There has been growing governmental concern in the State of Colorado over uninsured employers. Changes to the Workers’ Compensation Act in 2005 created stiffer fines for employers who fail to comply with mandated coverage for workers’ compensation benefits. The Division of Workers’ Compensation Director is required to impose a fine of $250 per day for an initial offense. The 2005 changes to Colo. Rev. Stat. § 8-43-409 included an increased fine range for companies that were non-compliant for a second time. Those companies now face up to a $500 per day fine. This statute specifically states that the ‘fine’ levied under the statute shall be the ‘penalty’ within the meaning of Colo. Rev. Stat. § 8-43-304, but is in addition to the increase in benefits owed under Colo. Rev. Stat. § 8-43-408.

Colo. Rev. Stat. § 8-43-409 governs the procedures for non-compliant employers. First, the Director is empowered to investigate and notify the non-compliant employer of their right to request a prehearing conference over the coverage issue. Second, if the Director determines that the employer is non-compliant, then the Director must take at least one of the following actions: (1) order the non-compliant employer to cease and desist its business operations while it is non-compliant; and/or (2) assess fines. After a cease and desist order is entered, the Attorney General immediately starts proceedings against the non-compliant employer to stop doing business. Further imposition of any fine under this statute, after appeal time frames have run, can be lodged with the District Court as a judgment. 25% of any fine collected would be directed to the workers’ compensation cash fund under Colo. Rev. Stat. § 8-44-112, with the balance going to the state general fund. Finally, any fine under the statute is in addition to the increased benefits owed by the non-compliant employer under the preceding statute, Colo. Rev. Stat. § 8-43-408. This statute increases ordinary benefit exposure by 50% for non-compliant employers and puts in place a bonding requirement for the non-compliant employer.



Significant fines handed down to non-compliant employers have received press attention in the past. As reported in the Denver Post on August 29, 2016, a student run café at the University of Colorado was shut down after it was fined more than $224,000 for not having workers’ compensation coverage. The Complete Colorado, a blog run by local political commenter Todd Shepard, documented a $271,000 fine against a Longmont garden business for failing to comply with coverage requirements, as well as a $516,700 fine levied against fast food restaurant, El Trompito Taqueria. These fine amounts increased quickly as the result of the daily multiplier. The time frames of noncompliance were largely assumed by the Director because the employer could not prove coverage during these intervals. For a small employer to receive such a large fine can effectively put the employer out of business, leaving the injured worker with no practical recourse for benefits.

There are mitigating circumstances that may reduce fines levied against non-compliant employers. For instance, if the employer can show compliance once it has become aware of a lapse in coverage, this will mitigate the fine amount. A non-compliant employer paying benefits, essentially stepping into the shoes of a would-be insurer, also helps mitigate the fine.

The Director is obligated to try to ensure compliance while not effectively forcing employers out of business. This should be done with an eye toward trying to keep injured employees from having no benefit flow or treatment. When an injured worker has no coverage, it forces the injured worker to seek medical treatment through personal healthcare insurance or, or if no health care coverage exists, through self-pay methods, emergency room visits, treatment write-offs and/or charity. Many healthcare insurers reject coverage for treatment of a work injury since that liability should fall on a workers’ compensation carrier or employer. Further losses from unpaid and unreimbursed medical treatment through emergency rooms, write-offs or charity are ultimately passed on to employers and employees at large, who bear the burden of increasing insurance premiums as the result of uninsured employers and their injured employees.



Proposed House Bill 17-1119 attempts to address payment for injured workers who do not have coverage through their non-compliant employer. HB 17-1119 is currently a proposed Bill, but is likely to be approved later this year. The Bill was introduced on January 20, 2017, and must still pass the State House and Senate, as well as be signed into law by the Governor.

Coverage:  The fund would cover claims occurring on or after January 1, 2019 that have been adjudicated compensable, where the employer has been determined uninsured and has failed to pay the full amount of benefits ordered. The fund does not cover a partner in a partnership or owner of a sole proprietorship, the director or officer of a corporation, a member of an LLC, the person who is responsible for obtaining workers’ compensation coverage and failed to do so, someone who is eligible for coverage but elected to opt out, or anyone who is not an “employee” under the terms of the Act.

Funding:  The fund is made up of the fines and other revenue collected by the Division that is specifically allocated to the fund, along with any gifts, grants, donations or appropriations. There is also a separate 25% paid to the fund based on benefit amounts owed by non-compliant employers.

Governance:  The fund is run by a board that includes the Director and four individuals representing each of the following: employers, labor organizations, insurers and a claimant attorney.  The board serves for a term of 3 years and may be reappointed with the exception of the initial board members. With regards to the initial board, one member shall serve for an initial term of three years, two members for a two-year term and one member for a one year term.  No one can serve more than three consecutive terms.  Benefits are to be paid at the ordinary rates. If the fund does not have enough money in the fund, the board can reduce the rates.  The board is unpaid.

Powers:  The fund has ordinary powers attendant to handling workers’ compensation claims.  Of interest, the fund has the power to intervene as a party in a case involving an uninsured employer, or other potentially responsible entity. Upon acceptance of the claim into the fund, a lien is created against any assets of the employer and its principles for the amount due as compensation. This lien has priority over all other liens except delinquent tax payment liens.  The lien can be perfected by filing in the appropriate court. Further, the fund becomes something akin to a secured creditor of any insolvent employer for amounts the fund determines may be needed to pay uninsured losses. Payment by the fund does not relieve the uninsured employer of payment obligations for benefits and the fund has the power to pursue any employer who defaults on those payments in District Court.



The proposed legislation creates a small safety net for injured workers of uninsured employers.  Given the ever-increasing costs of medical care, there is a valid question as to whether funding would be adequate to cover workers’ compensation benefits claimed by the injured workers.  Further, it will be interesting to see if respondents may be required to give notice to the fund in cases where liability is being adjudicated on a statutory employer issue. The fund may have a recognizable interest in such litigation, as the burden of paying workers’ compensation benefits would fall on the fund should there be a determination of no coverage. It is not unusual for a carrier or employer to settle potential statutory employer liability on a “denied” basis as opposed to proceeding to litigation, where adjudication might make statutory employer liability clear. The fund intervening in this type of case may prevent pre-adjudication settlement from occurring without some consideration being paid to the fund in the “denied” settlement as well.

Legal Connection Firm Newsletter – February 2017

Thank you for taking the time to read our Firm newsletter. Our newsletter provides a monthly update on recent developments within our Firm,
as well as in the insurance defense community.

 Please follow us on LinkedIn


In the News

PWC-logoLee + Kinder LLC sponsored the PWC 8th Annual Bowling tournament on Friday, February 10, 2017. The Firm was well represented with 3 teams entered. Team “Spare Us” won the event behind the strong showing of Richard Lutterman who was the highest scoring player in the tournament! Rich was accompanied on the team by Cheryl Stevens, Harvey Flewelling and Frank Cavanaugh. A good time was had by all and money was raised for the PWC scholarship fund.


The 2017 Colorado Workers Compensation Educational Conference is being held April 17-19 at the Broadmoor in Colorado Springs. Lee + Kinder LLC is an event sponsor. We invite you to join us for this educational event.


Victory Lap


Sheila Toborg Of Counsel Attorney at Lee & BrownIn Wilks v. The Home Depot, Of Counsel Sheila Toborg and Associate Stephen Abbott successfully defended against a request for right wrist surgery. Respondent presented the testimony of Dr. Fall to prove that Claimant’s alleged mechanism of injury could not have caused the arthritic condition for which Claimant was seeking treatment. The ALJ ultimately found that, although Claimant needed the recommended procedure, the need for the procedure was not related to Claimant’s admitted injury. The ALJ relied on Dr. Fall’s persuasive testimony giving little weight to Claimant’s expert who admittedly relied on some “guesswork” in reaching his conclusions.


Fran McCracken Of Counsel Attorney at Lee & BrownOf Counsel M. Frances McCracken requested an order striking Claimant’s request for disfigurement benefits in Rodarte v. Sam’s Club. Claimant suffered an industrial injury to her right middle finger and underwent surgery. Afterwards, Claimant sought disfigurement benefits. Ms. McCracken presented undisputed evidence and testimony from the Claimant that she was scheduled to undergo a second surgery that could correct some of the visible disfigurement. The ALJ determined an award for disfigurement was not yet ripe and struck Claimant’s Application without prejudice.


Fran McCracken Of Counsel Legal Analysis





Why is it important to know if the person working for you is an employee or an independent contractor? Because the answer determines if he or she must be covered by your workers’ compensation insurance policy. An incorrect guess exposes you to substantial penalties under Colorado’s Workers’ Compensation Act.

A worker’s status as an “employee” versus an “independent contractor” has been one of the most heavily litigated areas of workers’ compensation since the enactment of Colorado’s Workers’ Compensation Act in 1915. Fortunately, after decades of appellate decisions addressing the independent contractor versus employee issue, in 1993, the General Assembly enacted Section 8-40-202(2), C.R.S. Click here to continue reading this article.


