A Primer on Tennessee Workers’ Compensation Law
By – Sara E. Barnett
In June of 2004, the 103rd General Assembly of the Tennessee Legislature passed a sweeping reform of the Tennessee Workers Compensation Act (“The Act”), T.C.A. § 50-6-101 et seq. This reform bill is known as Public Acts, 2004, Chapter No. 962, House Bill No. 3531 (attached). While these changes have been “on the books” for years, it is just now that the injuries to which the changes apply have become ripe for appeal and discussion. With these 2004 or later injuries, many professionals including employers, insurance adjusters, and attorneys, are left with questions as to how the “new laws” are to be applied by the Tennessee Supreme Court.
B. Permanent Partial Disability Benefits – 1.5x Caps
The most monetarily significant reform to employers and their workers compensation carriers is the change to the statutory multipliers, commonly known as the “cap.” Section 50-6-241 (d)(1)(A) of the Tennessee Code Annotated states as follows:
For injuries occurring on or after July 1, 2004, in cases in which an injured employee is eligible to receive any permanent partial disability benefits either for body as a whole or for schedule member injuries, except schedule member injuries specified in § 50-6-207(3)(A)(ii)(a)-(l), (n), (q), and (r), and the pre-injury employer returns the employee to employment a wage equal to or greater than the wage the employee was receiving at the time fo the injury, the maximum permanent partial disability benefits that the employee may receive is one and one-half (1 ½) times the medical impairment rating determined pursuant to the provision of § 50-6-204 (d)(3). In making such determinations, the court shall consider all pertinent facts, including lay and expert testimony, the employee’s age, education, skills and training, local job opportunities and capacity to work at types of employment available in claimant’s disabled condition.
This section represents two significant changes to the “cap.” First, the “cap” is now 1 ½ times the impairment rating. Secondly, the “cap” now applies to certain scheduled members.
It should be noted that there is a statutory multiplier which is applied in cases where an employee does not return to work. In cases where the employee does not return to work, the maximum permanent partial disability award is six times the impairment rating. T.C.A. § 50-6-241(d)(2)(A). In certain cases, the court may exceed the “six times multiplier.” If the employee establishes by “clear and convincing evidence” three of the four, following criteria: 1) employee lacks high school diploma or the equivalent, 2) employee is age 55 or older, 3) employee has no reasonably transferable job skills, and 4) employee has no reasonable employment opportunities locally. T.C.A. § 50-6-242 (b).
1. Change of the Cap from 2.5x to 1.5x Rating
Under the Act, if an injured employee has been given a permanent disability rating by a doctor, then the employee is entitled to permanent partial disability benefits (“PPD”). If the employee has “returned to work,” then the employer maybe entitled to the benefit of the cap. For injuries arising on or after August 1, 1992 and prior to July 1, 2004, the most that an employee who is capped may receive is 2 ½ times the impairment rating. Under the new law for injuries after July 1, 2004, the most a capped employee may receive is 1 ½ times the impairment rating.
Obviously, this is a significant benefit to the employer. For example: Assume an employee who returned to work following an injury to his back on June 31, 2004 and received a rating of 10% to the body as a whole, has a compensation rate of $200. The maximum that this employee could recover (without another impairment rating) is 25% to the body as a whole or 100 weeks at his compensation rating totaling to $20,000.00. In contrast, if the facts are the same but the date of injury is July 2, 2004, then the maximum that the employee could recover is 15% to the body as a whole or 60 weeks at his compensation rate totaling to $12,000.00.
2. Application of “Cap” to scheduled members and body as a whole
The second change with respect to the “cap” is that certain scheduled members are now capped. Under the old law, only those injuries which were “body as a whole” or non-scheduled members could be capped. The Act sets forth a schedule of compensation for certain injuries at T.C.A. § 50-6-207(3)(A)(ii).
Thumb – 60 weeks
1st (Index) finger – 35 weeks
2nd (Middle) finger – 30 weeks
3rd (Ring) finger – 20 weeks
4th (Little) finger – 15 weeks
Great toe – 30 weeks
Any other toe – 10 weeks
Hand – 150 weeks
Arm – 200 weeks
Foot – 125 weeks
Leg – 200 weeks
Eye – 100 weeks
Hearing (both ears) – 150 weeks
Arm and Other Hand – 400 weeks
Hand and Foot – 400 weeks
Arm and Foot – 400 weeks
Eye and Leg – 350 weeks
Eye and Arm – 350 weeks
Eye and Foot – 300 weeks
Two Arms – 400 weeks
Two Hands – 400 weeks
Two Legs – 400 weeks
Two Feet – 400 weeks
Leg and Hand – 400 weeks
Arm and Leg – 400 weeks
These injuries are known as scheduled members. If an injury is not set forth in the schedule, then the injury is considered to be an injury to the “body as a whole” for which the maximum possible recovery is 400 weeks. Tenn. Code Ann. § 50-6-207 (3)(F).
Under the new law, any injury to the body as a whole or to a scheduled member with a value of 200 weeks or more is capped at 1 ½ times the impairment rating. This also has a significant impact on the cost of a claim.
C. Closing Future Medical Treatment
Generally, an employee is entitled to medical treatment paid by the employer for the rest of the employee’s life as long as the medical treatment is related to the workers compensation injury and is necessary. In the past, the employee and the employer might agree to “close” future medical treatment for a sum of money as part of the settlement of a claim. This meant that the employee would be responsible for any future medical expenses incurred related to the workers compensation injury. Many times the employer or its insurer were willing to pay large sums of money to be able to completely close out their liability for the injury. It was often to the benefit of the employee particularly in cases where the medical provider had stated that they would need no future medical treatment.
