PERMANENT TOTAL DISABILITY, Sec. 45 Permanent Total Disability (PTD) shall be paid at 70% of AWW, but not in excess of state s AWW. Award shall be paid to employee until such time as employee reaches the age of maximum Social Security retirement benefits or for a period of 15 years, whichever is longer. Employee must annually file an affidavit under penalty of perjury stating that he or she has not been employed and is not capable of gainful employment. 12. VOCATIONAL REHABILITATION, Sec. 45 Long list of types of workers and specific injuries which create a presumption that vocational rehabilitation will be ordered. List includes injuries rarely ever seen (knee fusion) and provides for specifics like heel fracture for a roofer, but there is no mention of presumption of roofer tears, rotator cuff, etc. 16D benefits still exist for up to 52 weeks. If Claimant refuses training/services ordered or fails to complete in good faith the ordered training, in the discretion of the ALJ, the cost of the training can be deducted from any awards of benefits.

5 13. DISFIGUREMENT, Sec. 45 Disfigurement is still limited to $50, for serious and permanent disfigurement. However, no disfigurement awards for at least 12 months after injury date. Employee does not get disfigurement if he or she also receives PPD for the same body part. 14. DEATH BENEFITS, Sec. 47 If death does not result within one year from date of accident or within first three years of the period for compensation payments fixed by the compensation judgment, a rebuttable presumption shall arise that the death did not result from the injury. Common law spouse : Shall not be entitled to benefits unless court of competent jurisdiction rules that a common law marriage existed. 15. MEDICAL TREATMENT, Sec. 50 Employer must provide medical treatment within five days after actual knowledge of injury or the injured employee may select a physician to provide medical treatment at employer s expense. Emergency treatment may be provided at expense of employer if employer does not provide it. Employer must reimburse employee for actual mileage in excess of 20 miles roundtrip from employee s home to location of medical service provider. In no event shall the reimbursement of travel for medical treatment or evaluation exceed 600 miles roundtrip. Employee/Claimant to reimburse carrier/employer for missed appointment charges. Medical providers shall disclose any ownership interest in clinics, pharmacies, etc. 16. MEDICAL TREATMENT, Sec. 54 The ALJ can take into consideration if claimant refuses surgery when recommended by two qualified doctors when awarding PPD/PTD. 17. MEDICAL TREATMENT, Sec. 56 If employer provides medical services through a certified workplace medical plan, the employee may apply for a change of physician through dispute resolution in the CWMP.

6 If employer is not in a certified workplace medical plan, then the employee gets one change of physician. At that point, the employer provides a list of three physicians from whom the employee may select the replacement. 18. HERNIA, Sec. 61 Employee must prove it is a compensable injury by a preponderance of the evidence and meet a five factor test. If compensable, the injured employee shall be entitled to six weeks of TTD. If employee refuses hernia operation, said employee is entitled to 13 weeks of TTD in addition to appropriate medical care. If employee dies within one year as a direct and sole result of hernia or a radical hernia operation, dependents are entitled to death benefits pursuant to Sec SOFT TISSUE INJURY, Sec. 62 Soft tissue injury is defined as damage to one or more tissues that surround bones and joints, including sprains, strains, contusions, tendonitis and muscle tears. Cumulative trauma is a soft tissue injury. TTD shall not exceed 8 weeks, regardless of the number of parts of the body to which there is a nonsurgical soft tissue injury. If employee receives an injection, he or she gets an additional 8 weeks. An epidural steroid injection is not surgery. 20. OCCUPATIONAL DISEASE, Sec. 65 If occupational disease is aggravated by a non-compensable disease or infirmity, compensation shall be reduced and limited to the proportion only of the compensation that would be payable if the occupational disease were the major cause of the disability or death as the occupational disease, as a causative factor, bears to all causes of the disability or death. Causal connection between employment and occupational disease shall be established by a preponderance of the evidence. Last exposure rule applies.