Cases You Should Know

Employer mandate: not optional. In two opinions issued on the same day, In the matter of Angels of God Early Learning Center, Inc. (November 8, 2016) and In the Matter of AWF, LLC d/b/a Cherry on Top (November 8, 2016), ICAO upheld penalties issued by the Director following second violations of the Workers’ Compensation Act requirement that an employer maintain workers’ compensation insurance coverage. Both employers argued on appeal that they did not receive notice that their insurance coverage had lapsed. The employer in AWF further argued that it obtained new coverage upon notice from the Division and that no employees had been injured in the meantime. In both cases ICAO upheld the penalties issued by the Division, noting that an employer is not entitled to a hearing, when the employer did not avail itself of the opportunity for a prehearing conference. Moral of the Story: When the Division issues penalties on an uninsured employer, and the employer does not seek a prehearing to challenge the fines, the employer waives its right to a hearing.


“You don’t need more treatment, but I didn’t say you were at MMI.” In Dean v. Southwest Airlines, W.C. No. 4-988-024-01 (November 7, 2016), a flight attendant alleged injuries to multiple body parts, including the ankle, as a result of falling due to motion of the airplane on which he was working. The ALJ found that the ankle injury resolved within two days and required no additional medical treatment and that the other injuries were unrelated to the incident. The Claimant appealed, arguing that the ALJ improperly ruled on whether Claimant’s ankle injury was at MMI without having first undergone a DIME. Noting that MMI was not at issue, ICAO upheld the ALJ’s Order finding the decision merely denied additional medical and temporary disability benefits based on a determination of causation. Moral of the Story: An ALJ’s denial of further medical and temporary disability benefits does not equate to a finding of MMI.


Collateral attack via DIME. In Jackson v. Select Comfort Corp., W.C. No. 4-914-418-03 (November 17, 2016), an ALJ found that a Claimant’s lumbar condition was not causally related to the admitted work injury. The Claimant later received an impairment rating from a DIME physician for the lumbar condition. The Respondents challenged the DIME’s impairment rating at hearing before a different ALJ. The ALJ found that the Respondents failed to overcome the DIME’s impairment rating by clear and convincing evidence. The Respondents appealed arguing that causation and relatedness could not be relitigated through a collateral attack on the first ALJ’s Order by means of a DIME. ICAO upheld the second ALJ’s finding noting that, although both hearings involved the question of causation, the burdens of proof were different. Therefore, they concluded that issue preclusion did not apply. Moral of the Story: Insofar as a DIME’s MMI or impairment rating determinations turn on relatedness, the DIME physician is not bound by a prior ALJ’s findings.


John Hancock, PA-C. In MacDougall v. ICAO, 2016CA705 (December 15, 2016)(nsfp), a Claimant was receiving TTD benefits on a GAL. The Respondents then filed a FAL admitting for no PPD benefits, relying on a medical report by the Claimant’s treating PA with the stamped signature of the Claimant’s ATP. The report stated that the Claimant was at MMI with no restrictions, but did not address an impairment rating. Upon receipt of a letter from the ATP stating that Claimant needed an impairment rating and review by a Level-II accredited physician, the Respondents filed an Amended GAL that terminated TTD as of the date of the PA’s report. The Claimant sought penalties on the basis that Respondents should not have terminated TTD based on a “fraudulent report.” However, the ALJ denied penalties noting that Respondents terminated TTD based on the PA’s full-duty release, which had not been rescinded by the ATP. ICAO and the Court of Appeals affirmed. Moral of the Story: Respondents may rely on a PA’s report if it bears the ATP’s stamped signature insofar as the ATP does not rescind the parts of the report on which the Respondents rely.


“Everyone has an Achilles’ heel.” In Kendrick v. United Airlines, W.C. No. 4-991-007-01 (Nov. 15, 2016), the Claimant sought review of an ALJ’s Order finding that Claimant’s injury did not occur within the course and scope of employment and subsequently denying Claimant’s temporary disability and medical benefits. Claimant was a co-pilot for the employer and was scheduled to spend the night in Seattle, Washington. After arriving at his hotel, Claimant went on a jog and ruptured his Achilles’ tendon ascending a flight of stairs. Claimant alleged that his jogging was within the course and scope of his employment. On appeal, the Claimant argued that the practice of running falls within the category of personal comfort activities found to be within the course and scope of employment. ICAO explained that participation in recreational activity is usually excluded from the context of employment and also excluded from being considered an element of the comfort doctrine. The Claimant’s jogging was considered a substantial deviation from the Claimant’s travel status. ICAO upheld the ALJ’s Order that Claimant’s injury did not occur within the course and scope of his employment. Moral of the Story: Unless the type of recreational activity is considered part of the employment, participation in recreational activities is usually outside the scope of most employment.


“Special employment hazard.” In Leal v. UPS, W.C. No. 4-977-019-02 (Aug. 15, 2016), the Claimant sought review of an ALJ’s Order denying medical and temporary disability benefits and dismissing the claim as not compensable. The Claimant alleged that he hurt his back while working for the employer. The Claimant had a history of back injuries including a 15-year history of sciatica symptoms. The Claimant underwent significant treatment until the DIME physician, Dr. Lesnak, placed him at MMI without impairment or restrictions. Another physician, Dr. Gellrick, later concluded that the Claimant was suffering from an aggravation of previous symptoms, concluding that the Claimant was not at MMI. At hearing, the Claimant testified that he had no history of back pain prior to the date of injury. Dr. Lesnak testified that the Claimant’s previous testimony regarding his prior episodes of back pain contradicted several medical records. Dr. Lesnak further testified that the Claimant’s symptoms, subsequent to the date of injury, were due to Claimant’s age, weight, and the degenerative condition of his spine. The ALJ ultimately did not find the Claimant’s testimony credible concluding that the Claimant failed to provide a causal link between his work duties and his industrial injury. On appeal, the Claimant alleged that the ALJ misapplied the special hazard of employment doctrine to deny compensability of the claim. ICAO noted that the ALJ’s Order showed that she applied the hazard of employment analysis to the extent she found no work activities were involved in the Claimant’s symptoms or need for treatment. Citing the City of Brighton v. Rodriguez, ICAO noted that in order to to render an injury compensable, a special employment hazard must have contributed to the injury even if the most direct cause of that injury is a preexisting idiopathic disease or condition. ICAO noted that the ALJ found no evidence that twisting at work contributed to the Claimant’s injuries. ICAO then concluded that the ALJ located the Claimant’s injury in the category of personal risk, which is not compensable, and the exception of the hazard of employment did not apply. Moral of the Story: Personal risk injuries are not compensable and the special hazard doctrine only applies when there is a preexisting idiopathic disease or condition and the special employment hazard contributes to that injury.


“Make sure your stories line up.” In Parrot v. Havana Auto Parts, W.C. No. 4-987-940-02 (Dec. 29, 2016), the Claimant sought review of an ALJ Order denying and dismissing the Claimant’s workers’ compensation claim. The Claimant contended that he injured his left knee while engaging the emergency brake in a work truck. He did not report his injury immediately to the employer. An employee for the employer credibly testified that there were no records documenting complaints about the truck’s emergency brake. Dr. Paz later performed an IME and concluded that the Claimant’s injuries were not causally related to the date of injury due to the Claimant’s inconsistent accounts of the mechanism of injury. At hearing, the ALJ credited the testimony of Dr. Paz and disregarded other medical opinions. On appeal, ICAO upheld the ALJ’s findings noting that an if ALJ determines that a Claimant has met their burden of proof to establish a compensable injury, then the appeals court must give deference to an ALJ’s resolution of conflicts of evidence and plausible inferences drawn from the record. Moral of the Story: An ALJ is given great deference in his/her determinations at hearing.


“Mager pain.” In United Parcel Service v. Industrial Appeals Office, Colorado Court of Appeals No. 15CA2142 (Nov. 10, 2016), the Court of Appeals affirmed an ICAO Order affirming an ALJ’s Order awarding the Claimant, Jennifer Magers medical benefits and temporary total disability benefits, and rejecting employer’s intervening cause and injurious practice arguments. While making a delivery, the Claimant developed pain in her left hamstring and lower left buttocks. She could not recall a specific event that precipitated the pain. It was later determined that Ms. Magers had a moderate sized posterior and left lateral disc protrusion and extrusion of her L4-5 and L5-S1 vertebrae. Dr. Jernigan opined that this was a result of her work performed on the date of injury. Ms. Magers took a road trip with her family, and reported a sudden increase in back pain after shifting her body weight in the car. An IME physician opined that Ms. Magers’ condition was not work-related because Ms. Magers had initially indicated to her primary care provider that the pain began four to five weeks before her visit, which would have put the injury outside the reported accident date. At hearing, the ALJ found that Ms. Magers had established she suffered a work-related injury, and rejected the Respondents’ injurious practice and intervening cause arguments. The Respondents challenged that (i) Ms. Magers sustained a compensable injury; (ii) Ms. Magers’s use of an inversion table was an intervening cause; and (iii) Ms. Magers engaged in an injurious practice by going on vacation. After applying the substantial evidence test in determining whether the evidence supports the ALJ’s findings, the Court of Appeals concluded: (i) Ms. Magers’ testimony and the medical opinions establish that Ms. Magers suffered a compensable injury, and Ms. Magers’ inability to pinpoint a specific event that caused her pain was not enough to indicate that the ALJ erred in crediting her testimony; and (ii) Ms. Magers’ one-time use of an inversion table and her family road trip were not a likely cause or contributed to her injury. After concluding that the ALJ resolved conflicting evidence, the Court of Appeals upheld the ALJ’s and ICAO’s findings. Moral of the Story: An ALJ is given great deference in weighing medical opinions and hearing testimony to determine whether a claimant suffered a compensable injury, whether a claimant participated in an injurious practice, and whether there was an intervening cause.