The new law in Section 50-6-204 (a)(2) of the Tennessee Code Annotated states as follows:
Notwithstanding any other provision of this chapter to the contrary, the parties shall not be permitted to compromise and settle the issue of future medical benefits to which an employee is entitled pursuant to this chapter, except in accordance with the following:
(A) If a workers’ compensation claim is settled by the parties, the parties shall not agree to compromise and settle the issue of future medical benefits for a period of three (3) years from the date on which the settlement is approved. No settlement agreement shall be approved that contains any language inconsistent with this subdivision (a)(2).
(B) After the expiration of the three (3) year period, if the parties mutually agree to a compromise and settlement on the issue of future medical benefits, the parties shall not be required to request a benefit review conference. Instead, the parties shall submit such an agreement to the proper court for approval, pursuant to subsection (a) or to the commissioner of labor and workforce development or the commissioner’s designee pursuant to subsection (c).
(C) Notwithstanding any other provision of this chapter or this subdivision (a)(2), an employee who is determined to be permanently totally disabled shall not be allowed to compromise and settle the employee’s rights to future medical benefits.
(D) Nothing in this section shall be construed to prohibit the parties from compromising and settling at any time the issue of future medical benefits on any schedule member injury not subject to § 50-6-241(d)(1)(A).
This provision is effective for injuries occurring on or after July 1, 2004. This essentially means that the parties cannot agree to close future medical benefits of any injuries which are to the body as a whole or to scheduled members with a value of more than 200 weeks. However, three years after the settlement of the permanent partial disability benefits, the parties can then agree to close out future medical benefits. This new agreement must be approved by the Department of Labor or a Court. Also, in cases where the employee is permanently and totally disabled, the parties may never close future medical benefits. There is no restriction on closing out future medical benefits for injuries which are to scheduled members with a value of less than 200 weeks.
D. Right to Reconsideration
As discussed above, when an employee returns to work and has an injury which is to the body as a whole or a scheduled member valued at more than 200 weeks, the employer is now entitled to a “cap” of 1.5 times the disability rating. But what happens in the situation where the employee later loses his job? Under certain conditions, the employee may seek “reconsideration” for additional compensation.
1. Old Law of Reconsideration
There are two sections within T.C.A. § 50-6-241 which apply to reconsideration. Section 50-6-241 (a)(2), which is the old law and applies to injuries prior to July 1, 2004, states as follows:
(2) In accordance with this section, the courts may reconsider, upon the filing of a new cause of action, the issue of industrial disability. Such reconsideration shall examine all pertinent facts, including lay and expert testimony, employee’s age, education, skills and training, local job opportunities, and capacity to work at types of employment available in claimant’s disabled condition. Such reconsideration may be made in appropriate cases where the employee is no longer employed by the pre-injury employer and make application to the appropriate court within (1) year of the employee’s loss of employment, if such loss of employment is within four hundred (400) weeks of the day the employee returned to work. In enlarging a previous award, the court must give the employer credit for prior benefits paid to the employee in permanent partial disability benefits, and any new award remains subject to the maximum established in subsection (b).
This means for injuries occurring prior to July 1, 2004, that an employee who received an award which was capped, may request reconsideration if his employment is ended within 400 weeks of his return to work. Under the old law, there were reservations of when an employee would be entitled to reconsideration; however, these were based upon case law. For instance, an employee was not entitled to reconsideration when the employee was terminated for good cause such as misconduct. Davis v. Averon Truss Co., 2001 Tenn. LEXIS 558 (Tenn. Ct. App. July 5, 2001). In addition, an employee is not entitled to reconsideration for voluntary resignation. Hicks v. Kroger, 2001 LEXIS 649 (Tenn. Ct. App. Sept. 6, 2001)(“We do not believe that it was the intent of the legislature to allow an employee to continue to work until the work decides to retire for reasons unrelated to the injury, especially when the employee has not produced any medical evidence that they cannot continue to do the work they were doing previous to voluntarily leaving the employment.”).
2. New Law of Reconsideration
The new law applies reconsideration to some scheduled members and codifies some of the case law related to reconsideration. Section 50-6-241 (d)(B)
(i) If an injured employee receives benefits for body as a whole injuries pursuant to subdivision (d)(1)(A) and the employee is subsequently no longer employed by the pre-injury employer at the wage specified in subdivision (d)(1)(A) and the employee is subsequently no longer employed by the pre-injury employer at the wage specified in subdivision (d)(1)(A) within four hundred (400) weeks of the day the employee returned to work for the pre-injury employer, the employee may seek reconsideration of the permanent partial disability benefits.
(ii) If an injured employee receives benefits for schedule member injuries pursuant to subdivision (d)(1)(A), and the employee is subsequently no longer employed by the pre-injury employer at the wage specified in subdivision (d)(1)(A), the employee may seek reconsideration of the permanent partial disability benefits. The right to seek such reconsideration shall extend for the number of weeks for which the employee was eligible to receive benefits under § 50-6-207, beginning with the day the employee returned to work for the pre-injury employer.
(iii) Notwithstanding the provisions of this subdivision (d)(1)(B), under no circumstances shall an employee be entitled to reconsideration when the loss of employment is due to either:
(a) The employee’s voluntary resignation or retirement; provided, however, that such resignation or retirement does not result from the work-related disability that is the subject of such reconsideration; or
(b) The employee’s misconduct connected with the employee’s employment.
(iv) To seek reconsideration pursuant to subdivision (d)(B)(i) or (d)(B)(ii), the employee shall first request a benefit review conference within one (1) year of the date on which the employee ceased to be employed by the pre-injury employer. If the parties are not able to reach an agreement regarding additional permanent partial disability benefits at the benefit review conference, the employee shall be entitled to file a compliant seeking reconsideration in a court of competent jurisdiction within ninety (90) days of the date of the benefit review conference. Any settlement or award of additional permanent partial disability benefits pursuant to reconsideration shall give the employer credit for prior permanent partial disability benefits paid to the employee. Any new settlement or award regarding additional permanent partial disability benefits remains subject to the maximum established in subdivision (d)(2) and shall be based on the medical impairment rating that was the basis of the previous settlement or award.
