J. Steven Collins; steve@bcnattorneys.us
Ron C. Newcomb; ron@bcnattorneys.us
In the following portions of this summary, references to the Tennessee Workers’ Compensation Law, Tenn. Code Ann. § 50-6-101, et seq., will be made to the applicable subsection (§____). Some of the highlights of the 2004 Amendments are as follows:
1.Administrative Exhaustion.
Section 225(a) which deals with the procedure for filing civil actions for workers’ compensation benefits was amended. It now provides that the parties must first submit the dispute to a benefit review conference/mediation before filing in court. Also, the statute removes our Criminal Courts of record as a possible venue for workers’ compensation actions. The proper courts for filing of workers’ compensation actions after administrative exhaustion are now limited to the Circuit or Chancery Court in the county in which the employee resides or where the injury occurred. If the accident occurs outside of the State of Tennessee and the employee also resides outside of the State of Tennessee, then the action can be filed where the employer maintains an office. Another amendment further authorizes the specialist, at the request of either party, to make referrals to a designated attorney within the Department of Labor and Workforce Development who will have the authority to issue subpoenas or order discovery in the same manner as an Administrative Judge and prior to the mandated mediation. This statute is said to take effect for injuries occurring on or after July 1, 2004. Note the inconsistency of the effective date of this provision when compared to the effective date of the new statute of limitations measured from a point after an unsuccessful benefit review conference/mediation, which provisions are said to become effective January 1, 2005.
section 239 is amended to provide additional guidelines for the scheduling of benefit review conferences/mediations. The Department of Labor is to coordinate with the parties to schedule a convenient date and to schedule it within 45 days of the request. In the event that the DOL does not provide a date within 60 days, the parties may hire a private Rule 31 mediator to conduct mediation. However, any agreement reached through the services of a Rule 31 mediator must still be approved by a court or the Department of Labor. This provision is effective for injuries occurring on or after July 1, 2004.
2.Advisory Council.
Section 121 involves the Workers’ Compensation Advisory Council. The Legislature has directed the Council to review the definition of “injury” and “personal injury” as they are contained in the definitional section of the law. The Council is to make its recommendations for further change in the law on or before December 1, 2004. During this past legislative session, there was discussion about a further tightening of the law to eliminate altogether certain repetitive motion injuries and/or aggravation of pre-existing injuries from the workers’ compensation system.
3.Case Management.
Section 123 was amended to eliminate mandatory case management. Effective July 1, 2004 employers and insurers are allowed to but not required to utilize case management or case managers.
4.Closure of Medical Restricted.
Section 206 is amended to restrict severely the ability of employers and insurance carriers to close medical benefits. No closure of future medical benefits is allowed in permanent total disability cases. In permanent partial disability cases involving body as a whole injuries or scheduled member injuries with potential awards of 200 weeks or greater, the parties may not compromise and settle future medical benefits for a period of three years from the date on which the settlement is approved or the trial judgment entered. In small scheduled member claims where the potential recovery is less than 200 weeks, the parties may continue to negotiate a closure of future medicals. Also, under § 206(b), settlements of very small claims or nuisance value claims can include a closure of medical. However, in such claims the total compensation paid, including money for future medical, may not exceed 50 times the minimum weekly benefit rate. For example, the current minimum weekly benefit rate is $92.70. Hence, under this statutory subsection, only those cases which can be settled for total funds equal to or less than $4,635.00 may include a closure of medical. At the end of the three year period from the date of the award or trial judgment, the parties may negotiate a compromise and settlement of future medical benefits. The parties do not have to hold a benefit review conference/mediation but they do have to obtain approval of the subsequent settlement of medical from either a court of competent jurisdiction (Chancery or Circuit Court) or from the Department of Labor. The new provisions governing future medical benefits will be applicable to all cases involving injuries occurring on or after July 1, 2004.
5.Department of Labor Specialist Program.
Section 238 is amended to clarify some of the powers of the Department of Labor Specialists. The amendment makes clear that the Specialist shall not act as an advocate for either party and shall decide all issues solely on the basis of the “information available” to the Specialist. The Specialist is to determine the matter “without favor or presumption for or against either party.” Note that the evidentiary standard is broad, much broader than standards applicable in court which limit the introduction of evidence. Presumably, the “information” standard will be such as normally governs administrative agencies so the parties may introduce information which would not necessarily be authenticated for in-court evidence purposes so long as the information has some indicia of reliability. For example, corroborated hearsay or what is know as “reliable hearsay” would be subject to consideration on the part of the Specialist. The provision also makes clear that the Specialist has authority to order not only medical treatment generally but also specific medical treatment ordered or recommended by the “treating” physician. Further, the Specialist has the ability to order retroactive payment of benefits. These provisions will be effective on July 1, 2004, regardless of the date of the injury.