DIME opinions are great and all, but are not that impressive in evaluating PTD benefits: In this next case, the Claimant sustained multiple injuries when she tripped and fell over a box. The DIME physician opined Claimant had impairments to her left shoulder and left knee, but no impairments to her spine. Claimant sought PTD benefits. The ALJ credited Claimant’s IME physician that Claimant’s spine injuries were related to the fall and awarded PTD benefits. Respondents appealed and argued the ALJ did not properly apply the correct burden of proof in awarding PTD benefits. The Court held that this burden of proof did not apply in the context of PTD benefits. Rather, the PTD analysis focused on the Claimant’s ability to earn wages and Claimant was only required to show a causal link between her disability and work injury. Dish Network v. ICAO, W.C. No. 4-918-651 (nsfp). Moral of the story: The DIME physician’s opinion regarding causation of additional body parts does not carry presumptive weight in evaluating PTD benefits.


Why is it important to know if the person working for you is an employee or an independent contractor?  Because the answer determines if he or she must be covered by your workers’ compensation insurance policy. An incorrect guess exposes you to substantial penalties under Colorado’s Workers’ Compensation Act.employeeVSic


A worker’s status as an “employee” versus an “independent contractor” has been one of the most heavily litigated areas of workers’ compensation since the enactment of Colorado’s Workers’ Compensation Act in 1915.  Fortunately, after decades of appellate decisions addressing the independent contractor versus employee issue, in 1993, the General Assembly enacted section 8-40-202(2), C.R.S.  According to section 8-40-202(2), C.R.S., anyone performing work for you is an employee, unless such individual is:


  • Free from control and direction in the performance of the service, and
  • Customarily engaged in an independent trade, occupation, profession, or business related to the service performed.


The statute sets forth nine factors which give rise to a presumption that a worker is an independent contractor as opposed to an employee.  The statute contains various factors the courts will consider in determining whether a worker is, based on the totality of the circumstances, “engaged in an independent trade, occupation, profession or business”.  For example, if the worker has a separate business name, carries his or her own business insurance, has business cards, carries workers’ compensation insurance on any employees, is paid at a contracted rate, submits invoices for the work being performed, with payments being made to the named business, is performing services for other companies at the same time he or she is working for you, the facts suggest the worker is independent and you may not be required to cover him or her under your workers’ compensation policy.


The statute also requires the worker to be “free from control and direction in the performance of their services”.  If the worker provides their own tools and necessary supplies, performs the services being contracted on their own schedule, exercises independent judgment in performing the services and how they choose to perform them, again these facts suggest the worker is free from control and independent.  Unfortunately, the courts have repeatedly held there is no single dispositive factor, or series of factors, resulting in proof of an employer-employee relationship or independent contractor status under section 8-40-202(2), C.R.S.


The statute does provide for the use of a document to satisfy its requirements by a preponderance of the evidence.  If the parties use a written document to establish an independent contractor relationship, it must be signed by both parties and contain a disclosure, in type which is larger than the other provisions in the document or in bold-faced or underlined type, that the independent contractor is not entitled to workers’ compensation benefits and is obligated to pay federal and state income tax on any moneys earned pursuant to the contract relationship.  All signatures on the document must be notarized.  Such a document creates only a rebuttable presumption of an independent contractor relationship between the parties.


Still confused or unsure?  Please call Lee + Kinder LLC to discuss the facts of your situation.

Legal Connection Firm Newsletter – January 2017

Thank you for taking the time to read our Firm newsletter. Our newsletter provides a monthly update on recent developments within our Firm,
as well as in the insurance defense community.

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Victory Lap

Karen Gail Treece Member Lee & Brown In Dumas v. Sodexo and New Hampshire Insurance Company, Member Karen Treece defeated Claimant’s request for workers’ compensation benefits. Claimant alleged he slipped and fell while working in the kitchen and sustained multiple injuries. Ms. Treece presented credible evidence from the employer that established Claimant was disrespectful, insubordinate, and defiant to his employer, as well as disrespectful and intimidating toward his staff. ALJ Jones did not find the Claimant credible, as he provided an inconsistent medical history to the medical providers. ALJ Jones denied and dismissed the claim.


Joseph Gren Attorney at Lee & BrownMember Joseph Gren and Associate Daniel Mowrey defeated Claimant’s attempt to overcome the DIME physician’s opinions as to apportionment by clear and convincing evidence in Garciav. United Parcel Service and Liberty MutualInsurance. The DIME physician apportioned Claimant’s rating with the rating she received for her 2008 injury. Respondents admitted for the apportioned rating and filed a Final Admission of Liability (FAL). Claimant filed an Application for Hearing contesting the apportionment. Claimant alleged that the conditions from her current injury were not present in the prior injury and apportionment was therefore not appropriate. Claimant further argued she needed to overcome the DIME’s opinion by only a preponderance of the evidence burden. ALJ Jones found that Claimant provided no new medical evidence which had not been reviewed by the DIME physician in his determination of apportionment. Mr. Gren discredited Claimant by putting forth medical records that revealed her testimony was not consistent with the medical records. ALJ Jones credited Respondents’ case law met the clear and convincing standard and found that Claimant failed to overcome the DIME’s opinion as to apportionment.


Fran MCCracken Of Counsel Attorney at Lee & BrownOf Counsel M. Frances McCracken successfully defeated Claimant’s request for medical benefits and recovered an overpayment in the amount of $12,841.25 for Respondents. In Gomez v. The Brickman Group, LTD. and Indemnity Insurance Company of North America, Claimant sought maintenance medical benefits in the form of lumbosacral injections. Ms. McCracken presented expert medical testimony that additional lumbosacral injections recommended by Claimant’s ATP were not reasonable, necessary or related to the admitted injury. Ms. McCracken further argued that Respondents should be allowed to recover an overpayment of temporary total disability benefits paid after Claimant was placed at MMI. ALJ Cannici found that Respondents were entitled to recover the full overpayment of benefits after MMI placement. The ALJ further found Respondents’ expert medical testimony credible and persuasive, and therefore denied and dismissed Claimant’s request for lumbosacral injections.

In Chism v. Walmart Stores Inc, Of Counsel M. Frances McCracken successfully appealed ALJ Mottram’s Order wherein the ALJ ordered authorization for a left shoulder reverse total arthroplasty as maintenance medical care. The ALJ found the surgery reasonable and necessary to “cure and relieve” the effects of the work injury. On appeal, Ms. McCracken argued the ALJ committed reversible error because arthroplasty was not a benefit for which Respondents were liable, given that Claimant was at MMI and pursuing treatment under an admission for post-MMI medical benefits. ICAO reiterated that if the goal of treatment is curative, an ALJ must deny the request for post-MMI medical benefits. ICAO remanded the case to ALJ Mottram to determine whether the requested surgery is compensable post-MMI treatment or whether it is curative and must be denied.


Matt Boatwright Attorney at Lee & BrownAssociate Matt Boatwright successfully challenged Claimant’s appeal in Leal v. United Parcel Service and Liberty Mutual Insurance. Compensability of the claim was denied by the hearing ALJ on the basis that Claimant failed to show a direct causal link between his job duties and injury, referencing the “special hazard of employment doctrine” as part of her legal analysis. On appeal, Claimant argued that the ALJ misapplied the special hazard of employment doctrine in denying the claim, arguing that Claimant only needed to show that “but for” the circumstances of employment, Claimant would not have suffered an injury. ICAO found that the ALJ’s holding was based in part on Respondents’ expert testimony, and further the ALJ found that there was no causal relationship between the injury and employment, regardless of the application of the special hazard rule. ICAO found that the findings were supported by substantial evidence and that the ALJ’s Order should therefore be affirmed.

 Jessica Melson Attorney at Lee & BrownAssociate Jessica Melson successfully defeated Claimant’s attempt to add her cervical spine and left shoulder to the claim in Schlecht v. Patterson UTI Drilling Energy, Inc. and Liberty Mutual. Claimant fell at work and sustained an admitted injury to her right shoulder. Claimant later attempted to include her left shoulder and cervical spine. Medical treatment for the additional body parts was denied and the claim proceeded to hearing. Claimant argued that she injured her left shoulder either in the work-related fall or from “overuse or overcompensation” due to the right shoulder injury. Claimant further alleged that she injured her cervical spine in the fall. ALJ Jones did not find the Claimant credible as she reported multiple different mechanisms of injury and failed to disclose an intervening motor vehicle accident to her medical providers. Ms. Melson discredited Claimant’s IME expert by showing he initially opined he was unsure how Claimant injured her left shoulder as the described fall would not have caused the injury. But the doctor later opined Claimant’s left shoulder injury was directly related to the fall. ALJ Jones denied Claimant’s request for medical treatment for the left shoulder and cervical spine.