(v) Notwithstanding any other provision of the law to the contrary, an employee shall not be permitted to waive or forfeit, and the parties shall not be permitted to compromise and settle, the employee’s rights to reconsideration pursuant to this section.
a. Period of Eligibility for Reconsideration
There are several significant changes in this new law which apply to injuries on or after July 1, 2004. For body as a whole injuries which are capped, the employee may seek reconsideration if the employee loses his job within 400 weeks of the date he returned to work. This is not a change in the law. However, for injuries which were to scheduled members that were capped, i.e. valued at more than 200 weeks, the employee may seek reconsideration if the employee loses his job within the number of weeks the scheduled member involved is valued from the date he returned to work. For example, an employee who has an injury to his eye an arm is considered to have a scheduled injury valued at 350 weeks. If the employee returns to work and settles this injury for 1.5 times the medical impairment rating, but then later loses his job, he may file for reconsideration if he was terminated within 350 weeks of his return to work. If he is terminated 400 weeks after his return to work, then he would not have a right to reconsideration.
b. Exception to Reconsideration
The new law also codifies prior case law. The new law provides two exceptions which prohibit an employee from filing a claim for reconsideration: 1) voluntary resignation or retirement; and 2) employee misconduct. If the employee resigns or retires due to the work-related disability, then he would still have the right of reconsideration.
c. Procedure for Reconsideration
Under both the old and new law, the employee must request for reconsideration within one year of the loss of employment. Under the old law, the employee was to “make application to the appropriate court.” Through case law, it was determined that petitions for reconsideration must be filed in the Court which had jurisdiction over the original settlement. See Moorehead v. Ryder Integrated Logistics, Inc., 2001 Tenn. LEXIS 345 (Tenn. Ct. App. 2001) (Court determined that Circuit Court of Davidson County could not hear a reconsideration case when the original settlement had been approved by the Chancery Court of Davidson County).
Under the new law, an employee is required to first request a benefit review conference (“BRC”) with the Department of Labor. If the parties are not able to reach an agreement regarding additional benefits at the BRC then the employee is entitled to file a complaint seeking reconsideration in a court of competent jurisdiction. The employee has 90 days from the date of the benefit review conference to file his complaint.
d. Settlement of Reconsideration
Prior to the new law, parties would often include waiver of the right of reconsideration as part of the terms of settlement. The new law states that employees are not permitted to waive or forfeit or compromise their right to reconsideration. This law applies to injuries occurring on or after July 1, 2004.
A recent case has brought into question whether or not parties could agree to waive reconsideration on an injury before July 1, 2004. In the case of Overman v. Altama Delta Corp., 2006 LEXIS 193 (Tenn. March 16, 2006)(case attached), the Tennessee Supreme Court found waivers of reconsideration rights invalid and unenforceable. In Overman, the court approved a settlement agreement in March of 2004 which included a waiver provision for reconsideration. The employee refused to accept another position that was within her medical restrictions. She then filed a complaint seeking reconsideration. The Tennessee Supreme Court specifically found that the Act “does not contain a provision approving waivers of employees’ reconsideration right.” Relying on § 50-6-114(a), which states that no contract shall operate to relieve an employer of their obligations under the Act, the court concluded that the reconsideration waiver was unenforceable. The dissent, written by Chief Justice William M. Barker, points out the that the new law seems to rebut the majority holding. The dissent states, “Because this new statutory prohibition against waivers of reconsideration rights expressly applies only after a specified date, the statute implies that such waivers for injuries occurring before that date are permissible. If the General Assembly had intended the absolute prohibition that the majority declares today, it would not have inserted this qualification into the provision.” Id. at *7.
While it appears that reconsideration in cases before July 1, 2004, currently cannot be waived, one option for employers would simply be to settle a case for an amount that exceeds the cap so that the employee would not be entitled to reconsideration.
E. Compromise Settlement of Disputed Claims
Section 50-6-206(b) states as follows:
Notwithstanding any other provision of this section, whenever there is a dispute between the parties as to whether or not a claim is compensable, or a dispute as to the amount of compensation due, the parties may settle such matter without regard to whether the employee is receiving substantially the benefits provided by the workers’ compensation law; provided, however such settlement paid to the employee shall not exceed fifty (50) times the minimum weekly benefit rate as of the date of the claimed injury. If the parties settle such matter pursuant to this subdivision, the employee shall be entitled to no future medical benefits and no settlement agreement between the parties shall be approved by either the court or the commissioner, or the commissioner’s designee, if the settlement agreement contains an amount of money designated or allocated for future medical benefits. The settlement must be determined by the court or commissioner, or the commissioner’s designee, to be in the best interest of the employee.
This section applies to injuries on or after July 1, 2004. Under the old law, parties would settle a claim for a large sum not based upon a specific disability. Many times these claims would be disputed and all benefits would be settled including past and future medicals, temporary benefits, and permanent benefits.
Under the new law, disputed claims can not be settled for more than 50 times the minimum weekly benefit rate. For example, for injuries occurring between July 1, 2004 through June 30, 2005 the minimum weekly benefit rate is $95.70. This means that the most a disputed claim during those dates of injury could be settle for is $4,875.00. The Department of Labor prepares a chart with the maximum and minimum benefit rates for dates of injuries. It is also important to note that settlements under this statute do not have the right to future medical benefits, although it appears that the Department of Labor has taken the position that the parties can agree to leave the medicals open if they choose.
