2013 WORKERS’ COMPENSATION REFORM

UPDATE APRIL 12, 2016 SUPREME COURT DECISION:

The Oklahoma Supreme Court today released a decision in the case of Damien Smith v Baze Corp and three other identical -- issue cases. The Smith case was presented to the full Court in September in oral argument.

In a 7-2, 38-page opinion written by Justice Norma Gurich, the Court held:

(1) Scheduled members, arms, hands, feet, legs, eyes, and ears, are exempt for evaluation for permanent partial disability using the AMA Guides.

(2) The deferral of PPD if an injured worker returns to work is UNCONSTITUTIONAL as a violation of due process of law and because it is a special law, treating members of the same class of workers differently. Justice Gurich write, "The deferral provision...reinstates the concept of fault into a no-fault system and results in a forfeiture of benefits by the injured employee."

(3) The calculation of PPD to a scheduled member shall be tied to the amount in the schedule, i.e. 275 weeks for a leg, not converted to the 350-week body as a whole limitation.

A Review of Major Changes and a
Constitutional Analysis of SB 1062

52 UNCONSTITUTIONAL PROVISIONS

Section 2 – Several changes in definitions:

(9)(4) Requires clear and convincing evidence to overcome presumption that use of alcohol or drugs did not cause an accident

(13)(c) Injuries occurring in parking lots or common areas adjacent to place of employment not compensable. (Latest case out says parking lot cases still compensable.)

(14) Cumulative trauma must result "directly and independently of all other causes" and employee must work for minimum of 180 days to be compensable.
UnconstitutionalArticle 2, Section 6 … for every wrong, there must be a remedy, this limits remedy; creates special class of employee.

(16) "Disability" allowed only if worker cannot earn same wages as before.
UnconstitutionalLimits remedy; creates different benefits for different classes of workers.

(18)(b)(11) Raises to $50,000 the threshold of annual payroll in domestic household of workers' comp to apply.

(31)(b) PPD ratings for "spine" shall use the latest edition of AMA Guides.
UnconstitutionalProvides for no official adoption of the new edition.

(33) PPD ratings to be based on current edition of AMA Guides.

(34) PPD only covers impairment that prevents a worker from returning to his preinjury or equivalent job.
UnconstitutionalLimits remedy; arbitrary; creates special class. Effect: This blatantly unconstitutional provision would prohibit the award of PPD for a worker who had a hip replacement, or a brain injury, or 3 back surgeries … but was given a desk job at his former employer. Police officers often are accommodated by their departments. This provision would not allow PPD, no matter how serious the injury, if the worker returns to work.

(45) Death benefits allowed only for a spouse from a marriage recognized by Oklahoma.
UnconstitutionalRepugnant to the full faith and credit clause of the Federal Constitution; creates special class.

Section 5 – Exclusive remedy shall apply even if injured worker is deemed ineligible to receive compensation.
UnconstitutionalLimits remedy for injury and access to Courts.

Section 6 (A)(1)(a) – Makes it a felony for attorney to omit or conceal material information relating to the claim.
UnconstitutionalInvades attorney-client privilege; contrary to discovery rules.

Section 7 (A) – Deletes long-standing prohibition of firing a worker while on TTD.

Section 7 (B) – Gives Commission exclusive jurisdiction over causes of action for discrimination or retaliation. (wrongful termination)

Section 7 (C) – Limits damages to $100,000 for back pay.
UnconstitutionalLimits remedy for injury and access to the Courts.

Section 10 (D) – Removes the $1,000 minimum of adding DHS name to child support checks.

Section 11 – Limits survivors' benefits for alien nonresidents in compensable death case.
UnconstitutionalDenial of equal protection and access to Courts.

Section 13 (B) – Mental injury only allowed if diagnosed by psychiatrist or psychologist. Total TTD and PPD benefits limited to 52 weeks, and death must occur within one year.
UnconstitutionalLimits remedy for injury and access to Courts.

