Average Weekly Wage Calculation

1. Average Weekly Wage Calculation • Section 287.250.2 • Gross wages include board, rent....gratuities • Food and rent will continue during disability • Gratuities: only include if report on income taxes • Section 287.250.6 (under 21) • Increased earning capacity for next 3 years • Only applies to PPD

2. MISSOURI REVISED STATUTE 537.058 • Several new requirements before a plaintiff can set up an insurer for “Bad Faith.” • In the past, an insurer could be held liable for bad faith in some pretty egregious scenarios. • August 28, 2017, enactment of Mo. Rev. St. § 537.058 • Now some guidelines before insurers can be set up for bad faith • 537.058 requests that demands be accompanied by the following: • (1) A list of all of the claimants healthcare providers, along with an executed authorization; and • (2) A list of all of the claimants employers at the time of the injury, along with employment authorizations (only if a lost wage claim is being made). • If Plaintiffs fails to comply with 537.058, then attempt to file a bad faith claim against insurer, the demand will not be deemed a “reasonable opportunity” to settle and will not be admissible

3. MISSOURI REVISED STATUTE 537.058 • Before a plaintiff can proceed with a bad faith claim and enter into an 065 Agreement, demands must contain the following: • (1) Open for not less than 90 days; • (2) Must contain a certain Sum (or stated limits of policy); • (3) The date of loss and claim number; • (4) Thorough description of injuries sustained by Plaintiff; • (5) Names of all parties and description of all claims that will be released upon settlement; and • (6) The demand must include an offer of unconditional release to the insureds from all present and future liability under 537.060.

4. Post-Accident Drug Testing • Changes to Section 287.120.6 (reduce 50%): • Employer required to conduct drug and alcohol tests of employees within 24 hours injury • Insurer must provide employee with the drug test results within 14 days of insurer receipt of results • Employee must be given the opportunity to do a second test on the original sample • If the test is positive for a non-prescribed controlled drug or its metabolites, employee must prove that the workplace injury did not occur as a result of the drug use

5. Safety Violation Penalty • Section 287.120.5 • Injury caused by Employee failure to use safety device • Reduced 25-50% on all benefits • Employee had knowledge of rule • Employer had made reasonable effort to cause Employee to use the safety device

6. MO Case Law Updates Maria Daugherty, Senior Associate

7. Lincoln University v. Narens (Court of Appeals)--Compensability • Facts: • Employee broke her ankle. Injury occurred when she stepped off a steep edge sidewalk while on her ER’s campus, but leaving for the day. • Testimony at hearing included the fact that it was a crowded sidewalk and she had to step to the right to avoid people walking towards her. • Holding: • Distinguishing this case from Miller and Johme, Employee was not injured just because she was walking, but rather she encountered a steep drop off on the sidewalk and that was a risk source that she would not have been equally exposed to outside of the workplace in normal nonemployment life.

8. Campbell v. Trees Unlimited, Inc. • (Court of Appeals)—Idiopathic Event • Facts: • Employee was pronounced dead at the scene of a one-vehicle crash. • A witness to the accident testified that he saw the truck move first from the right lane to the passing lane, and then gradually into the median, without seeing any break lights leading up to the accident. • Employer’s medical expert indicated that “heart attack, seizure, or other idiopathic event” were all possible causes of Employee's injuries. • Claimant’s expert testified that there was no medical evidence that Employee experienced any “sudden medical event” that would have caused incapacitation • Holding: • Employer must be able to identify a sudden medical event that would have caused the work injury. Circumstantial evidence—such as the witness’s testimony in this case—is insufficient.

9. James Morris v. Captain D’s and Treasurer of The State of Missouri (Court of Appeals)—Future Medical • Facts: • Employee was injured in 2 different work accidents: a MVA, and a slip-and-fall. • Pre-existing injuries involving his right knee, back, and neck along with chest pain and high blood pressure due to heart disease. • Commission awarded benefits for PTD based on work injuries and pre-existing conditions. • Also awarded future medical treatment for pain management.   • Holding: • The fact that treatment for pain resulting from work-related injuries also treats pain related to non-work injuries is “of no consequence.”

10. Burlison v. Department of Public Safety (Court of Appeals)—Safety Violation against ER • Facts: • Employee was a nurse assistant who helped residents and distributed medication to residents. • One resident, who didn’t recognize his own strength, would touch her arm, put his arm around her waist, or rub her back. • One occasion the resident grabbed her left arm and twisted it behind her back ultimately causing a shoulder injury. • Claimant alleged a safety violation against ER based on sexual harassment committed by the resident.   • Holding: • In order to award the 15% penalty under §287.120.4, a claimant must demonstrate the existence of the statute or order, its violation, and a causal connection between the violation and the compensated injury.

11. SIF Liability, The MathDOI: Before 1/1/14 Liability for PPD: Prior injury: 10% BAW = 40 weeks Work Injury: 15% BAW= 60 weeks                                 TOTAL= 100 weeks SIF would pay load: b/w 10-20% 10% of 100 week= 10 weeks (This is SIF liability)

12. Cosby vs. Drake Carpentry, Inc.(LIRC)—Ominous Dicta • Facts: • Employee injured his left knee when a ladder slipped out from under him. • Had a substantial number of prior injuries: His rating physician found PPD ratings of 30% of the left knee for the current injury, 15% of the left knee for a 1974 injury, 25% of the BAW for two hernias from 2002, 25% of the left shoulder for a 2004 injury, and 25% of the right shoulder for a 2008 surgery. • EE had settled against ER, and was pursuing PPD against SIF. • The ALJ ruled that due to the recent legislature amendments to section 287.200, Claimant was prohibited from making PPD claims against the SIF because his injury occurred after January 1, 2014. • Holding: • No claims for PPD occurring after January 1, 2014, shall be filed against the SIF. • Dicta: • Due to the lack of benefits from the SIF, which is based on an increased load due to multiple injuries, this load may be transferred to the ER.