Section 236 is amended in a fashion to give the Specialist the authority to cancel or waive a benefit review conference. Presumably, one of the purposes for this amendment is to allow the DOL to waive a benefit review conference/mediation as an exhaustion requirement when the parties agree the case is not a reasonable candidate for mediation and must be tried. This provision becomes effective with regard to injuries occurring on or after January 1, 2005. Section 236 is also amended to increase the CLE requirements of Department of Labor Specialists. They are required to take seven hours of continuing legal education involving workers’ compensation in each calendar year. The law is effective July 1, 2004.
6.Documentation Requirements.
Section 204(a)(4) is amended to require that employees be tendered Department of Labor form C-42, “Agreement Between Employer/Employee Choice of Physician.” The employer or the insurer must obtain the employee’s signature and written documentation of the selection of the panel physician on the form. The employer and insurer must provide a copy of the completed form to the employee and maintain the document for production upon request of the Department of Labor. This provision is applicable to injuries occurring on or after July 1, 2004.
7.Extra Territorial Application of the Act.
The 2004 Public Chapter 648 amends § 115 to allow for the extra territorial application of the Tennessee Workers’ Compensation Law in those cases in which the employee suffers an injury outside of the State of Tennessee but is a resident of Tennessee “and there existed a substantial connection between this state and the particular employer and employee relationship.” Previously the statute provided for application of Tennessee Workers’ Compensation Law for injuries occurring outside the State of Tennessee when either the contract of hire was made in Tennessee or the employment was “principally localized” in the State of Tennessee. This provision takes effect, according to the Tennessee Attorney’s Memo, on June 23, 2004.
8.Judiciary Educational Requirements.
A new section was added to the law which requires the Administrative Office of the Courts to provide continuing legal education for Judges concerning workers’ compensation, the use of the AMA Guides and “specific variances” in the application of the provisions of this chapter throughout the State’s 31 judicial districts. In other words, the General Assembly is trying to homogenize awards by exerting peer pressure on the Judges through publication of their awards and comparison to the awards of their colleagues across the State.
9.Legislative Intent.
New sections involving legislative intent were added. These sections do not carry the force of law but may be used some in interpreting (construing) the law and also may be harbingers of future legislative or regulatory action. One of these sections states that it is the “intent and purpose of the General Assembly that workers’ compensation premiums be adjusted downward within 15 months of the effective date of this Act, to reflect the cost savings resulting from the provisions of this Act.” Even so, the amendment goes on to state that nothing in this subsection or in the amendments in general “shall be construed as amending or affecting the procedures for filing an approval of rates set forth in Tenn. Code Ann., Title 56, Chapter 5.” The Legislature also added a provision stating that its intent is to encourage insurers to provide semi-annual reports to all employers “at no cost to the employer” regarding the status of all covered claims under the Tennessee Workers’ Compensation Law for that particular insured.
10.Medical Examinations.
The medical provision statute, § 204, had some extensive amendments. This provision now provides for the so-called “super doc.” When the parties have a dispute as to the medical impairment involved in a case, then either party may make a request of the Department of Labor for an independent medical exam. The Department will maintain a registry of medical examiners. The employer must provide the request to the Department of Labor in writing. The Department of Labor will then provide three names from the registry of proposed IME doctors. The names are chosen at random from the registry. The Department is to notify the parties by “facsimile or e-mail” and the notification is to be made within five days of the date of the written request. The employer is entitled to strike one doctor from the list. The remaining doctors are submitted to the employee for his or her election of an examining doctor. All costs and fees of the IME are paid by the employer and insurance carrier. The IME doctor is to issue a written report and the impairment rating opined by that medical provider “shall be presumed to be the accurate impairment rating; provided however, this presumption may be rebutted by clear and convincing evidence to the contrary.” The Commissioner of the Department of Labor and Workforce Development is to establish the registry under the Department’s rule making authority. The statute retains § 204(d)(1) requiring the employee to submit to an examination by a physician of the employer’s designation but the practical effectiveness of the old provision is undercut by the current development. The General Assembly has required that the rules required to give effect to this subsection and the development of the registry occur on or before and become effective on July 1, 2005.
The 2004 Public Chapter 433 continues the requirement that a chiropractor be included on the medical panel in back injury cases. This provision will remain effective for another year through June 30, 2005. The number of chiropractic visits is limited to 12.
11.Medical Fee Schedule.