Section 14 (B)(2) – Does not allow physical or mental stress to be considered in proving that claimant suffered compensable heart problem, stroke or pulmonary injury. (What other kind of stress it there?)
UnconstitutionalLimits remedy for injury and access to Courts.

Section 16 – Official Disability Guidelines (ODG) removed as mandatory treatment guidelines for all body parts except the spine. Makes ODG the "primary standard of reference" to "provide advice" to the judge. 16 (B) actually keeps ODG as mandatory for pain management.

Section 19 – Creates the Oklahoma Workers' Compensation Commission, "an executive agency of the State of Oklahoma"; Governor appoints 3 commissioners for 6-year terms, one of which is chosen from a slate of 3 submitted by House Speaker; all 3 confirmed by Senate; initial terms staggered at 2, 4, and 6 years; same pay as district judges; Governor appoints one commissioner as chair to direct the work of administrative law judges, and to hire the staff of the Commission.
UnconstitutionalViolation of separation of powers; Injured workers must be afforded justice before a Court, not an administrative agency. Article 11, Section 6 of the Oklahoma Constitution, as part of the Bill of Rights, says:

The courts of justice of the State shall be open to every person, and speedy and certain remedy afforded for every wrong and for every injury to person, property, or reputation; and right and justice shall be administered without sale, denial, delay, or prejudice.

The Constitution clearly says the "courts" – not an executive branch agency – shall be open … and speedy and certain remedy afforded for every wrong and for every injury…

Section 20 – The Commission hires an unlimited number of administrative law judges who shall have practiced law for at least 3 years and have at least 3 years workers' compensation experience.
UnconstitutionalViolation of separation of powers; executive branch appointing judges to provide a remedy reserved for the Courts.

Section 22 – Commission to make rules regarding the executive branch agency AND the Court of Existing Claims, a Court of record.
UnconstitutionalViolation of separation of powers; an executive branch agency cannot make rules for a Court … that power is specifically granted to the Oklahoma Supreme Court in the Constitution.

Section 22 – Commission sets salaries of administrative law judges and all personnel, including a staff Mediator.

Section 26 – Governor may remove any commissioner for inefficiency, neglect of duty, or misconduct in office. Charges to be heard by 3-person panel of lieutenant governor, insurance commissioner, and state treasurer.

Section 27 (A) – Upon application of any party, the Commission may order a hearing on any issue. ALJ decision to be issued within 30 days.

Section 27 (B) – Allows Commission to fill a vacancy on the Court of Existing Claims with an ALJ, an employee of the executive agency.
UnconstitutionalViolation of separation of powers; an executive agency cannot select judges for a Court of records in the judicial branch.

Section 31 – The Multiple Injury Trust Fund is placed under umbrella of Commission; present administrator is grandfathered in, and serves at the pleasure of the Governor.

Section 43 – Employer is entitled to a lien on two-thirds of the net recovery in a third-party case, after reasonable fees and costs of collection; subrogation allowed against employer's uninsured motorist coverage.

Section 45 (A)(1) – Maximum TTD rate cut by 30% to 70% of state's average weekly wage; maximum TTD period cut to 104 weeks; no payment for the first three days of TTD; a consequential injury can result in an additional 52 weeks of TTD, if proven by clear and convincing evidence. Gives Oklahoma the distinction of having the second lowest TTD maximum rate in the nation.
UnconstitutionalOther states have ruled that cutting TTD to 104 weeks is an arbitrary and unlawful limitation of remedy, especially if ALJ finds that injured worker is still temporarily totally disabled as a result of the compensable injury.

Section 45 (B)(2) – Temporary Partial Disability limited to 52 weeks.

Section 45 (C)(1) – PPD to be determined by ALJs based upon latest edition of AMA Guides, except for scheduled members. PPD reports are allowed from an MD, DO, or chiropractor

Section 45 (C)(2) – Conflicts with previous section by saying that PPD awarded by an ALJ without a report from a "treating physician" who is an MD or DO or an IME shall be an abuse of discretion.
UnconstitutionalVague; disallows a report from a chiropractor, an issue already ruled unconstitutional by the Oklahoma Supreme Court.