John Abraham Legal Analysis



John Abraham Attorney at Lee & BrownDivision Proposed Changes to W.C.R.P. Rule 17 Exhibit 5 – Cumulative Trauma Disorders
W.C.R.P. Rule 17 contains the Medical Treatment Guidelines promulgated by the Division of Workers’ Compensation. Several corresponding exhibits discuss the applicable medical criteria regarding injuries to different body parts and recommended treatment. Exhibit 5 addresses cumulative trauma disorders and the causation matrices involved in guiding physicians to assess whether an occupational disease may be work related. The Division has proposed updates to the matrices to specifically address certain scenarios facing injured workers and the applicable statutes under the Workers’ Compensation Act. Also, there have been additional journals, studies, and treatises better addressing the anatomy behind some of the cumulative trauma disorders and causation. The following will help outline some of the updates to the Guidelines proposed by the Division. Click here to continue reading this article.


Cases You Should Know

The Guidelines are….well, just guidelines: In Robles v. Denver Processing, LLC, W.C. No. 4-997-535 (December 22, 2016), the Claimant sought review of an ALJ’s Order denying and dismissing his claim involving an alleged repetitive use injury. Claimant’s medical expert opined that Respondents’ expert did not follow the Workers’ Compensation Medical Treatment Guidelines in deciding whether the Claimant suffered a cumulative trauma injury. ICAO explained that the compensable nature of an injury is not controlled by the Guidelines. Rather, compensability of an alleged occupational injury remains controlled by the Workers’ Compensation Act and relevant case law. Moral of the Story: The Court may consider the Guidelines when evaluating diagnosis and causation; however, the Guidelines are not controlling as to the issue of compensability.

In order to appeal, first you must pay: In Rivas v. Cemex, Inc., W.C. No. 4-975-918 (December 22, 2016), Respondents filed a Petition to Review an ALJ’s Order granting Claimant’s request for a change of authorized treating physician. ICAO cited a recent case which held that an order for change of physician would be subject to review when recent amendments to the Act obligated Respondents to make additional payments implicated by the change of physician, such as fees for copying medical records or payment for at least an initial appointment. In the present matter, no costs were involved or made necessary by the ALJ’s Order. Accordingly, ICAO held that the ALJ’s Order did not grant any benefits and therefore was not subject to review under section 8-43-301(2), C.R.S.
Moral of the Story: Before seeking review of an order granting a change of physician, parties should analyze whether the change of physician resulted in respondents making medical benefits payments.

No enterprise is more likely to succeed than one concealed from the enemy until it is ripe for execution: In Heinz v. State Farm Mutual Automobile Insurance Company, W.C. No. 4-991-171 (December 9, 2016), Claimant filed for hearing on multiple penalty claims, primarily alleging that Respondents failed to timely take a position on the claim and had no good faith basis to pursue a DIME. Respondents had the former issues stricken by a PALJ at prehearing on the basis of ripeness and thereafter sought attorney fees from Claimant upon her continued pursuit of the stricken issues at hearing. ICAO confirmed the ALJ’s decision finding penalties inappropriate, and that there was no requirement that a party pursue a DIME in “good faith.” However, ICAO reversed the ALJ’s decision awarding attorney fees, finding that the issues were ripe at the time that Claimant filed her Application for Hearing, notwithstanding the PALJ’s Order, because there was no legal impediment to the ALJ’s ability to adjudicate these issues at the time that Claimant filed for a hearing.
Moral of the Story: Despite a PALJ striking a penalty claim for lack of ripeness, an ALJ is not precluded from ruling on the issue of penalties. Further, attorney fees are not appropriate if the issue is ripe at the time the party seeking penalties files an application for hearing.

Absence of evidence is not evidence of absence: In Sanchez v. Highlands Glass and Shower, Inc., W.C. No. 5-006-630 (December 6, 2016), Respondents appealed an Order finding that Claimant suffered a compensable injury, and Respondents were a statutory employer liable for medical and disability benefits. ICAO upheld the ALJ’s Order of compensability, holding the evidence satisfied the “totality of the circumstances test” concerning whether a claimant is an employee. ICAO further upheld the ALJ’s award of temporary disability benefits, despite Claimant’s release to work less than three days after the injury (Claimant was subsequently given restrictions), based upon the ALJ’s finding that Claimant credibly testified that he could not work due to the injury. ICAO noted that it is not necessary for the ALJ to predicate such a finding on medical evidence. See Lymburn v. Symbios Logic, 952 P.2d 831 (Colo. App. 1997).
Moral of the Story: It is well established in case law that a claimant does not have to present medical evidence of a disability to allow an ALJ to find that the claimant was disabled due to a work injury as testimony, alone, may be sufficient in the absence of evidence to the contrary.

The high and mighty DIME: In Spath v. Hobby Lobby Stores, Inc., W.C. No. 4-866-427-01 (January 5, 2017), ICAO upheld the Order of the ALJ which found that Claimant failed to overcome the DIME as to MMI and permanent impairment rating determinations. It was found that the DIME’s recommendation for additional medical treatment, while concurrently finding Claimant had reached MMI, did not conflict as the DIME noted the recommended medical treatment was likely to be “temporarily helpful.” The Claimant further argued that the DIME erred because there was no mention of Claimant’s lumbar spine in the DIME report, and Claimant was seeking an impairment rating for the lumbar spine. However, ICAO determined that this was not an error as it is presumed that a DIME physician evaluated all components of a claimant’s condition, as required by C.R.S. § 8-42-107(8)(b). Thus, ICAO found, it can be inferred that the DIME intended to not assign an impairment rating for Claimant’s lumbar spine.
Moral of the Story: Opinions of a DIME are afforded great weight, and overcoming the DIME by clear and convincing evidence is a high burden to meet.

Division Proposed Changes to W.C.R.P. Rule 17 Exhibit 5 – Cumulative Trauma Disorders

W.C.R.P. Rule 17 contains the Medical Treatment Guidelines promulgated by the Division of Workers’ Compensation. Several corresponding exhibits discuss the applicable medical criteria regarding injuries to different body parts and recommended treatment. Exhibit 5 addresses cumulative trauma disorders and the causation matrices involved in guiding physicians to assess whether an occupational disease may be work related. The Division has proposed updates to the matrices to specifically address certain scenarios facing injured workers and the applicable statutes under the Workers’ Compensation Act. Also, there have been additional journals, studies, and treatises better addressing the anatomy behind some of the cumulative trauma disorders and causation. The following will help outline some of the updates to the Guidelines proposed by the Division.


The current version of the cumulative trauma Medical Treatment Guidelines were revised on September 16, 2010 and became effective on October 30, 2010. These Guidelines helped provide a framework to better address causation and clarified primary and secondary risk factors associated with some of the disorders. Physicians could now have a somewhat clear roadmap to address primary and secondary work factors in the workplace and narrow down whether an injured workers’ alleged condition was causally related to their job duties. Among the issues that were clarified were tasks such as keyboarding, mousing, the use of hand tools, and the repetitive task cycles and durations of each of activities in which an injured worker may be exposed to in the workplace.


When assessing causation, the Division’s Guidelines indicate the following:

Cumulative trauma related conditions (CTC) of the upper extremity comprise a heterogeneous group of diagnoses which include numerous specific clinical entities including disorders of the muscles, tendons and tendon sheaths, nerves, joints and neurovascular structures. The terms “cumulative trauma disorder”, “repetitive motion syndrome”, “repetitive strain injury”, “myofascial pain” and other similar nomenclatures are umbrella terms that are not acceptable, specific diagnoses. The health care provider must provide specific diagnoses in order to appropriately educate, evaluate, and treat the patient. Examples include: de Quervain’s disease, cubital tunnel syndrome, and lateral/medial epicondylitis (epicondylalgia).

Many patients present with more than one diagnosis, which requires a thorough upper extremity and cervical evaluation by the health care provider. Furthermore, there must be a causal relationship between work activities and the diagnosis (See, Section D.3 Initial Diagnostic Procedures, Medical Causation Assessment). The mere presence of a diagnosis that may be associated with cumulative trauma does not presume work-relatedness unless the appropriate work exposure is present. Mechanisms of injury for the development of cumulative trauma related conditions have been controversial. However, repetitive awkward posture, force, vibration, cold exposure, and combinations thereof are generally accepted as occupational risk factors for the development of cumulative trauma related conditions. Evaluation of cumulative trauma related conditions require an integrated approach that may include ergonomics assessment, clinical assessment, past medical history and psychosocial evaluation on a case-by-case basis.

