STATE OF WISCONSIN
LABOR AND INDUSTRY REVIEW COMMISSION
P O BOX 8126, MADISON, WI 53708-8126 (608/266-9850)

EDWARD J HELLAND, Applicant

HYPRO INC, Employer

HARTFORD ACCIDENT &
INDEMNITY CO, Insurer

WORKER'S COMPENSATION DECISION
Claim No. 1998-030692


An administrative law judge (ALJ) for the Worker's Compensation Division of the Department of Workforce Development issued a decision in this matter. A timely petition for review was filed.

The commission has considered the petition and the positions of the parties, and it has reviewed the evidence submitted to the ALJ. Based on its review, the commission agrees with the decision of the ALJ, and it adopts the findings and order in that decision as its own.

ORDER

The findings and order of the administrative law judge are affirmed.

Dated and mailed September 18, 2008
hellaed . wsd : 175 : 9 ND 5.24, 7.21

/s/ James T. Flynn, Chairperson

/s/ Robert Glaser, Commissioner

/s/ Ann L. Crump, Commissioner

MEMORANDUM OPINION

The employer's insurer, Hartford Accident & Indemnity Co., contends in its petition for commission review the administrative law judge erred in determining the insurer was liable for bad faith delay in the payment of permanent partial disability benefits to the applicant pursuant to Wis. Stat. § 102.18(1)(bp), and awarded the applicant a 200 percent penalty. The insurer contends that a 200 percent penalty was not warranted. The insurer states in the fall of 2006 the applicant requested that the employer's insurer concede and pay permanent partial disability up to the minimum of 20 percent. The employer's insurer provided no reasonable basis for failing to pay the additional permanent partial disability above the 11 percent permanent partial disability that had been conceded at an earlier date.

The department's worker's compensation insurance letter dated August 21, 2000 clearly states that for injuries on or after July 1, 1994 the department's position is that insurers should pay a minimum of 10 percent permanent partial disability per level for a cervical fusion involving the removal of the disc material. The evidence indicates the applicant had undergone cervical fusion at two levels for the removal of disc material. However, the employer's insurer failed to pay the claim for an additional 9 percent permanent partial disability. The insurer was aware of its responsibility to pay 10 percent permanent partial disability as a minimum for each level of a cervical fusion involving removal of disc material but failed to do so.

The administrative law judge appropriately noted that although there may have been a difference of opinion on the interpretation of Wis. Adm. Code § 80.32(11), the department had resolved any differences with the commission's interpretation and adopted the commission's interpretation in its insurance letter dated August 21, 2000. The insurer acted with a lack of a reasonable basis for the delay in payment of permanent partial disability and a deliberate or reckless disregard of the lack of a reasonable basis for the delay in making payment of the additional 9 percent permanent partial disability. Therefore the administrative law judge appropriately awarded the applicant 200 percent of the delayed payment for the insurer's blatant disregard of its responsibility to pay the increased permanent partial disability.

The employer's insurer also contends that the administrative law judge erred in determining that the insurer acted with a lack of reasonable basis for delay in payment of medical expenses and a deliberate or reckless disregard of the lack of a reasonable basis for delay in payment of medical expenses and awarded the applicant a 200 percent penalty for delay in payment of medical expense. The insurer noted in a letter dated August 7, 2006 to the applicant's treating physician that the applicant reported he had a few years of no problems with his neck following the initial injury, and he indicated the pain in his neck did not start until one and a half years ago. The applicant denied in his testimony that he went a few years without problems in neck. The applicant testified that he has had pain and discomfort since the initial work injury and surgeries to his neck, and he returned to see his treating physician because his pain was getting so severe. The applicant denied that he reinjured his neck while exercising. In the early part of 2006 the applicant required additional cervical spine treatment and contacted the employer's insurer to cover the medical expenses which was denied.

The applicant testified that he forwarded to the insurer in August 2006 the note from Dr. Hemmy, his treating physician, which indicated that his most recent treatment was related to his initial work injury which was the responsibility of the insurer to pay. Therefore it appears that as early as August 2006 the employer had knowledge that the applicant's treatment was related to his work injury but refused to make payment. The employer's insurer acknowledged in its letter dated August 7, 2006 that in fact it had received a very short July 6, 2006 medical note indicating that the treatment from 2006 is directly related to the initial injury. Dr. Hemmy responded that the applicant was being treated for accelerated disease at an adjacent level to his fusion which was necessitated by the work injury.

Subsequently in August 2007 the applicant underwent an examination with Dr. Weiss, who prepared a report and also determined that the applicant's treatment was related to his initial work injury. The administrative law judge noted that the employer's insurer did not present any witnesses to establish what investigation took place or how any investigation was conducted and what any investigation revealed concerning the medical expenses. Based on the applicant's testimony as well as the evidence that the employer did not establish what investigation took place, and given Dr. Hemmy's conclusions which were transmitted to the insurer in August 2006 that his current treatment was related to his work injury, and given the insurer's failure to promptly pay the necessary medical expenses related to that treatment, the administrative law judge appropriately found that the employer's insurer acted with a lack of reasonable basis for delay in payment of medical expenses, and with a deliberate or reckless disregard of the lack of a reasonable basis for delay in payment of medical expenses and awarded the applicant 200 percent penalty for the delay in payment.

cc: Attorney Robert T. Ward
Attorney Gary S. Stanislawski


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