Section 204 is amended to provide for a medical fee schedule. The Commissioner of the Department of Labor and Workforce Development in consultation with the Medical Care and Cost Containment Committee and the Advisory Council on Workers’ Compensation shall file proposed rules to implement a medical fee schedule with the Clerk of the House of Representatives, the House Consumer and Employee Affairs Committee and the Senate Commerce Labor and Agricultural Committee on or before February 15, 2005. The rules establishing the fee schedule will take effect July 1, 2005. The fee schedule will apply to hospital billings, physician billings, prescription drugs and all ancillary medical health care services billings.
12.Medical Proof.
Section 204 is amended with regard to medical proof. The statute specifically is amended to require that all medical impairment opinions be given either pursuant to the most recent edition of the AMA Guides to the Evaluation of Permanent Impairment, “or in cases not covered by the AMA Guides [by] an impairment rating by any appropriate method used and accepted by the medical community.” This section also makes clear that medical opinion not meeting the previously expressed standard will not be considered in Department of Labor benefit review conference or by a court in trial. This provision is effective July 1, 2004.
13.Multipliers.
Section 241 saw significant amendments. Section 241 is the multiplier statute. In those cases in which the employee returns to the employment of the employer providing employment at the time of the accident and at a wage equal to or in excess of the wage earned at the time of the accident, the award will be limited to the value of no more than one and one-half (1.5) times the medical impairment rating if the injury is a body as a whole injury or a scheduled member injury with a potential award of 200 weeks or greater. Remember, that permanent total disability cases are not governed by the multipliers. Scheduled member injuries with potential awards of less than 200 weeks are not governed by the multiplier. Section 241(a)(1) is the one and one-half (1.5) multiplier for body as a whole injuries and new § 241(d)(1) is the one and one-half (1.5) multiplier for scheduled member injuries with maximum potential awards equal to or greater than 200 weeks. These provisions are applicable to injuries occurring on or after July 1, 2004.
Section 241(2)(a) is also amended. This is the provision which caps body as a whole injuries at six (6) times the medical impairment rating in cases in which there is no meaningful return to work with the employer with whom the claimant was employed at the time of the injury. This cap now is also applicable to scheduled member cases in which the potential award is 200 weeks or greater. This provision will be applicable to injuries occurring on or after July 1, 2004.
Section 242 is the “escape hatch” from the multiplier statutes. It is amended to have applicability to scheduled member cases with potential awards equal to or greater than 200 weeks. To escape the six (6) multiplier, an employee must prove that as of the date of the award, three of four factors are true. Those factors are that the employee lacks a high school diploma or GED or cannot read or write on an eighth grade level, is 55 years of age or older, has no reasonably transferable job skills and has no employment opportunities available locally considering the employee’s permanent medical condition. Note that the amendment made an important change as to the time of determining these factors. Under the old statute, the pertinent time was the date of maximum medical improvement but now the pertinent time is the actual date of award, which may make it easier in a category of cases to meet one of the elements, the age element. This provision is applicable to injuries occurring on or after July 1, 2004.
14.Penalties.
Section 205(b)(3) is amended to provide for a penalty for failure to pay or timely pay TTD which may be assessed by a Department of Labor Specialist. The provision provides that TTD payments are to be paid within 20 days after the employer or insurance carrier has knowledge of a disability which would qualify for benefits under the Tennessee Workers’ Compensation Law. If the benefits are not timely paid after the condition is met, then the Specialist may order (“shall have the authority to assess”) a civil penalty in addition to all TTD benefits due equal to 25% of such disability benefits that were not paid in accordance with this new subsection. Before the Specialist may order any penalty, the Specialist is to provide the employer and insurance carrier with written notification and a request to provide documentation of any reasons why the civil penalty should not be assessed. The new subsection also gives this same authority to award the penalty to the courts. This section is applicable to injuries occurring on or after July 1, 2004.
15.Reconsideration.
Remember, that the one and one-half (1.5) multiplier statute has a reconsideration provision which allows an employee to file a new cause of action if he or she loses employment after a capped settlement or award. The reconsideration provisions now apply to scheduled member injuries with potential awards of 200 weeks or greater. The reconsideration statute time limits for body as a whole injuries are unchanged. If the employee loses employment within 400 weeks of the date of the return to work and files a cause of action for reconsideration within one year of the loss of employment, the claim is timely. In those instances where a scheduled member claim with a potential value of 200 weeks or greater is capped, then the employee must lose employment within the number of weeks which correspond to the maximum benefit which could have been provided for the scheduled member claim and must file for reconsideration within one year of the loss of employment. New limitations were added to reconsideration cases. The claimant is not entitled to reconsideration when the loss of employment results from the employee’s voluntary resignation or retirement so long as the resignation or retirement did not result from the work-related disability which is the subject of reconsideration. Also, no reconsideration is allowed if the employment is lost due to the employee’s “misconduct connected with the employment.” Claimants are not permitted to waive the right of reconsideration. In other words, you cannot close or release the right of reconsideration in any settlement. If there is an action for reconsideration, the claimant must first seek a benefit review conference/mediation before proceeding to court. The claim can be filed in court only if the benefit review conference/mediation fails and then the claimant must file the lawsuit within 90 days of the benefit review conference. The right of reconsideration allows the employee to increase the benefit up to a multiple of six (6) times the medical impairment rating, with the employer and insurance carrier receiving credit for the prior award. The new statute also states that in an action for reconsideration, any new benefits “shall be based on the medical impairment rating which was the basis of the previous settlement or award.” These provisions are applicable to injuries occurring on or after July 1, 2004.