Most recently, the DOL has announced as follows: “We are not to mediate or approve a case for the compromise disputed amount unless the case was denied from the outset or paid and then denied.” There are several cases in which the employee because of his compensation rate or low impairment rating would not be entitled to money beyond the disputed maximum. In those cases, where the employee agrees, insurance companies have been settling the cases at the maximum disputed amount in order to give the employee more money and close out future medicals. In many of these cases, both parties gain from such an arrangement. However, the DOL has determined that it will no longer approve these cases – which is seemingly in contravention of the plain reading of the statute.
F. Benefit Review Conference
A benefit review conference (“BRC”) is a dispute resolution process between the parties with a specialist from the Department of Labor serving as a mediator.
1. BRC is mandatory before filing suit
Under the new law, the parties in a claim involving injuries occurring on or after January 1, 2005, must submit to a benefit review conference prior to filing a complaint with a Court. Section 50-6-203 states as follows:
(a) No claim for compensation under Workers’ Compensation Law, compiled in this chapter, shall be filed with a court having jurisdiction to hear workers’ compensation matter, as provided in § 50-6-225, until the parties have exhausted the benefit review conference process provided by the division of workers’ compensation. Notwithstanding the provision of this section, if the parties have mutually agreed to a compromise and settlement of a claim for workers’ compensation, the parties shall not be required to exhaust the benefit review conference process before filing a claim and submitting the compromise and settlement to the appropriate court for approval pursuant to § 50-6-206(a) or to the commissioner of labor and workforce development or the commissioner’s designee pursuant to § 50-6-206(c). If the settlement is not approved, the parties shall then exhaust the benefit review conference process.
This statute indicates that if the parties are able to agree to settle the case before a BRC, then the parties may present the settlement to the DOL or a Court without going through the BRC process.
This section has been the subject of much debate in the courts. The question that has come before the courts is whether this provision violates a worker’s constitutional due process rights to file suit. On June 8, 2006, the Tennessee Supreme Court heard arguments in the case of Lynch v. City of Jellico. In Lynch, the Plaintiff, Jerry Lynch, gradually developed tingling, numbness and weakness in both hands while working for the City of Jellico. Lynch was eventually diagnosed with bilateral carpal tunnel syndrome in February of 2005. Lynch did not participate in the BRC process but filed suit in Campbell County Chancery Court. Lynch argued that the new law requiring him to request a BRC before filing suit violates the Firth and Fourteenth Amendment to the U.S. Constitution. Lynch’s attorney argued that since specialists who mediate claims are not learned in the law, injured workers lose their right to have grievances heard before a judge. The City’s attorney and attorney for the State argued that an employee still has the right to file suit it is simply once the mediation is exhausted. In addition, the employee may go through a waiver process of the BRC. All parties agreed that it would be possible and allowable for the legislature to move the whole process away from the Courts and be completely administrative. This raises the question that if an entirely administrative process is constitutional, then how can requiring a BRC be unconstitutional. The Tennessee Supreme Court did ultimately find the BRC process to be constitutional.
2. Authority of Specialists
The new law has also expanded the authority of the specialists by amending T.C.A. § 50-6-238(A) and T.C.A. § 50-6-236. Under § 50-6-236, the specialist has the authority, within their sole discretion, to continue, waive or dismiss a Benefit Review Conference for injuries occurring on or after January 1, 2005. In addition, § 50-6-236 (i) states:
For the purpose of conducting discovery as part of a benefit review conference, workers’ compensation specialists shall have the authority at the request of either party, to refer matters to a specially designated attorney within the department who may issue subpoenas, effect discovery, and issue protective orders in the same manner as an administrative judge or hearing officer pursuant to § 4-5-311.
In addition to the benefit review conference, a party may also file a Request for Assistance for temporary issues such as payment of medical bills and temporary total disability benefits (“TTD”). Under § 50-6-238(a), a specialist may order the continuation or initiation of payment of TTD. Under the new law, a specialist may also order retroactive benefits to be paid. The new law also specifically gives specialists the right to order employers to provide medical benefits, to order specific medical treatment recommended by the treating doctor, and to require the employer to provide a panel. In addition, a party may appeal the decision of the DOL specialist to a higher level. If the specialist denies benefits based on compensability or causation, then the BRC process is considered exhausted and suit maybe filed.
The DOL’s power has been further expanded to allow for discovery to take place prior to the BRC as well as subpoena power before a benefit review conference is held.
G. Statute of Limitations – Time to File Suit
It is important to note that, under the new law, if a BRC is not requested within one year from the date of the injury or the date of the last voluntary payment of benefits, the statute of limitations will have run and the claim will forever be barred. The Section further goes on to state:
(g) (1) If the parties are not able to reach a compromise and settlement of all issues at the benefit review conference held pursuant to this section, the parties shall have ninety (90) days, after the date a written agreement or a written report regarding the conference is filed with the commissioner pursuant to § 50-6-240, to file a complaint with a court of competent jurisdiction as provided in § 50-6-225. The division of workers’ compensation shall maintain an official record of the date on which a written agreement or written report is filed with the commissioner and supply the information to the parties or the appropriate court upon request of either the parties or the court.
(2) Notwithstanding the provisions of this subsection (g), in no event shall an employee have less than the latter of:
(A) One (1) year from the date of the accident resulting in injury; or
(B) One (1) year from the latter of the date of the last authorized treatment or the time the employer ceased to make payments of compensation to or on behalf of the employee in which to file a complaint with a court of competent jurisdiction, as provided in § 50-6-225.
This means that either party may file suit following the BRC. If neither has filed suit after 90 days from the BRC, then the claim is barred by statute of limitations. If, however, the BRC is held in less than one year from the injury date or last authorized treatment, the employee will still be able to file suit after one year or 90 days from the BRC, which ever is the latest.