7 21. NOTICE, Sec. 68 If employee does not give oral or written notice of injury within 30 days of injury, there is a rebuttable presumption that the injury was not work-related. The presumption must be overcome by a preponderance of evidence. If employee does not give oral or written notification of occupation disease or cumulative trauma injury within 30 days of leaving employment, there is a rebuttable presumption that the injury did not arise out of the course and scope of employment. The presumption must be overcome by a preponderance of evidence. 22. JOINT PETITOIN FOR SETTLEMENT, Sec. 87 If employer/employee wants to settle, they shall file a joint petition for settlement with the Commission. 23. STRICT CONSTRUCTION, Sec. 106 The provisions of the Act are to be strictly construed. 24. OKLAHOMA EMPLOYEE INJURY BENEFIT ACT, Sec Employer can elect to be exempt from the Workers Compensation Act and follow this Act instead. In order to elect into this Act, the employer must: a. Notify the insurance Commissioner and its employees; and, b. Establish a written benefit plan The written benefit plan basically must provide the same or better benefits than the Workers Compensation Act (Sec. 110 TTD, TPD, PPD, vocational rehabilitation, PTD, disfigurement, amputation or loss of use, death, etc.). The written benefit plan does not have to follow the Workers Compensation Act with respect to covered injuries, medical management, dispute resolution, funding, notices or penalties. Lump sum payouts are possible. Benefit plan provides benefits regardless of whether employee, employer or third party caused the injury. The benefit plan is the exclusive remedy unless the injury is the result of an intentional tort on the part of the qualified employer. Sec. 116.

8 Drug/alcohol use can totally bar benefits unless the employee can prove by a preponderance of the evidence that said drug/alcohol use was not the major cause of the injury. 25. WORKERS COMPENSATION ARBITRATION ACT, Sec Agreements to arbitrate claims are valid and enforceable if certain elements met, including, among other things, that the employer file an alternative dispute resolution program with the Commission and the employer s Certified Medical Plan file such a program with the Commission. Section 122. Act governs agreements to arbitrate made on or after February 1, Act can apply to agreements before that date if all parties agree in writing. Generally, if there are problems with the selection of an arbitrator or a dispute as to whether an arbitration is mandatory or not, the Commission resolves those issues. Sections The arbitrator has the power to hold conferences and hearings, determine the admissibility, relevance, materiality and weight of evidence, and ask witnesses questions during the proceedings. Section 136. The arbitrator has subpoena powers. Section 138. The arbitrator has the power to modify or correct the award under limited scenarios upon the motion of a party. Section 141. The arbitrator may award the benefits set forth in Sections 45, 46, 47 and 51 and may also award reasonable attorney fees and expenses if a party did not act in good faith throughout the arbitration. Section 142. The arbitrator s award shall set forth the facts and law justifying the award. Section 142. After an arbitrator s award has been issued, a party may request that the Commission enter a judgment confirming the award. Section 143. If there are problems with the manner in which the arbitration was conducted or if the award was procured by corruption, fraud, or other undue means, then a party may request that the Commission vacate the award. Section 144. Under certain conditions, the Commission shall modify or correct an award. Section 145. A confirming judgment (Section 143) may be recorded, docketed and enforced like any other judgment in the Commission s jurisdiction. Section 146.

9 A party can appeal the Commission decision to the district court where the arbitration hearing is to be held pursuant to the arbitration agreement or to the district court where the arbitration was actually held. Section ALTERNATIVE DISPUTE RESOLUTION, Sec. 153 The Commission shall develop an ADR program which affords an injured employee the right to obtain benefits by request or informal procedure. Participation in ADR is not a prerequisite to filing a claim for compensation. If the matter goes to mediation, the employer/insurer pay the mediator. 27. IMEs, Sec. 155 The Commission shall create a list of licensed physicians who shall serve as independent medical examiners. An independent medical examiner shall be certified by a recognized specialty board in the area or areas appropriate to the claim. The employer pays the cost of the IME. The opinion of the independent medical examiner shall be followed unless there is clear and convincing evidence to the contrary. 28. COMMUTATION OF BENEFITS, Sec. 159 PTD awards shall not be commuted. 29. INFO ABOUT PRIOR CLAIMS, Sec. 163 Employer can ask employee if he or she has ever had a workers compensation claim with a previous employer, subject to state or federal law. Sets forth procedure for obtaining information about prior workers compensation claims from the Commission. Disclaimer and warning: This information was published by McAnany, Van Cleave & Phillips, P.A., and is to be used only for general informational purposes and should not be construed as legal advice or legal opinion on any specific facts or circumstances. This is not inclusive of all exceptions and requirements which may apply to any individual claim. It is imperative to promptly obtain legal advice to determine the rights, obligations and options of a specific situation.

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