16.Second Injury Fund.
The General Assembly amended § 208 to limit State’s Second Injury Fund liability. Under the old § 208(b), employers and insurance carriers received a Second Injury Fund benefit if the sum of the current award and all prior awards exceeded 100%. The percentage of all of those awards exceeding 100% was multiplied by the current award and the Second Injury Fund paid that portion of the current award. This was the most common type of Second Injury Fund liability. Such Second Injury Fund liability is eliminated with regard to all injuries arising on or after July 1, 2005 The only remaining Second Injury Fund liability will be under § 208(a). Under that provision of the law, the Second Injury Fund has no liability unless the employer knew of a pre-existing disability when it hired or retained the employee in employment and is available only if the claimant is found permanently and totally disabled. The court then determines how much disability would have been created by only the last injury and the Second Injury Fund pays that portion of the award attributed to all other pre-existing disabilities. The 4% premium tax of § 401 from which the Second Injury Fund is funded remains unchanged. Section 401 provides up to 50% of the tax revenues “shall be paid into the Second Injury Fund.”
17.Self-Insurance.
Section 405 which deals with self-insurance had a number of amendments made to it. The overall tone and tenor of the amendments is to increase the requirements necessary to satisfy self-insuring requirements. For example, the amount of security to be provided to fulfill self-insurance requirements is increased from $125,000.00 to $500,000.00. The statute also goes on at great length to define the type of security which will be deemed satisfactory to the Commissioner of Commerce and Insurance to satisfy the self-insurance requirements. The new provisions are effective as of July 1, 2004.
18.Statute of Limitations.
Section 203 is the general statute of limitations statute. It is amended to conform with the new administrative exhaustion procedure. Under the new law, the parties will have to first seek a benefit review conference/mediation before they are allowed to file a lawsuit. The amendment times the statute of limitations with this new procedural requirement. The claimant must seek the benefit review conference/mediation within the same parameters the old statute of limitations required and that is one year from the later of the date of the injury or from the issuing date of the check for payment for the last authorized treatment or disability benefit. If the benefit review conference/mediation is not successful, then the parties have 90 days after “the date a written agreement or written report regarding the conference is filed with the Commissioner of Labor” to bring suit in court. The amendment also provides, however, that “in no event” shall the requirement of administrative exhaustion and 90-day post failed mediation provision shorten the underlying statute of limitations. If the Department of Labor schedules a benefit review conference/mediation and the employee no shows, then the Department of Labor can order a dismissal of the claim in order to complete the running of the statute of limitations. A dismissal is final and bars the claim unless the employee contacts the Department to reschedule the benefit review conference mediation within 60 days of the order of dismissal. This provision is said to be effective for injuries occurring after January 1, 2005.
19.Temporary Partial Disability.
The 2004 Public Chapter 443 amends the temporary partial disability statute to clarify that the calculation of the benefit is based upon the difference between the average weekly wage earned in the temporarily partially disabled condition and the pre-injury average weekly wage. This provision takes effect July 1, 2004.
20.Temporary Total Disability Benefits.
Section 102(14) is amended to change the maximum weekly benefit for temporary total disability benefits. The temporary total disability benefits for a small category of workers is raised. For injuries occurring on or after July 1 and through June 30, 2005, the cap on TTD is 105% of the State’s average weekly wage. For injuries occurring after July 1, 2005, the maximum weekly benefit for temporary total disability will go up to 110% of the State’s average weekly wage. TTD is still calculated based on 66-2/3% of the employee’s average weekly rate with upper limits as above-referenced. Note, this statute does not change the maximum weekly benefit for permanent partial disability or permanent total disability which remains at 66-2/3% of the employee’s wage limited or capped at 100% of the State’s average weekly wage.
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We hope you find this summary educationally informative and useful to you. Remember that the above is only a summary and does not cover every aspect of the 2004 Amendments to the Tennessee Workers’ Compensation Law.