H. Medical Examination Registry
The new law establishes the Independent Medical Impairment Rating Registry (“MIR”) in § 50-6-204(d)(5). As explained earlier, a judge is typically faced with an impairment rating from a treating doctor and an impairment rating from an independent medical examiner (“IME”). Usually, this IME is hired and paid for by the Employee. In some cases, the Employer may also have an IME. The Act gives no guidance to the judge in determining which, if any, of the impairment ratings to use for the statutory multipliers or to determine permanent partial disability. Case law, however, seems to indicate at least an edge for the treating physician in certain circumstances. For example, see Carter v. First Source Furniture, 92 S.W.3d 367 (Tenn. 2002), holding in favor of opinion of Dr. Riley Jones, treating doctor, over Dr. Joseph Boals, IME. It is for the reason that there is no exact way to determine permanent partial disability, that the legislature developed the “registry” to resolve conflicting medical opinions regarding workers compensation permanent impairment ratings. This provision is effective for injuries which occur on or after July 1, 2005.
Section 50-6-204(d)(5) states as follows:
When a dispute as to the degree of medical impairment exists, either party may request an independent medical examiner from the commissioner’s registry. If the parties are unable to mutually agree on the selection of an independent medical examiner from the commissioner’s registry, it shall be the responsibility of the employer to provide a written request to the commissioner for assignment of an independent medical examiner with a copy of the notice provided to the other party. Upon receipt of such written request, the commissioner shall provide the names of three (3) independent medical examiners chosen at random from the registry. No physician may serve as an independent medical examiner in a case and serve on any panel of providers selected under this section for the employer involved in such case. The commissioner shall immediately notify the parties by facsimile or email when the list of independent medical examiners has been assigned to a matter, but in any event the notification shall be made within five (5) business days of the date of the request. The employer may strike one (1) name from the list, with such rejection made and communicated to the other party by facsimile or email not later than the third business day after the date on which notification of the list is provided. The employee shall select a physician to perform the independent medical examination from the remaining physicians on the list. All costs and fees for an independent medical examination and report made pursuant to this subdivision (d)(5) shall be paid by the employer. The written opinion as to the permanent impairment rating given by the independent medical examiner pursuant to this subdivision (d)(5) shall be presumed to be the accurate impairment rating; provided, however, that this presumption may be rebutted by clear and convincing evidence to the contrary.
According to the DOL, the MIR is available to parties who dispute the impairment rating and met one of two criteria: 1) at lest two (2) different doctors have issued different impairment ratings and the parties disagree as to those impairment ratings; or 2) a doctor has issued an opinion that no impairment exists, yet that doctor has given the injured employee permanent physical restrictions.
If that criteria is met, then either of the parties may request an IME from the registry. If the parties are not able to agree on an IME from the registry, then a random panel of three doctors from the registry will be given. The employer may strike one and then the employee picks one of the remaining two. All of the cost of the IME shall be paid by the employer. The registry doctor’s opinion shall be presumed to be statutorily accurate and can be overcome by clear and convincing evidence to the contrary. It should be noted that the only issue addressed by the registry doctor is impairment. Other issues such as causation, treatment, work restrictions and job modification will not be addressed by the registry.
The DOL requires that only board-certified and departmentally-approved MD’s and DO’s will be assigned to the MIR registry. In addition the doctors are required to attend a training course dedicated to the proper use of the AMA Guides to the Evaluation of Permanent Impairment, 5th Edition. The DOL forms for requesting an MIR examination, waiver form, and report form are on the DOL’s Website.
I. Temporary Benefits and Penalties
The new law also amends § 50-6-205(b) to provide for mandatory penalties for late temporary benefits. Section 50-6-205(b)(3) states as follows:
(A) In addition to any other penalty provided by law, if an employer, trust or pool, or an employer’s insurer fails to pay, or untimely pays, temporary disability benefits within twenty (20) days after the employer has knowledge of any disability that would qualify for benefits under this chapter, a workers’ compensation specialist shall have the authority to assess against the employer, trust or pool, or the employer’s insurer a civil penalty in addition to the temporary disability benefits that are due to the employee. The penalty, if assessed shall be in an amount equal to twenty-five percent (25%) of such temporary disability benefits that were not paid in accordance with the provisions of subsection (b). Furthermore, the penalty may be assessed as to all temporary disability benefits that are determined to not be paid in compliance with this subsection (b).
(B) Prior to the assessment of any civil penalty, the specialist shall issue a written request to the employer or insurance carrier to provide documentation as to why the civil penalty should not be assessed.
(C) If the specialist determines the employer or insurer was not in compliance with this subsection (b), the specialist shall issue a written order that assesses the penalty in a specific dollar amount to be paid directly to the employee. If the employer or insurer fails to comply with the order within fifteen (15) calendar days of that order’s becoming final, the employer or insurer shall be subject to penalties as set forth in § 50-6-238(d).
This provision applies to injuries on or after July 1, 2004. This means that the DOL is required to assess a penalty against an employer or its insured for untimely payment of temporary benefits. The penalty will be assessed when temporary benefits are unpaid after 20 or more days after the employer was notified of the injury. The penalty is for 25% of the untimely paid benefits and is payable to the employee.
It should also be noted that under T.C.A. § 50-6-238 any insurer, self-inured employer or self-insured pool which fails to comply with an order issued by a specialist within 15 days of receipt of the order, shall be assessed a fine of $10,000. This provision has been recently modified as part of the 2006 changes (Public Chapter 1014, attached) to include uninsured employers and to make the provision permissive, not mandatory.