Section 45 (C)(5) – If an injured worker returns to the same or equivalent job, the ALJ may award PPD…but the employer or insurance company holds the award in reserve; if worker loses job, he may receive pro rata share of PPD; if worker is employed for the number of weeks of the order, there is no PPD owed; attorney's fee is paid as 20% of the deferred PPD award.
UnconstitutionalArbitrary and capricious limitation of remedy; denial of due process and equal protection; sets up special class. No other state has ever tried to eliminate PPD for a worker who returns to the same job.

Section 45 (C)(8) – Body as a whole injuries based upon 350 weeks, rather than 500, a 30% reduction in PPD benefits for non-scheduled member injuries.

Section 45 (D)(2) – A worker found to be permanently and totally disabled must file an affidavit of non gainful employment each year. Benefits will be suspended unless affidavit is filed; reinstatement "may" occur after a hearing.
UnconstitutionalBlatant unconstitutional provision that seeks to terminate benefits awarded by an unappealed, final order of either the Workers' Compensation Court or the Commission; denial of due process.

Section 45 (E)(2) – Vocational Rehabilitation Director can issue orders for voc rehab for a worker who cannot work for 90 days.

Section 45 (E)(3) – Sets up a presumption in favor of voc rehab for a peculiar list of injuries such as a heavy laborer who has a heart attack with congestive heart failure or heavy manual laborer with a 3-level back or neck fusion.

Section 45 (E)(6) – A request for vocational training must be filed within 60 days of "receiving permanent restrictions".

Section 45 (E)(8) – Allows employer to deduct tuition from vocational rehabilitation benefits from weekly compensation.
UnconstitutionalOther sections allow vocational rehabilitation benefits and TTD. Allowing employer to deduct one from the other would be denial of appropriate remedy and unconstitutional taking of property.

Section 45 (F)(2) – No award for disfigurement before 12 months after the injury.

Section 47 (A) – Presumption that death is not related to injury unless death is within one year of accident or within first 3 years of compensation payments.
UnconstitutionalLimitation of remedy; vague; contrary to other provisions that allow death benefits if evidence shows death resulted from compensable injury.

Section 50 (B) – Employer chooses physician for the first 5 days after actual knowledge of injury. If no medical provided within that time, employee gets to choose.

Section 50 (H)(3)(a) – Dilutes 2011 change that required employers to pay only for good quality MRIs.

Section 53 (C) – All future benefits are cut off if worker does not obey Commission order for IME or treatment within one month.
UnconstitutionalDenial of due process; failure to provide a valid excuse exception; vague; arbitrary and capricious; void as against public policy. What if a worker with an amputation misses an IME appointment because he has the flu? No more benefits, ever? Not even a prosthesis for his amputated leg? (Did anyone in the legislature who voted for this bill actually read this section?)

Section 56 (B) – If employer has selected the treating physician, the worker is entitled to one change of physician, but must choose from a list of 3 physicians submitted by employer.
UnconstitutionalVague; does not require specialist or list criteria for the 3 physicians; takes away from discretion of judge to provide reasonable and necessary medical treatment; does not provide adequate remedy for proper medical care.

Section 57 (A) – All future benefits for injured workers are cut off if worker misses two medical appointments without an extraordinary circumstance. Statute says lack of transportation does not qualify as an extraordinary circumstance.
UnconstitutionalVague, arbitrary and capricious; lacks reasonable basis for harsh penalty; denial of due process; lack of proper remedy. If amputee, who cannot drive because of his leg missing, misses 2 physical therapy appointments within a year's period because his ride canceled, he is not entitled to any further benefits, not even a prosthesis or PPD? Come on!!! Who wrote this???