The normal working age population may often have non-specific pain complaints that require minimum treatment and may be considered part of the normal aging process. When pain continues or a complete history indicates a potential for other diagnoses, a medical workup may be necessary to screen for other diseases. However, in cases where there is no specific diagnosis and corresponding work related etiology, the work-up should generally be performed outside of the workers’ compensation system.

When applying the algorithm in Exhibit 5, the first step requires the physician to establish the diagnosis for the patient. Once completed, the second step requires the assessing physician to obtain the injured workers’ job duties and clearly define the specific tasks involved. The physician may require a jobsite evaluation to determine each task. The third step focusses on each specific job duty and whether it classifies as a primary or secondary risk factor. Primary and secondary risk factors both involve measuring force and repetition over different periods of time.


Currently, if neither a primary or secondary risk factor are present in the job duties of the injured worker, the condition is presumed to not be work related. If there are one or more identifiable primary risk factors, and the risk factor is physiologically related to the diagnosis, then the condition may be work related. If the primary risk factor is not physiologically related with no secondary risk factors, then again the condition is likely not work related. Once a physician arrives at identifying secondary risk factors, the fourth step in the algorithm goes a bit further and requires the physician to identify diagnostic-based risk factor tables to narrow down causation. There are several non-work related factors in assessing causation, such as the patients’ age, gender, whether the patient uses tobacco products, etc., that help in determining a non-work related cause.


Most of the algorithm and causation criteria remain unchanged in the Division’s latest proposals. Only certain portions have been revised to take into consideration particular nuances in the primary and secondary risk factors. One of the proposed changes to the Guidelines indicates that in the case of an aggravation or exacerbation of a pre-existing condition, the physician will now need to make an individualized causation decision based on the presence of other accompanying conditions. The physician must take each patient on a case by case basis.


Another proposed change is the increased amount of force but reduced task cycles and durations as primary risk factors. Force and repetition, coupled with duration, now require six hours of the use of two pounds of pinch force or ten pounds hand force 3 times or more per minute. The secondary risk factors have been reduced from 4 hours to 3 with the same two pounds of pinch force or ten pounds of hand force 3 times or more per minute. The physicians will have to apply the same steps in the algorithm to reach their conclusions; however, the specific criteria for primary and secondary risk factors have been updated based on the latest studies and literature. These are not the only changes to the Guidelines. Certain other updates have been made depending on the specific primary or secondary risk factor being addressed, (i.e. awkward posture, computer work, the use of handheld vibratory power tools, and cold working environments).


When a claimant alleges a particular occupational disease in which Exhibit 5 of the Medical Treatment Guidelines will be applied to determine causation, it is best to seek an Independent Medical Examination with a physician knowledgeable in applying the causation matrix. As part of the investigation of the claim, the IME physician should also be provided with a specific job description or worksite evaluation to properly identify each of the job duties that the injured worker performs. Most treating physicians will only obtain direct knowledge of the injured workers’ job duties directly from the injured worker. This oftentimes provides a skewed perception of the specific job duties, which in turn skews the overall analysis by the physician. The treating physician may find a claim to be work related when it should not be if the algorithm was properly applied.


If the IME physician has the specific job description/ergonomics assessment, coupled with medical records to establish the proper diagnosis, the physician will be in a better position to properly apply the causation matrices and provide a solid framework for reaching a causation determination. The IME physicians’ report can then be sent to the treating physician to properly assess causation and provide treatment to the injured worker or, in some cases, prevent treatment from being provided to the injured worker when it is not work-related, thus saving on medical costs.


The proposed changes to Rule 17 are not yet in effect. These are proposed changes but no rule making hearing has been announced. We suggest checking the Division website periodically. Once the changes do go into effect, we will make an announcement and let you know what changes were approved.


For additional questions regarding updates to the Medical Treatment Guidelines or recommendations when confronted with a particular issue on causation, please contact the attorneys at Lee + Kinder LLC.

Legal Connection Firm Newsletter – December 2016

Thank you for taking the time to read our Firm newsletter. Our newsletter provides a monthly update on recent developments within our Firm, as well as in the insurance defense community.

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In the News

Members Joshua Brown, Joseph Gren and Of Counsel John Abraham attended the National Workers’ Compensation and Disability Conference in New Orleans November 29 through December 2. The conference is held annually by various clients, vendors, and sponsors in an effort to stay abreast of industry trends and managing client needs. Mr. Brown, Mr. Gren and Mr. Abraham represented Lee + Kinder LLC and participated in the expo held at the convention center. They had the opportunity to network with both vendors and clients in addition to discussing upcoming needs for 2017 and changes to Colorado law.


Lee + Kinder LLC would like to wish everyone a very Happy New Year!


Victory Lap

Joe gren Attorney Lee & BrownMember Joseph W. Gren successfully won dismissal of a claim for penalties in Arnhold v. United Parcel Service and Liberty Mutual Insurance. Claimant was seeking penalties against Respondents for a late payment of TTD award pursuant to a prior Order. Mr. Gren, through testimony of the insurance adjuster, was able to argue that the adjuster acted objectionably reasonable in the actions taken pursuant to the Order. The ALJ found that the adjuster was credible and that the adjuster acted objectionably reasonable in her adjusting of the claim. The ALJ further found that the Claimant failed to meet her burden of proof, under the cure provision, that a penalty should be imposed in this matter. The claim for penalties was denied and dismissed.


Fran McCracken Attorney Lee & BrownOf Counsel Frances McCracken successfully defeated the Pro Se Claimant’s requests for temporary disability benefits, permanent partial disability benefits, and medical benefits in Jaterka v. Johnson & Johnson and Indemnity Insurance Company of North America. Respondents previously filed a FAL that admitted for a 0% impairment rating for the work-related left cubital tunnel syndrome and lateral epicondylitis. At hearing, Claimant sought to reopen the claim on the basis that the left shoulder surgery that she underwent through her personal insurance was related to the work injury. Ms. McCracken successfully argued that Claimant was jurisdictionally barred from challenging MMI and the determination that the left shoulder complaints were not related to the work injury because Claimant did not timely file an objection to the FAL or pursue the DIME. ALJ Edie agreed that the relatedness of the shoulder injury was conclusively determined by the ATP at the time of MMI and could not be challenged in a reopening proceeding. ALJ Edie dismissed Claimant’s request to reopen the claim and denied the requests for medical and indemnity benefits related to the left shoulder injury.


Joseph Gren Attorney Lee & Brown





Division Rule 16: Increasing the Complexity of Utilization Preauthorization Disputes

On January 1, 2017, the Colorado Division of Workers’ Compensation’s revised Rule 16 will take effect. Rule 16 encompasses the medical, legal, and administrative standards for medical billing and for preauthorization of services requested by medical providers. The revised rule impacts the daily adjusting of workers’ compensation claims, specifically, responding to requests for preauthorization of medical services consistent with the Colorado Medical Treatment Guidelines (“MTG”). The critical alterations pertaining to the utilization review process impute additional legal obligations upon the insurance carrier or third party administrator (“TPA”) to take action after receiving a preauthorization request.
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Cases You Should Know

Don’t make promises you can’t keep. ICAO reaffirmed established Colorado law that ALJs have broad discretion when determining a claimant’s Average Weekly Wage (AWW) in Cruz v. Sacramento Drilling Inc. and Travelers Property Casualty Company of America. W.C. No. 4-999-129 (ICAO October 24, 2016). In this claim, Claimant sustained an injury two weeks after beginning a new job. At hearing, Claimant argued that the AWW should be based on a 60-hour workweek because that was the number of hours originally offered by the employer and he worked 59 hours the week prior to his injury. The employer argued that following the injury, Claimant never worked 60-hour weeks and neither did similarly-situated employees. The employer argued that employees are not guaranteed hours and the AWW should not be based on the original offer. Nonetheless, the ALJ used the 60-hour workweek because the offer of employment was for 60 hours per week and the brief work history was consistent with the offer. ICAO upheld the ALJ’s Order and stressed that the ALJ properly utilized his discretion to determine the AWW. Moral of the Story: Employers should not promise a specific amount of hours to be worked in a job offer unless there is absolute certainty with the guaranteed number of hours.


Oooohhh Burn! ICAO recently determined that the higher statutory cap for disfigurement benefits is applicable for any type of burn scar and not just for facial burns and extensive scarring. Lambert v. Sturgeon Electric Co. and Zurich American, W.C. No. 4-987-545 (ICAO October 28, 2016). The ALJ awarded Claimant $6,000 in Disfigurement benefits for two burn scars on his arms that were 3.5 inches by 2 inches. Respondents appealed and argued that the disfigurement award should have been capped at $4,673.47 because the higher cap is only available for “extensive” scarring. ICAO reviewed the statute, which indicates that the higher cap applies to “extensive body scars or burn scars” and determined that the cap applies to both extensive body scars and any burn scars and upheld the award. Moral of the Story: If an employee is burned, the respondents will pay.