Another penalty introduced in Public Chapter 1014 of the 2006 legislative section is an amendment to § 50-6-201 which adds a new subsection (c) which states that the employer or the insurer must file a wage statement with the department of labor within 30 calendar days of the notice of injury for injuries causing seven days of lost time. If the wage statement is not filed, a specialist may order the employee’s compensation rate to be the maximum workers’ compensation rate effective on the date of the injury. Once the wage statement is received, the specialist’s order will be adjusted to reflect the appropriate benefit rate for future benefit payments.
J. Other Miscellaneous Changes
1. 2004 Reform Act
There were several other changes with the new law which maybe important in certain cases. The new law under T.C.A. § 50-6-123(b) deletes the mandatory case management provisions. If case management is utilized, it is at the expense of the employer and the employee must cooperate. Section 50-6-204(a)(4) is now amended to require that an employer provide a panel in writing to the employee. The employee must sign and date the form (see attached C-42 Form). Another change in the law is under § 50-6-102 which requires doctors to use the most recent edition of the AMA Guides to Permanent Impairment. This means that doctors may not use the Manual for Orthopedic Surgeons for Evaluating Permanent Physical Impairment. Also, the new law adds an additional application of Tennessee Workers Compensation law to extraterritorial injuries. Under § 50-6-115 (3), the Act will apply on an extraterritorial basis when:
The injured worker was a Tennessee resident and there existed a substantial connection between this State and the particular employer and employee relationship.
As part of the new law, the legislature created a Medical Care and Cost Containment Committee and the Workers’ Compensation Advisory Council has developed a fee schedule found in § 50-6-125. The committee includes specified members including physicians, employers from certain organizations, hospital administrators, a pharmacist, and insurance company representatives. Since this is intended to be a general overview of the changes to the Act, there are other changes that may not be listed. Please see the full legislation attached.
2. 2005 Legislative Changes
The 2005 Legislative changes, as well as those of 2004-2008, are summarized on the Department of Labor’s Website, http://www.state.tn.us/labor-wfd/wcomp.html, and the legislation can be found on the State of Tennessee General Assembly website, http://www.legislature.state.tn.us, the summaries are attached.
In 2005, the legislature amended § 50-6-225 to delete provision (e)(7) making the special workers’ compensation panel a permanent portion of the statute. In addition, the legislature amended § 50-6-125(H) to include a chiropractor on the medical containment committee. In addition the provisions of § 50-6-204(a)(4)(B) became permanent which require that a chiropractor be included on a panel for back injuries with no more than twelve visits unless approved by the employer. Section 50-6-110(c)(1) has been amended to reduce the alcohol limit to 0.08% under the Drug Free Workplace Act. This means that if an employer is certified under the Drug Free Workplace Act and an injured employee is found to have blood alcohol content of 0.08% or greater, then the alcohol is presumed to be the proximate cause of the injury. This presumption maybe rebutted only by a preponderance of the evidence.
3. 2006 Legislative Changes
There were a handful of changes in 2006 which related to workers compensation. Section 50-6-225(a)(2) is amended to change the venue of a case when the employer is a county or a municipal corporation. Under this change, either party may file suit in the county in which the governmental entity is located or the county in which the incident occurred. This change does not allow the employee to file suit in the county where he resides if his employer is a county or municipal corporation.
One of the more important changes is concerning reconsideration of a specialist’s order. The legislature has amended § 50-6-238(d) to provide that an employee may request reconsideration of a specialist’s order denying the claim with the administrator of the Division of Workers Compensation. The employee has seven days to make this request. There is also a second provision which allows a party (i.e. employer) against whom an order is issued requiring payment of workers’ compensation benefits to request reconsideration with the administrator. If no written request is made, the party must comply with the order within 15 days.
4. 2007 Legislative Changes
The legislature changed the Maximum and Minimum benefit rates. Temporary Benefits – The maximum weekly benefit rate for injuries occurring July 1, 2007 through June 30, 2008 is 110% of the state’s average weekly wage, $784.00. Permanent Benefits – The maximum weekly benefit rate for injuries occurring July 1, 2007 through June 30, 2008 is 100% of the state’s average weekly wage, $713.00. Minimum Weekly Benefit – The minimum weekly benefit rate for injuries occurring July 1, 2007 through June 30, 2008 for both temporary and permanent benefits is $106.95.
A change to the statute gives the DOL the authority to apportion between carriers in a dispute regarding coverage. Public Chapter 378 gives the Commissioner of Labor and Workforce Development or commissioner’s designee the responsibility of ordering appropriate workers’ compensation benefits and loss adjustment expenses associated with a claim to be paid on an equal basis by the insurance carrier (or carriers) and the self-insured employer, as appropriate, in any case where an employer changes insurance carriers, the employer having been self-insured, becomes insured or, having been insured, is approved to be self-insured and one of the following applies: compensability of the claim is not disputed or a workers’ compensation specialist has determined the claim is compensable or has ordered benefits be provided. There must be a dispute as to which entity is responsible for the payment of the benefits. Whenever a court determines or the parties agree which entity is ultimately responsible for the provision of workers’ compensation benefits, that entity shall reimburse the other entity for all monies paid to or on behalf of the injured employee ordered paid by the Commissioner or the Commissioner’s designee. This payment shall include interest at the rate set in Tenn. Code Ann. § 47-14-121 from the date of payment. Additionally, this Chapter extends the termination date of the General Assembly’s Special Joint Committee on Workers’ Compensation from June 30, 2007 until June 30, 2012. This Act became effective June 8, 2007.