13. If Work Injury Occurred On Or After 1/1/2014: PTD only, BUT……EE must have medically documented preexisting disability equaling a minimum of 50 weeks of PPD which is: • Direct result of active military duty • Direct result of a compensable injury in WC, or • If not from compensable injury, must directly and significantly aggravate or accelerate the subsequent work-related injury; or • A PE PPD of an extremity, loss of eyesight in one eye, or loss of hearing, if the subsequent compensable work-related injury to the opposite extremity, or loss of eyesight in the other eye, or loss of hearing in the other ear • Conditions must combine to render EE PTD

14. Post-Injury Misconduct • Section 287.170.4 • Employee terminated from post-injury misconduct • No TTD or TPD benefits will be payable • Post injury misconduct does not include absence from workplace due to injury unless Employee is capable of working with restrictions

15. Section 287.780 • Employer cannot discharge or discriminate against Employee for exercising his rights under w/c • Adds the requirement that the exercise of rights must be the “motivating factor” in causing the discriminatory action taken by the employer, with additional language defining motivating factory.

16. Collateral Source Rule • Mo. Rev. St. § 490.715 • Pre-August 28, 2017: Plaintiffs could put on evidence of the full price of the medical billed, without regard to write-offs and adjustments. • The old law said that the initial charge was, by nature, “reasonable” value of the medical services

17. Collateral Source Continued • Post-August 28, 2017: • The major change to this statute is to what number or cost can be admitted at trial. • Under the new statute, “parties may introduce evidence of the actual cost of medical care or treatment…” • “actual cost” is defined in the statute as “a sum of money not to exceed the dollar amounts paid by or on behalf of a plaintiff…plus any remaining dollar amount necessary to satisfy the financial obligation” for the care.

18. Collateral Source Continued • Ideally: • This would reduce the outrageous numbers plaintiffs come up with, by not taking into account adjustments and write-offs, which give the Plaintiff a significant windfall. • However, Missouri Courts can’t leave well enough alone… • Does this violate the rule on Ex Post Facto laws? • Allowing Defendants to demonstrate only what was “paid” circumvents the collateral source rule

19. Collateral Source Continued • Both a Western and Eastern District of Missouri Federal Court recently held that the statute was affected a substantive right and thus, not applied retroactively. • St. Louis County case decided that new statute does no apply retroactively • Plaintiffs are arguing that the statute never precludes what was “charged,” and arguing that the operative section only says partied “may” introduce evidence of actual cost • Plaintiffs will argue that the statute is vague

20. Ruediger Formula • TTD/TPD + Medical Paid + PPD = W/C Paid • $2500 + $70,000+$15,500 = $90,000 • Gross 3rd Party Settlement – Atty fees & costs = Net 3rd Party Recovery • $65,000 - $25,000 = $40,000 • W/C paid / Gross 3rd Party Settlement x Net 3rd Party Recovery = Total Recovered by w/c • $90,000/$65,000 x $40,000= Full Amount

21. SUBROGATION AND THE OPIOID EPIDEMIC Richard Gerber, Member Matt Leffler, Member

22. OPIOID EPIDEMIC IN U.S. • Opioid Prescriptions Up 400% Since 1999 • In 2016 • 42,249 People Died From Overdosing on Opioids • 11.5 Million Misused Prescription Opioids • 2.1 Million People Misused Prescription Opioids For The First Time • $504,000,000,000 In Economic Costs • All statistics provided by U.S. Dept. of Health and Human Services

23. OPIOID EPIDEMIC & WORKERS’ COMPENSATION • Workers’ Compensation Industry Spends Approximately $3 Billion a Year on Pain Medication. • Of the $3 Billion a Year; $2 Billion a Year are Spent Specifically on Opioid Prescriptions. • Prior to 2016 When C.D.C. Guidelines Recommended Doctors Avoid Issuing Opioid Prescriptions for Longer than 3 Days; 99% of Doctors Were Prescribing Opioids for Longer Than 3 Days. • A 2012 Hopkins-Accident Research Fund Study Found that Employees Prescribed Even One Opioid Had Average Total Claim Costs 4 to 8 Times Great Than Employees with Similar Claims Who Did Not Take Opioids. • Washington’s Department of Labor and Industries Found that 42% of Employees with Back Injuries Received an Opioid Prescription. After 1 Year, 16% of Those Employees Were Still Taking Opioids. • All Non-Cited Statistics from Effective Cost Based Management, Jeffrey Forbes, August 31, 2017

24. OPIOID EPIDEMIC & WORKERS’ COMPENSATION • Opioid Addiction/Abuse Leads to Higher……. • Opioid Prescriptions for Workers • Addiction Treatment • Additional TTD • Additional Time Off Work • Additional Medical Care Related to Addiction • Death Benefits & Burial Costs Associated With Overdose and Related Medical Conditions

25. EVANS & DIXON AND SUBROGATION • Nationwide Subrogation Practice. • Multi-District Litigation in the Northern District of Ohio Including Cities, Counties, States & Third Party Payers. • Defendants are Drug Manufacturers and Distributors Who Fraudulently Pushed and Marketed Opioids Without Full Disclosure. • We are Putting Together a Team of Insurers to Join the Litigation to Recover on Behalf of Workers Compensation Carriers. • Time is of the Essence!