The phantom injury: ICAO recently found that in the case of an unexplained fall, Claimant still has the burden of proving that there was an actual injury. Magali-Tamayo v. Trioak Foods West and Travelers Insurance Company of Connecticut, W.C. No. 4-965-037 (ICAO October 28, 2016). Claimant was found lying on the floor at work with no recollection of how she got there. Claimant argued that her ongoing dizziness and cognitive issues were related to a head injury sustained during the fall. She argued that under the City of Brighton analysis, the event would be considered a neutral risk as an “unexplained fall” that would not have occurred but for the fact that she was at work. The ALJ concluded that Claimant failed to prove that she sustained any type of head injury that day that would be related to her symptoms. ICAO upheld the Order and found that if a claimant fails to prove that there is a nexus between the conditions of the employment and an actual injury, the claim will not be compensable regardless of the City of Brighton categories of risk analysis. Moral of the Story: If there is an unexplained fall, the claimant still has the burden to prove that there was an actual injury.


Buckle up. ICAO affirmed the ALJ’s determination holding Respondents did not meet their burden of proof in proving that failure to use a safety device should result in a 50% reduction in Claimant’s benefits. Shaikh v. Colorado Springs Transportation and Old Republic Ins. Co., W.C. No. 4-968-013 (ICAO April 15, 2016). Claimant was a taxi cab driver who was not wearing her safety belt when she was involved in a motor vehicle accident. Hearing was held over Respondents’ reduction of Claimant’s benefits by 50% due to her failure to use a safety device (the safety belt) provided by the employer. The ALJ determined that Respondents offered no persuasive evidence that Claimant would not have sustained the same injuries had she kept her safety belt on; thus, Respondents were not entitled to reduce Claimant’s compensation by 50%. ICAO upheld the ALJ’s determination and stressed that the mere occurrence of an injury and a claimed cause does not require the ALJ to draw the inference of causation. Moral of the Story: If an injured worker fails to use a safety device, Respondents must further prove that failure to use the safety device resulted in a worker’s injuries.


You choose, you lose. ICAO affirmed the ALJ’s decision that Claimant exercised his right to select a treating physician through his words and conduct. Williams v. Halliburton Energy Services and ACE American Ins. Co., W.C. No. 4-995-888 (ICAO April 18, 2016). Claimant was directed to Injury Care of Colorado for treatment of his work injury. Over thirty days after the injury, the employer provided Claimant with a designated provider list. Claimant hand wrote that he chose Injury Care of Colorado and he continued to receive conservative treatment. Once Claimant hired an attorney, he wished to change to his ATP, Dr. Miller. Respondents contested the change. The ALJ determined that Claimant signified through his words and conduct that he exercised his right of selection and chose Injury Care of Colorado as his ATP. ICAO upheld the ALJ’s Order and found there was substantial evidence to show that Claimant demonstrated by his actual conduct in undergoing treatment at Injury Care of Colorado that he had made his selection. Moral of the Story: A claimant’s conduct may demonstrate his choice in ATP after the right of medical selection passes to him.


DIMEs have a lot of weight, but the skinny is: DIMEs may not make up surgeries. In Serena v. ICAO, W.C. No. 4-922-344 (nsfp), Claimant sustained an industrial injury to both shoulders, and underwent bilateral shoulder surgery. The DIME physician provided Claimant with a 10% impairment rating for each shoulder for subacromial arthroplasty (joint replacement) surgery. Respondents sought to overcome the DIME. Respondents argued the DIME physician clearly erred in providing the 10% impairment rating for arthroplasty because the Claimant did not undergo this procedure. The ALJ determined Respondents failed to prove the DIME erred. The ALJ acknowledged Claimant did not undergo an arthoroplasty procedure. Nevertheless, the ALJ determined the DIME physician had discretion to provide additional impairment for “derangement” in accordance with the Division Impairment Rating Tips. Respondents appealed. The Court of Appeals acknowledged the DIME physician has discretion under the Impairment Rating Tips to provide impairment for derangement when an injured worker undergoes surgery. The Court of Appeals noted, however, that it was clear the DIME physician provided the 10% impairment under the mistaken belief the Claimant underwent arthroplasty. The Court of Appeals found the DIME physician erred. Moral of the Story: We recommend carefully reviewing DIME reports to ensure the physician is rating the correct body parts and properly following rating procedures.

Division Rule 16: Increasing the Complexity of Utilization Preauthorization Disputes

On January 1, 2017, the Colorado Division of Workers’ Compensation’s revised Rule 16 will CDLE-Logotake effect. Rule 16 encompasses the medical, legal, and administrative standards for medical billing and for preauthorization of services requested by medical providers. The revised rule impacts the daily adjusting of workers’ compensation claims, specifically, responding to requests for preauthorization of medical services consistent with the Colorado Medical Treatment Guidelines (“MTG”). The critical alterations pertaining to the utilization review process impute additional legal obligations upon the insurance carrier or third party administrator (“TPA”) to take action after receiving a preauthorization request.


The most significant addition to Rule 16 was the incorporation of the “Notification” provision found in Rule 16-9. The Notification process was the Division’s response to concerns about expediting medical services to injured workers while guaranteeing that the medical providers would receive payment without a prior promise of payment from the insurance carrier or TPA. Rule 16-9(A) states “[t]he Notification process is for treatment consistent with the Medical Treatment Guidelines that has an established value under the Medical Fee Schedule. Providers may, but are not required to, utilize the Notification process to ensure payment for medical treatment that falls within the purview of the Medical Treatment Guidelines. Therefore, lack of response from the payer within the time requirement set forth in section 16-9 (D) shall deem the proposed treatment/service authorized for payment.”


The language contained in Rule 16-9(B) emphasizes that a medical provider “may” obtain permission to provide a service within the Medical Treatment Guidelines verbally within normal business hours.  The providers can obtain verbal confirmation and may make a request for written confirmation regarding payment of those services. If the provider wishes, the provider can submit a written Notification to the claim examiner. The provider must use the boilerplate Division form WC195, which is available online at the Division’s website. The provider must include on the form a statement as to why the service is medically necessary and cite the applicable MTG.


After the carrier or TPA receives the Notification, the respective recipient has 5 business days from the receipt of the Notification to respond to the provider. The timing for the response to the provider differs from the current structure of Rule 16 whereby the carrier is permitted 7 business days from the date of the request to respond to the request for authorization. If the carrier or TPA does not respond to a verbal or written request in 5 business days, the requested service is deemed automatically authorized for payment.


The carrier or TPA may either accept or deny the request for services. Similar to the current Rule 16 structure, the carrier or TPA always reserves the right to agree to pay for the requested services without a formal review of the requested services. The carrier or TPA can alternatively contest the services on the following grounds: “(1) for claims which have been reported to the Division, no admission of liability or final order finding the injury compensable has been issued; (2) proposed treatment is not related to the admitted injury; (3) provider submitting Notification is not an Authorized Treating Provider (ATP), or is proposing for treatment to be performed by a provider who is not eligible to be an ATP; (4) injured worker is not entitled to proposed treatment pursuant to statute or settlement;  (5) medical records contain conflicting opinions among the ATPs regarding proposed treatment; and (6) proposed treatment falls outside the Medical Treatment Guidelines (see section 16-9(E).”


If the carrier or TPA contests the Notification on the grounds that the treatment is not related to the industrial injury, the medical records contain conflicting opinions, or that the treatment falls outside of the MTG, the carrier or TPA must notify the provider. The carrier or TPA must then allow the provider to submit supporting documentation to justify the relatedness of the service. If the provider submits the requested supporting documentation, then the carrier or TPA must review the request consistent with the Rule 16-10 and 16-11 preauthorization rules within 7 business days. A party contesting the denial of a Notification request may file an Application for Hearing.


The Division inserted a penalties provision in Rule 16-9(G). Under this new rule, if any medical provider or payer, the carrier or TPA, misapply the Medical Treatment Guidelines in the Notification process, the respective party may be subject to penalties. This provision continues the Colorado state government’s history of advocating punitive sanctions for violations of administrative rules.


In addition to the Notification provision, the Division altered the rules pertinent to traditional utilization review contests for medical services outside of the MTG.  The utilization standards contained in Rule 16-10 largely remained unchanged by the new rule. The modification to Rule 16-11, however, focused upon remodeling the carrier’s and TPA’s right to contest the request for authorization.  Prior to January 1, 2017, in order to contest the request for preauthorization for services, the carrier or TPA had 7 business days to obtain a medical review or file an Application for Hearing to challenge the request. After January 1, 2017, the carrier or TPA must follow a different procedure to contest preauthorization, presuming that medical providers perfect their request for authorization.


Under the new Rule 16-11(E): “[f]ailure of the payer to timely comply in full with the requirements of section 16-11(A) or (B), shall be deemed authorization for payment of the requested treatment unless: (1) a hearing is requested within the time prescribed for responding as set forth in section 16-11(A) or (B) and the requesting provider is notified accordingly. A request for hearing shall not relieve the payer from conducting a medical review of the requested treatment, as set forth in section 16-11(B); or (2) the payer has scheduled an independent medical examination (IME) within the time prescribed for responding as set forth in section 16-11(B).” In short, filing an Application for Hearing by itself is no longer sufficient to contest the preauthorization request. If the carrier or TPA requests a hearing, the carrier or TPA must complete the medical review process within seven business days or actually schedule the injured worker for an Independent Medical Evaluation (“IME”) within seven business days.