Section 61 – Notice of a hernia must be given within 5 days of occurrence or benefits are barred.
UnconstitutionalArbitrary and capricious; no reasonable basis for harsh penalty.

Section 62 – 8 weeks soft tissue TTD provisions apply even if the employer did not initially provide treatment.

Section 63 – Sets up obligation of employer to file a number of reports; if a report is not filed, employer is subject to $500 fine; if an employer does not pay the civil penalty, Commission can sue in district court to SHUT DOWN EMPLOYER'S BUSINESS.
Unconstitutional– A rbitrary and capricious TOWARD EMPLOYERS. Penalty doesn't fit the omission. Giving the Commission authority to seek the closure of a business for not paying a $500 fine is a little over the top!!!

Section 65 (D)(2) – A contagious or infectious disease is not compensable unless contracted in a hospital or sanitarium where that disease is treated.

UnconstitutionalDenial of adequate remedy; what about home health care workers?

Section 65 (F)(1) – An occupational disease is not compensable unless the disease is "peculiar" to the particular employment.
UnconstitutionalDenial of adequate remedy; sets up special class; arbitrary; no reasonable basis for excluding occupational disease simply arising out of and in the scope of employment.

Section 66 (B) – Disability or death from silicosis or asbestosis are presumed to be not compensable unless worker has breathed dust for 5 of the last 10 years and worked in the state for 2 years.
UnconstitutionalDenial of adequate remedy; sets up special class; arbitrary; no reasonable basis for excluding occupational disease simply arising out of and in the scope of employment.

Section 67 (A)(2) – Written notice must be given to employer of an occupational disease or cumulative trauma injury within six months of first distinct manifestation or within six months of death.
UnconstitutionalDenial of adequate remedy; sets up special class; arbitrary; no reasonable basis for excluding occupational disease simply arising out of and in the scope of employment; conflicts with other statutes of limitation in the Act; vague.

Section 69 (A) – A claim for all injuries, except occupational disease, must be filed within one year of injury. If the worker receives no medical treatment or benefits in the one year following the filing, the claim is barred. Occupational disease statute of limitations is 2 years. Death SOL is 2 years. IF NO REQUEST FOR A HEARING IS MADE WITHIN 6 MONTHS OF FILING, THE CLAIM MAY BE DISMISSED WITH PREJUDICE.
UnconstitutionalDenial of due process; arbitrary; no reasonable basis for harsh penalty for not going to the doctor for a year; treats employees differently.

Section 69 (B) – A "claim for additional compensation" (not defined) is barred unless filed within one year of the date of last payment of disability or 2 years from the injury, whichever is greater. DOES THIS MEAN CHANGE OF CONDITION TIME LIMIT IS NOW 1 YEAR?
UnconstitutionalVague; denial of due process and equal protection; provides no adequate remedy, especially if worker is still under active medical treatment two years after the injury.

Section 70 – Sets up a new "preliminary conference". The Commission staff legal adviser confers with an unrepresented claimant. The conference "shall be held" in the county where the accident occurred if any party desires. Stated intent is to keep EITHER the claimant or the employer from hiring a lawyer.

Section 71 (E) – Does not allow for revivor of disability award.
UnconstitutionalEliminates a vested benefit; contrary to other provisions of the Act.

Section 72 (A) – During a hearing, an ALJ or Commission shall not be bound by technical or statutory rules of evidence or formal rules of procedure.
UnconstitutionalDenial of due process; vague.

Section 72 (B) – ALJ is required to make specific findings of fact on-the-record; A joint petition record does not have to be stenographically recorded. The ALJ or legal adviser shall record the hearing at no cost to the parties.

Section 72 (C) – Medical reports must be sent to other party 7 days before hearing; witnesses must be listed 7 days before hearing.

Section 73 – If a party refuses to comply with final judgment or fails to pay an uncontroverted medical bill or other expense within 45 days, the party can be held in contempt, subject to a fine up to $10,000.

Section 75 – The Commission may direct that depositions of witnesses be taken.