The new legislation makes it clear that an offset is not available for social security in death benefits. Public Chapter 403 clarifies that the statutory social security offset does not apply in cases in which workers’ compensation benefits are paid on behalf of the deceased employee to that employee’s dependents. This Act also amends Tenn. Code Ann. § 50-6-238(a) to specify that if a party submits written or electronic documents, medical records, video and/or audio tapes, x-rays, etc. to a workers’ compensation specialist considering a request for assistance for temporary disability benefits and/or medical benefits, the party must provide a copy of all such information to the opposing party or that party’s attorney at the time the information is provided to the specialist or upon request by the opposing party or the party’s attorney. Further, if requested, a specialist must provide an employee, employer, insurer, and/or their attorneys the opportunity to review the information the specialist has in the Department’s file on which the specialist may base his or her decision. The reviewing party has the right to request a copy of any record in the Department’s file. The Department may charge a copying fee up to $10.00 for the first 25 pages and $0.25 for each additional page. No additional fee may be charged for postage. If copies of x-rays, video and/or audio tapes are requested, the party providing those to the specialist must provide copies to the requesting party. If they do not, a specialist has the authority to order a party to provide such copies to the requesting party. This Act became effective June 11, 2007.
Public Chapter 513 amends Tenn. Code Ann. § 50-6-207 to require any employee who has drawn unemployment compensation benefits who later receives temporary disability benefits under workers’ compensation law for the same period of time must repay the unemployment compensation benefits up to the amount of temporary disability benefits received.
This Act also amends Tenn. Code Ann. § 50-6-237(c) to require that all parties mediating at a benefit review conference mediate in good faith and be prepared to consider all offers of settlement. If a specialist determines that any party is not prepared or is not mediating in good faith, then the specialist must include comments reflecting this in the Benefit Review Conference report. Any party or that party’s representative may be subject to a civil penalty of not less than $50.00 nor more than $5,000.00 for failing to comply with these requirements. This Act becomes effective July 1, 2007.
The legislation also including a change to medical fee schedule. Public Chapter 522 amends Tenn. Code Ann. § 50-6-204(i)(7) and addresses the issue known as “silent PPOs” under the Medical Fee Schedule. This Act imposes various requirements, applicable upon entering or renewing a provider contract, on every contracting agent who sells, leases, assigns, transfers, or conveys a list of contracted healthcare providers and their contracted reimbursement rates. It defines “contracting agent” as any person who is in direct privity of contract with a medical provider to reimburse the medical provider for medical services provided to an injured worker pursuant to the Workers’ Compensation Law at rates other than those provided under the Workers’ Compensation Medical Fee Schedule. These requirements on such agents, which take effect on January 1, 2008, are: (1) disclose to the provider whether the list of contracted providers may be sold, leased, transferred, or conveyed to other payors or agents including workers’ compensation insurers or self insureds; (2) disclose whether payors to which the list of contracted providers may be sold, leased, transferred, or conveyed may be permitted to pay a provider’s contracted rate if less than the workers’ compensation fee schedule; (3) allow providers, upon the initial signing or renewal of a provider contract, to decline to participate in networks solely to serve workers’ compensation payors that are sold, leased, transferred, or conveyed to workers’ compensation payors; and (4) maintain a Web page that contains a complete listing of customers to whom the network is sold, leased, transferred or conveyed that is accessible to all contracted providers and updated at least twice a year and maintain a toll-free telephone number accessible to all contracted providers whereby providers may access workers compensation payor summary information and a list of lessees of the network.
This Act also adds the following requirements for workers’ compensation payors, also beginning on January 1, 2008: (1) the workers’ compensation payor’s explanation of benefits or explanation of review must identify the name of the network that has a written agreement signed by the provider whereby the workers’ compensation payor is entitled, directly or indirectly to pay a preferred rate for the services rendered; and (2) a workers’ compensation payor must demonstrate that it is entitled to pay a contracted rate within 30 business days of receipt of a written request from a provider who has received a claim payment from the workers’ compensation payor. The provider must include in the request a statement explaining why the payment is not at the correct contracted rate for the services provided. The failure of the provider to include a statement will relieve the payor from the responsibility of demonstrating that it was entitled to pay the disputed contracted rate. A payor will be deemed to have demonstrated that it is entitled to pay a contracted rate if it identifies the contracting agent who has contracted with the medical provider to pay the reimbursement at the contracted rate. This Act will become effective on June 26, 2007. However, its requirements do not begin until January 1, 2008.
Public Chapter 300 changes present law by removing a provision requiring employers to pay the Second Injury Fund assessment in cases where death results from the work related injury or occupational disease. Lastly, this Act changes present law by authorizing the Department to approve any attorney’s fee if the fee does not exceed 20 percent of the award to the injured worker, or 20 percent of the first 400 weeks of benefits in cases of permanent and total disability. This Act became effective May 30, 2007.
5. 2008 Legislative Changes
Once again there was a change to the maximum and minimum benefit rates. Temporary Benefits – The maximum weekly benefit rate for injuries occurring July 1, 2008 through June 30, 2009 is $827.00 or 110% of the state’s average weekly wage. Permanent Benefits – The maximum weekly benefit rate for injuries occurring July 1, 2008 through June 30, 2009 is $752.00 or 100% of the state’s average weekly
wage. Minimum Weekly Benefit – The minimum weekly benefit rate for injuries occurring July 1, 2008 through June 30, 2009 for both temporary and permanent benefits is $112.80.
The Legislature also attempted to clarify some issues with respect to the statute of limitations. Public Chapter 1183 (SB3791/HB3436) provides that, if a Request for Assistance is filed with the Division before the statute of limitation expires, the time within which to file a Request for Benefit Review Conference will not expire before 60
days from the issuance of a Benefit Review Report resolving the Request for Assistance.
This applies to injuries sustained on or after July 1, 2008.