The new Notification process for medical services, consistent with the MTG and the limitations on contesting a requests for preauthorization for services outside of the guidelines, raises numerous questions on how the rules will practically operate. For instance, does a verbal Notification for a service within the MTG left on a claims examiner’s voicemail meet the criteria for Rule 16-9(B)? Does an injured worker have legal standing to request penalties under Rule 16-9 if a medical provider misapplies the MTG in a request thereby causing a delay in medical treatment? If a carrier or TPA files an Application for Hearing and schedules an IME, and the IME is later cancelled for various reasons, is the requested service automatically authorized? Given the historical litigation surrounding Rule 16 utilization reviews, carriers and TPAs should begin implementing safeguards and training to ensure strict compliance with the complex additions to the modified rule.

Legal Connection Firm Newsletter – November 2016

Thank you for taking the time to read our Firm newsletter. Our newsletter provides a monthly update on recent developments within our Firm, as well as in the insurance defense community.
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In the News

We are please to announce the Firm has been named a Denver Tier 1 firm in the field of Workers’ Compensation Law – Employers by U.S. News – Best Lawyers® “Best Law Firms” again for 2017.



Victory Lap


Joseph Gren Attorney Lee & BrownMember Joseph Gren successfully won a dismissal of a full contest claim in Livingston v. United Parcel Service and Liberty Mutual Insurance. The claim involved an employee who alleged he suffered a right knee injury after an unloading roller fell on his knee at work. ALJ Patrick Spencer found that the Claimant could not establish that he sustained an injury or aggravation to his right knee. Furthermore, Mr. Gren utilized expert medical witness testimony, and employer witness testimony, to present evidence that Claimant’s torn ACL was preexisting and that the event at work did not cause or aggravate the knee injury. Mr. Gren was also able to elicit testimony from the surgeon, who recommended an ACL repair, that the injury was likely preexisting. ALJ Spencer credited the testimony of both physicians and the employer witnesses and determined that there was no persuasive evidence that Claimant required any medical treatment proximately caused by the work place incident. ALJ Spencer denied and dismissed the claim.


Fran McCracken Attorney Lee & BrownOf Counsel M. Frances McCracken prevailed on all issues endorsed for two claims consolidated for hearing before ALJ Turnbow in Hernandez v. Walmart Stores, Inc. In the first claim, Respondent sought to challenge the DIME’s impairment rating and the recommendation for maintenance medical benefits while Claimant sought to prove conversion. In the second claim, Respondent sought to prove Claimant was responsible for his termination, and Claimant sought to prove entitlement to TTD benefits. The ALJ found that Claimant failed to prove a permanent impairment beyond the shoulder joint, found that the DIME physician incorrectly included a non-work-related condition in the impairment rating, and found that no maintenance medical benefits were necessary. For the second claim, the ALJ found that Claimant was, in fact, responsible for termination, thus severing the causal connection between the injury and the wage loss.

Of Counsel M. Frances McCracken also successfully prevailed before ALJ Felter in Clark v. Walmart Stores, Inc. on the issue of the reasonableness of a Tramadol prescription as a maintenance medical benefit. After listening to the testimony of the parties’ witnesses, ALJ Felter found that indefinite prescriptions for Tramadol were not a reasonably necessary maintenance medical benefit. He ordered that Claimant’s treating physician enter into a Pain Contract, signed by Claimant, setting forth a reasonable schedule for weaning Claimant off of the Tramadol.


John Abraham Attorney Lee & BrownIn Mitchell v. Walmart Stores Inc, Of Counsel John Abraham successfully challenged Claimant’s request for a general medical maintenance care award and a new Final Admission of Liability. The authorized treating physician found no maintenance care was reasonable, necessary and/or related, while the Division IME physician recommended a six-month gym membership as maintenance care. Respondent denied maintenance care pursuant to the ATP’s opinions on the FAL. Claimant argued that the gym membership was a maintenance medical benefit necessitating an admission for a general maintenance award. Respondent agreed to authorize a six-month gym membership though they maintained, contrary to Claimant’s request, that no additional maintenance care was reasonable, necessary and/or related. Mr. Abraham presented credible medical evidence demonstrating that the substantial evidence did not support a general medical maintenance award and further that there was no authority to support a general award of maintenance care simply because a gym membership had been agreed to by the parties.


Matthew Boatwright Attorney Lee & BrownAssociate Matt Boatwright was successful in two recently litigated claims. In Schilling v. United Parcel Service and Liberty Mutual Insurance, Claimant sought conversion of a scheduled injury to his upper extremity to a whole person impairment rating for ongoing complaints of pain in the neck, upper back, and residual symptoms from a surgery. The ALJ found that Respondents’ medical expert testified credibly and persuasively that no symptoms at that time would have reasonably been considered related to the original injury. The ALJ found the injury appropriate under the schedule of ratings and denied the whole person conversion.

Mr. Boatwright also successfully defended a full contest claim for benefits arising from a foot injury alleged to the be result of an occupational disease. DeHerrera v. United Parcel Service and Liberty Mutual Insurance. Claimant claimed that he had sesamoiditis, a condition involving inflammation of the foot, as the result of his job duties over time. The condition ultimately required surgery. The ALJ found that Respondents’ medical expert testified credibly that the particular condition for which Claimant sought compensation would not have been caused by repetitive activities, but would more likely than not be the result of an acute injury. Based upon this medical opinion, the ALJ denied and dismissed the claim.


Joshua Brown Lee & Brown Attorney
Joshua Brown Lee & Brown AttorneyNEW OVERTIME RULES
The Department of Labor’s (“DOL”) new overtime rules take effect December 1, 2016, and employers should be reviewing and modifying their compensation and payroll practices in response. Here is a link to the new regulations adopted by the Department of Labor:

As part of this preparation, employers must consider whether and how any changes to their compensation structures will affect their employee benefit plans.

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Cases You Should Know

Tomayto, tomahto: In Dalton and Archer-Reid v. Pace Joint Interests-Denver, LLC and Chiropractic Healthcare Solutions, LLC, W.C. Nos. 4-977-664 & 4-977-800 (September 22, 2016), while addressing a unique factual scenario involving two alleged employers, ICAO clarified the concepts of joint employment, dual employment, and loaned employment. ICAO noted neither Colorado appellate courts nor ICAO previously have adopted or applied Larson’s distinct classifications of “joint employment” or “dual employment.” Rather, these courts have used the terms interchangeably. Larson’s Workers’ Compensation distinguishes joint employment from dual employment:

Joint employment occurs when a single employee, under contract with two employers, and under simultaneous control of both, simultaneously performs services for both employers, and when the service for each employer is the same as, or is closely related to, that for the other. In such a case, both employers are liable for workmen’s compensation.

Dual employment occurs when a single employee, under contract with two employers, and under the separate control of each, performs services for the most part for each employer separately, and when the service for each employer is largely unrelated to that for the other. In such a case, the employers may be liable for workmen’s compensation separately or jointly, depending on the severability of the employee’s activity at the time of injury.

ICAO also noted that, under the Colorado Workers’ Compensation Act, a loaned employee and an employee are not the same. C.R.S. §8-41-303 provides: “Where an employer . . . loans the service of any of the employer’s employees . . . to any third person, the employer shall be liable for any compensation thereafter for any injuries or death of said employee . . . unless it appears from the evidence that said loaning constitutes a new contract of hire, express or implied, between the employee whose services were loaned and the person to whom the employee was loaned.” Moral of the Story: Do not use the terms joint employment, dual employment, and loaned employment loosely—these terms embody distinct concepts.


An indirect green light on appeals from the General Assembly: In Huston v. Allcable, Inc., W.C. No. 4-997-535 (October 5, 2016), the ALJ ordered a change of authorized treating physician pursuant to § 8-43-404(5)(a)(VI), C.R.S. and Respondents appealed. ICAO considered whether §8-32-301(2) bars review of an order requiring a change of physician since such an order arguably does not require payment of a benefit. In prior cases, ICAO found orders granting a change of physician not reviewable because authorization itself is not a benefit. ICAO departed from its prior position, citing recent statutory changes which compel Respondents to pay for a minimum of one appointment with the new ATP after a change of physician pursuant to §8-43-404(5)(a)(VI). Since the change of physician statute now requires payment by Respondents, an order granting a change of physician is appealable. Moral of the Story: As a result of recent statutory changes, C.R.S. §8-43-301(2) no longer bars appeal of an order granting a change of physician.


Short and sweet: adjudication on the pleadings: In Adams v. Heart of the Rockies, W.C. No. 4-947-7301, a dispute arose as to the Respondents’ entitlement to recover an overpayment. The parties agreed to forego a hearing and request an Order on the pleadings. The ALJ issued a Summary Order in favor of the Respondents, which did not address the Claimant’s arguments. The Claimant appealed, and the ICAO concluded, based on the Summary Order, that the ALJ implicitly found the Claimant’s factual allegations unpersuasive. The ICAO noted, though not in dispute, that a request for a full findings of fact under §8-43-215, C.R.S. is not available where a summary order is issued on the pleadings without a hearing. Moral of the story: Where issues are adjudicated on the pleadings, you may not request full findings of fact.