Section 78 (A) – A decision by an administrative law judge may be appealed to the Commission "only if it determines that the decision was against the clear weight of the evidence or contrary to law". Argument before the Commission shall be recorded only if requested by a party.

Section 78 (C) – A decision by the Commission may be appealed to the Oklahoma Supreme Court. The statute gives an exclusive list of reasons Supreme Court can use to modify, reverse or remand.
UnconstitutionalThe Supreme Court cannot be limited by the legislature in the scope of an appeal.

Section 80 (A) – The Commission may review a prior, final decision or award within 6 months of the final payment of compensation fixed in the award, even looking at wage, rate, and amount of compensation awarded.
UnconstitutionalVague; denial of due process; destroys sanctity of the concept of a "final order".

Section 82 (A) – Sets attorney fees at 10% of TTD or TPD and 20% of PPD or PTD in "controverted" claims. If a written offer to settle PPD or PTD is made, and rejected, claimant's attorney can only received 30% of the difference between the award and offer. Controverted is defined as a contested hearing on normal issues of TTD, compensability, etc. A request for change of physician is not "controverted" and an additional attorney's fee of $200 is allowed. It is not a controverted claim if the worker or his lawyer withholds pertinent information about the claim.
UnconstitutionalVague; violation of attorney-client privilege; arbitrary and attempt to limit access to Courts because of no time limit for employer to make offer.

Section 82 (A)(2) – Strange section that seems to allow the attorney fee to be IN ADDITION to the award in a controverted claim against the Multiple Injury Trust Fund.

Section 85 – "Clean" claims for services rendered are payable within 30 days of receipt. Clean means it includes proper documentation.

Section 86 – More bureaucracy. In addition to pre trial stipulations required by other sections, this section says an employer must, WITHIN 15 days of notice of an injury or death, file a STATEMENT OF CONTROVERSION. The form doesn't mean anything, because the next paragraph says they can controvert later and does not waive any defense. EVEN MORE BUREAUCRACY. If the employer cannot make a determination within 15 days of the compensability of the claim, an Application for Extension of Time must be filed.
UnconstitutionalVague; conflicts with other sections; denial of due process – does not give employer reasonable time to investigate the claim to determine if it is controverted.

Section 87 – After a joint petition, the Commission shall order that all claims between the parties have been settled. What about other pending cases? What about pending district court cases OR subrogation?
UnconstitutionalVague; denial of due process on other pending claims; arbitrary – no reasonable basis to order that all claims are settled.

Section 89 – Allows employer to deduct from a PPD award any wages paid in excess of the maximum TTD rate.
UnconstitutionalVague; creates special class; denial of adequate remedy for PPD.

Section 92 – Requires employers to file additional forms – (1) when TTD payments being, (2) when TTD payments stop, (3) when PPD payments begin, and (4) when PPD payments stop. $100 per occurrence fine if forms are not filed.

Section 94 – An incarcerated worker shall not be eligible to receive medical or disability benefits.
UnconstitutionalDenial of due process and equal protection; denial of adequate remedy for injury; arbitrary and capricious (no medical care or PPD for losing a leg in an admitted injury?) Current law just does not allow TTD to be paid.

Sections 107-120 are the OPT OUT provision – The Oklahoma Employees Injury Benefit Act.

Section 108 (A)(9) – Spouses covered in death claims in an OPT OUT plan only if marriage is recognized in Oklahoma.
UnconstitutionalViolates full faith and credit clause of the Federal Constitution.

Section 109 – Describes an OPT OUT benefit plan to be approved by the State Insurance Commissioner. Subsection D states that the Commission, state courts, or administrative agencies cannot make additional rules to govern the OPT OUT benefit plan.
UnconstitutionalVoid as against public policy; denial of due process; limits access to the Courts for remedy for an injury; creates special class of employees.