This bill also states that when a request for a Benefit Review Conference has been filed with the Division for over one year without the parties requesting the mediation be scheduled, the Division may schedule a specific date for a Benefit Review Conference and give notice to the parties at their last known address. If the Benefit Review Conference is held and the employee does not appear, the Commissioner may dismiss the claim. This bill requires the Division to adopt rules relating to the issuance of impairment ratings for an employee.
The legislation also makes some slight changes to reading of statutes. This changes the terms “reconsideration” in TCA §50-6-238(d) to “administrative review”. This resolves confusion that has existed between reconsideration of a specialist’s order and reconsideration of a prior permanent partial disability award/settlement pursuant to TCA §50-6-241. Also, allows the Administrator to appoint an Administrative Review designee who is a Tennessee licensed attorney who has at least 5 years of experience with Tennessee workers’ compensation law.
Public Chapter 1041 (SB1748/HB1645) clarifies that unless you are a sole proprietor or partner (with no employees) getting paid directly by the property owner, an employer in the contracting group designated by the National Council of Compensation Insurance (NCCI) must have workers’ compensation insurance on themselves. This Act becomes effective December 31, 2009.
Public Chapter 1025 ( SB2650/HB2571) clarifies that “AMA Guides” means the 6th edition of the American Medical Association Guides to the Evaluation of Permanent Impairment, American Medical Association, which became effective January 1, 2008 and will remain in effect until a new edition is designated by the general assembly. The edition approved by the General Assembly for the date the employee is injured is the edition that shall be applicable to the claim. In the event of a release of a new edition of the American Medical Association Guides to the Evaluation of Permanent Impairment, American Medical Association, the commissioner shall conduct an evaluation of the new edition and report the commissioner’s findings and recommendations to the general assembly within six (6) months of the release of the new edition. This Act became effective May 28, 2008. It should be noted that the 6th Edition represents a significant departure from the 5th Edition and also seems to be extremely favorable to employers.
Finally, Public Chapter 835 (SB3350/HB3170) clarifies that the employer must provide appropriate panels for the employee to select each attending physician and each operating surgeon. This Act becomes effective July 1, 2008.
K. Cases on the Amended Statute
1. McConkey v. Vonore Police Dep’t, 2006 Tenn. LEXIS 204 (Tenn. March 21, 2006) Special Panel held that the 2004 Reform Act was not retroactive.
Generally, the statute in effect at the date of the worker’s injury governs the rights of the parties under workers’ compensation law absent an indication of the legislature’s contrary intent, Nutt, supra; Presley v. Bennett, 860 S.W.2d 857 (1993). An exception to the rule exists for statutes which are remedial or procedural in nature, Shell, supra. “Statutes deemed remedial or procedural apply retrospectively to causes of action arising before such acts became law and to suits pending when the legislation took effect”, Nutt, supra.
In this case the employee was sitting at his desk performing paperwork. As he stood from his chair, the employee’s “knees snapped” causing an ACL injury. The question before the court was whether this injury occurred in the scope and course of his employment. The court held that there was a causal connection between his work and the injury. But see Conner v. Chester County Sportswear, 2002 LEXIS 448 (Tenn. 2002), in which the court held that an employee’s injury to her knee as she stood to flush the toilet at a restroom at work was not work related.
2. Wolford v. Ace Trucking, Inc., 2005 Tenn. LEXIS 1027 (Tenn. Nov. 14, 2005)
The special panel upheld a trial court decision awarding 400 weeks of permanent partial disability benefits. In the case of Vinson v. UPS, 92 S.W.3d 380 (Tenn. 2002), the court previously held that there was no classification as 100% permanently partially disabled. Wolford claimed that the judge could not award 400 weeks of benefits without awarding permanent total disability. In holding that the trial court could award 400 weeks, the supreme court distinguished the holding from Vinson. Under the Act, unless and employee is adjudged to be entitle to permanent total disability benefits, the disability benefits that an employee may receive for a single injury may not exceed the “maximum total benefit.” The maximum total benefit is 400 weeks. Since the trial judge awarded the “maximum permanent partial disability allowable,” Wolford is entitled to a total of 400 weeks including temporary benefits. This case is attached
3. Overman v. Altama Delta, 2006 Tenn. LEXIS 193 (Tenn. March 16, 2006)
This case was previously discussed with respect to reconsideration. The Court found that a settlement agreement which contains a waiver provision for the right of reconsideration is unenforceable. This is based upon § 50-6-114(a) which provides that no contract or other devise shall operate to relieve any employer of any obligation created by the Act. In addition, the court stated that the Act does not contain a provision which allows for the settlement, despite the fact that the new law specifically refers to not allowing waiver after July 1, 2005. This case is attached.
4. Hubble v. Dyer Nursing Home, 188 S.W.3d (Tenn. 2006)
This case was heard by the full Supreme Court and has several issues. Hubble was a new hire who was attending an orientation session at a separate facility located 30 miles from the employer. On her way to the orientation, she was involved in a car accident along with two other employees. The first question is whether Hubble was an employee. The Court found that she was an employee since she was being paid for the orientation. The second question was whether she was in the scope and course of her employment. Generally, she could not recover under the “to and from work” rule; however, the court found that she was on a “special errand exception.” This court also addresses several issues related to subrogation. Case is attached.
5. Cantrell v. Carrier Corp., 31 TAM 24-1 (Tenn., May 30, 2006).
The issue in this case was whether the eight weeks during which employee was on leave of absence and received short term disability benefits for an unrelated illness should be excluded from calculation of the average weekly wage. The court held that the plain language of § 50-6-102(2)(A) mandates that days be deducted from the calculation that the employee did not work. There is no exception for days which employee received disability benefits. The court held that those days should be excluded.
If you have any questions or want to discuss any of this information, please feel free to contact the author or other attorneys at Spragins, Barnett & Cobb. This is not intended to replace legal advice.