If you’re fired, allege a worsening of condition: In Evans v. JC Penny, W.C. No. 4-904-748-04 (September 19, 2016), the ALJ found that the Claimant was responsible for her termination in April of 2014. However, the ALJ also found that the Claimant had a worsening of condition in October of 2014. The ALJ, in his Order, concluded that the Claimant’s entitlement to TTD benefits was severed by the for-cause termination in April 2014, and found that a causal relationship between wage loss and injury was reestablished as of Claimant’s worsening of condition in October of 2014. On appeal, ICAO concluded that the ALJ’s findings were supported by substantial evidence and his conclusions were supported by the seminal case of Anderson v. Longmont Toyota. Moral of the story: Entitlement to temporary disability benefits may be reestablished by a showing of a worsening of condition, despite the fact that the claimant was responsible for prior termination.


A final order is a final order… unless it’s not: In Ketiku v. Integrated Healthcare Staffing, W.C. No. 4-924-142-09, a Pro Se Claimant failed to file a timely Petition to Review. The Claimant filed multiple subsequent applications for hearing, one of which sought reopening based on mistake. Specifically, the Claimant alleged that she was given the “wrong documentation” for her appeal and that she was denied reasonable assistance to mitigate a hearing disability. The ALJ struck the Claimant’s Application For Hearing, noting that the prior Order denying compensability was final, as it had not been appealed. On review, ICAO remanded the case to the ALJ, concluding that the Claimant’s allegations could constitute a basis for mistake of law, warranting a collateral attack on the original Order. Moral of the Story: Even a claim closed on a final order, no longer subject to review, may be reopened where a pro se claimant alleges the prior ALJ made a mistake of law.


Risky Business: In Cross v. Genuine Parts Company, W.C. 4-961-489-02 (September 20, 2016), the Industrial Claim Appeals Office affirmed the decision of the Administrative Law Judge (ALJ) ordering Respondents liable for arm/wrist surgery for Claimant’s compensable injury. Respondents’ appeal argued that Claimant’s need for surgery arose due to an aggravation of her condition while working for a new employer. The panel affirmed the ALJ’s finding and reasoned, citing University Park Care Center v. Industrial Claim Appeals Office, 43 P.3d 637 (Colo. App. 2001), that the concept of assigning liability for medical benefits to an employer “on the risk” for insurance coverage would not apply in a case where the prior injury had an accidental cause and the subsequent injury was an occupational disease, as was the case here. Instead, the ordinary rules of causation and apportionment extend to medical benefits because there was no evidence in the record stating that the original work injury was an occupational disease. The panel affirmed the ALJ’s decision that the proposed surgery was caused by Claimant’s original work injury and not while working for a subsequent employer. Moral of the story: For the “last injurious exposure” doctrine to apply, the initial work injury and subsequent aggravation must be occupational injuries. Liability for medical expenses is on the employer who is on the risk for insurance coverage as of the date the charge for medical services was incurred.


The Department of Labor’s (“DOL”) new overtime rules take effect December 1, 2016,usdol_seal and employers should be reviewing and modifying their compensation and payroll practices in response. Here is a link to the new regulations adopted by the Department of Labor:

As part of this preparation, employers must consider whether and how any changes to their compensation structures will affect their employee benefit plans.

The new overtime rules increase the salary levels at which executive, administrative, and professional workers may be considered “exempt” under the Fair Labor Standard Act (“FLSA”) from overtime pay when a work week exceeds 40 hours. Initially, the standard salary level will increase from $455 to $913 per week and the total annual compensation requirement for highly compensated employee exemption will increase from $100,000 to $134,004 per year.  In addition to these initial compensation level bumps, additional upward adjustments are scheduled to occur every three years thereafter.

The immediate impact on this change is that currently classified “exempt” employees under the lower salary level, will no longer qualify for this status.  As a result, if an employee is no longer exempt under the FLSA, overtime must be paid for work performed beyond the 40-hour work week.

Employers need to respond to these changes in a number of ways.  Some are raising base salaries in order to classify additional employees as “exempt.”  Others are planning to simply pay overtime where necessary.  Others are planning to cap hours at 40 so that no overtime need be paid, or to meet their needs with part-time workers.

Regardless of the planned changes, effects on the employer’s benefit plans must be considered.  The DOL’s new overtime rules will require many employers to make sweeping and expensive changes to their compensation practices.  These changes may impact employee benefit plans in both intended and unintended ways.  Employers are urged to conduct a thorough benefit plan analysis before making any sweeping compensation changes.

If you have questions about the rule, or how it may affect your company, please contact us.



In October 2015, National Public Radio (NPR) and ProPublica did a report over the differences between the states npr_propublicaworkers’ compensation laws.  The report found significant differences in the amount and type of benefits in each states workers’ compensation system.  The report focused heavily on recent attempts by states to allow employers to opt-out of workers’ compensation.  These plans generally allow an employer to set-up a benefit system for injured workers themselves.    In particular, it focused on Oklahoma’s opt-out law – a law that was recently struck down by the Oklahoma Supreme Court as unconstitutional.  The report was very damning of these differences and deficiencies between the states’ systems.

The NPR and ProPublica report led to a letter from 10 prominent national legislators to the Secretary of the Department of Labor.  The letter was itself very critical and condemning of the deficiencies reported by NPR and ProPublica.  As a result, on October 5, 2016 the Department of Labor issued a 43-page report over the state of the patchwork of workers’ compensation laws across the country.


The Department of Labor report outlines the history of the ‘grand bargain’ that is the workers’ compensation system outlining the reasons behind workers’ compensation and how we ended-up with a patchwork system of laws.  In particular, the report focuses on a national commission report from 1972 that identified 5 basic objectives for workers’ compensation programs:

  1. broad coverage of employees and work-related injuries and diseases,
  2. substantial protection against interruption of income,
  3. provision of sufficient medical care and rehabilitation services,
  4. encouragement of safety and
  5. an effective system of delivery of the benefits and services.

This national commission agreed on 19 essential recommendations to accomplish these goals.  The 19 recommendations themselves focused on six specific areas:

  1. compulsory rather than elective coverage with no exemptions for various employers or types of labor,
  2. broadening employee choice for filing claims interstate, either where the injury occurred, or where the employment was originated,
  3. full coverage for work related diseases,
  4. adequate weekly wage replacement benefits and death benefits of no less than 100% of the states average weekly wage,
  5. no arbitrary limits on the duration of benefits and
  6. full medical and rehabilitation benefits without limit or duration.

The report considers the history since 1972, recognizing that employers’ costs and insurance rates grew from 1984 to 1990.  This cost increase created political pressure to change the benefit packages.  The report cites that per $100 of payroll, costs rose to as high as $1.65, but have since dropped to $.98 per $100 of payroll in 2013.  The report goes on and attributes the decreased cost to states passing legislation to reduce the benefit packages to injured workers. In particular, the report cites to various states that have created ‘proof barriers’ to certain types of claims, such as mental impairment claims, and cites to a reduction in benefits for workers with pre-existing injuries or conditions.  The report mentions mechanisms within each state for reduction of indemnity benefit eligibility through application of apportionment, or other fault-based benefit penalties.  There is also reference to disincentives to workers to report a claim, such as drug screening after an accident or injury.  The report is also critical of restricted medical care for injured workers, through either limited medical care provider choices, or reduced reimbursement keeping medical care providers from accepting work injuries.  Finally, the report is critical of the elimination of second injury funds and other ways in which liability for certain injuries or conditions are accepted.

Overall, the Department of Labor report recognizes that some liability for benefits in the workers’ compensation system is being passed on to other programs, including Medicare, Medicaid and Social Security.  This cost shifting to other public aid programs is a primary concern for the Department of Labor.  The report provides a road-map for Federal action in the future in the form of oversight of state workers’ compensation systems, including mandatory minimums of benefits within each system to halt what the report describes as a ‘race to the bottom.’

Of interest, the report tracks each states progress in complying with the 19 core recommendations from the original national commission.  The report shows how each state was doing in 1972, 1980 and 2004.  In 1972 Colorado had complied with 10 of the 19 recommendations and had increased that to 16 of the 19 recommendations by 1980. By 2004, Colorado compliance had dropped, as is the case with most states, to 12.75.  In 2004 no state had met all 19 recommendations.


The report tacitly recognizes that the Obama administration is on its way out.  Regardless, the Department of Labor is clearly interested in the functioning of state workers’ compensation systems and it is doubtful that the upcoming election will change that dynamic.  Further, state interest in an opt-out structure only increases this negative attention.  Several states that have considered opt-out arrangements have dropped these proposals.  Under any circumstance, it is to be expected that there will be continued call for increased Federal oversight over workers’ compensation.