Section 110 (C) – The last sentence completely takes OPT OUT of the workers' compensation system. "The Administrative Workers' Compensation Act shall not define, restrict, expend or otherwise apply to a benefit plan."
UnconstitutionalVoid as against public policy; denial of due process; limits access to the Courts for remedy for an injury.

Section 111 – Allows OPT OUT employers to buy an insurance policy or self-insure.

Section 111 (I) – Any insurance agent or broker cannot be sued if an employer is sued in district court for a covered injury.
UnconstitutionalThe legislature cannot void a future claim that might be based upon an insurance contract, fraud, or other causes of action outside the scope of the workers' compensation law.

Section 116 (A) – Gives exclusive remedy to employer that OPTS OUT of workers' compensation administrative system; also gives exclusive remedy on "other causes of action".
UnconstitutionalVague; fails to provide adequate remedy for wrong; denial of due process and equal protection; void as against public policy. Appears to provide exclusive remedy for wrongful discharge, discrimination, and "other causes of action".

Section 116 (B) – Allows a duly appointed arbitrator to determine if an intentional tort exists against an employer.
UnconstitutionalVague; fails to provide adequate remedy for wrong; violates separation of powers, giving arbitrator power to supersede a Court remedy.

Section 116 (D) – Allows employer to deduct from any intentional tort award any benefits paid under the OPT OUT benefit plan.
UnconstitutionalFails to provide adequate remedy for wrong; denial of due process and equal protection; violation of separation of powers.

September 118 (B)(1-6) – If an OPT OUT employer denies a claim or any part of a claim, the appeal is first to a 3-person committee appointed by the employer and then, within one year to the Workers' Compensation Commission.
UnconstitutionalAllows an executive branch agency to determine a decision based upon a contract, a benefit plan, of the employer; lack of adequate access to the Courts.

Sections 121-149 – Are known as the Workers' Compensation Arbitration Act, which allows employers to develop a mandatory arbitration plan approved by the Commission to decide all issues in a work-related injury. The exhaustive process allows an arbitrator to order discovery, subpoena witnesses, and issue protective orders. Appeals from arbitration end up in state district court.
Unconstitutional – The entire scheme is unconstitutional because it is an improper delegation of the powers of both the executive and judicial branches in making decisions affecting injured workers'; void as against public policy.

Section 153 (C) – Poorly drafted section appears to make mediation MANDATORY AND BINDING in claims against the Multiple Injury Trust Fund and medical treatment issues subject to a certified workplace medical plan.

Section 154 (B) – Another form for employers to file. A Notice of Contested issues must be filed in controverted claims.

Section 154 (C) – Requires, within 7 days of receipt of request for benefits, the Commission set a prehearing conference or administrative hearing. RESPONDENT ONLY HAS 60 DAYS FROM FORM 9 TO COMPLETE DISCOVERY AND SECURE A MEDICAL EVALUATION.

Section 159 (A) – Appears to allow revivor of PPD final order in the event of worker's death, contrary to other provisions of the Act.

Section 169 (A) – Allows current 10 judges to make up a court of record, the Court of Existing Claim, a new name for the Workers' Compensation Court, to hear claims for injuries prior to February 1, 2014. When a current judge's term expires, the position is dissolved. If a vacancy occurs before the expiration of a term, the Commission shall name a replacement Judge. The Court of Existing Claims is extinguished on July 1, 2020, because of dissolution of positions.
UnconstitutionalBlatant violation of separation of powers, allowing an executive branch agency to appoint a judge of a Court of record; Denial of due process and violation of separation of powers because of phase out of Court of Existing Claims on July 1 ,2020. What happens to the thousands of claims for injuries before February 1, 2014, which will remain open for continuing benefits (permanent and total, maintenance medical, prosthetics, etc.)? The Commission has no authority to decide claims before February 1, 2014. Who will decide disputes in those claims?

Section 169 (J) – An appeal from the Court of Existing Claims shall be heard by the Workers' Compensation Commission.
Unconstitutional – Violation of separation of powers – appealing a decision of a Court of record to an executive branch agency.