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The injuries in many Texas personal Injury cases are work-related. Because Texas employers do not have to carry workers’ compensation, defendants cannot be sure if an injured worker is covered and may not take all necessary steps to obtain the workers’ compensation claim file. The claim file will often have medical and vocational information of great value to the defendant on liability and damages. This blog post discusses why it is highly probable there is a workers’ compensation claim file and why it can be important in defending a claim.
Most Texas Employees have Workers’ Compensation Coverage
When an injury is work-related, the defendant should assume the plaintiff has workers’ compensation coverage and seek discovery from the plaintiff’s employer and the employer’s insurance carrier. Texas has a voluntary WC system so coverage is more complex than in other states. Coverage can take three forms:
- Statutory coverage through an insurance company
- Statutory self-insurance for larger companies
- Alternative plans under ERISA
Statutory coverage provides injured workers the benefits defined in the Texas Workers’ Compensation Act and DWC rules and protect employers from suits by injured workers. Most litigation connected with a work-related injury is against a third party if the employer has statutory coverage. Alternate plans are usually larger employers that pay medical and wage benefits that must be comparable to statutory benefits to give those employers protection from suit by the employee.
It is highly probable the plaintiff with a work-related injury will have workers’ compensation coverage. In 2022, a survey commissioned by the Texas Department of Insurance, Division of Workers’ Compensation (“DWC”) found 82.5% of employers representing 94% of employees has either subscribed to the WC system or had alternate plans.[1]
- 75% of employers representing 83% of employees subscribed.
- 5% of employers representing 11% of employees had alternate plans
- 5% of employers representing 6% of employees had no coverage
The industry types likely to have most work-related injuries have high subscription rates. Subscription rates have generally increased since 2018. These rates do not include employers with alternate plans. All federal, state, and local government employees have WC coverage. State law requires local governments to subscribe
| Industry Type | 2018 | 2022 |
| Mining/Utilities/Construction | 83% | 84% |
| Manufacturing | 72% | 78% |
| Wholesale Trade/Retail Trade/Transportation | 67% | 81% |
| All Private Sector Employees | 82% | 83% |
The workers’ compensation claim file potentially has information useful to the defendant:
- Because the medical benefit covers all medically necessary and appropriate care to treat the compensable injury, including aggravation of pre-existing conditions, the claim file will include an analysis of the extent of the injury due to the event. The workers’ compensation carrier has an incentive to identify any pre-existing conditions or injuries.
- The medical benefit covers all medically acute care, home care, long-term care and post-acute services not covered by health plans. There is no patient responsibility amount so no financial barrier to necessary care. If the plaintiff’s treating physicians did not request certain services, that may indicate they were not needed for the compensable injury.
- The claim file will have all medical bills filed with the carrier by the plaintiff or medical providers. There are DWC fee guidelines that limit the “maximum allowable reimbursement” for services. For any claims paid by the carrier, the lesser of the billed charges or the fee guideline amount is the amount “paid or incurred” and is the most that can be presented to the jury as part of past medical expenses. If the plaintiff did not submit past medical expenses to the carrier, the fee guideline amounts are relevant either as a failure to mitigate, or as a benchmark for the reasonable value of the services.
- Carriers are permitted to preauthorize surgeries and other medical procedures. The claim file will show the requests and the preauthorization decisions. Any preauthorization denial will include an opinion from a physician. Appeals of the denial may provide decisions by a physician in the same or similar specialty as the treating physician. There may also be physician opinions from retrospective review of services.
- The claim file will include examinations by physicians on work restrictions, impairment ratings, and when the person reached maximum medical improvement (“MMI”). These findings by a physician not chosen by the plaintiff may agree or disagree with the opinions of the plaintiff’s testifying physicians.
- The claim file should show any work restrictions by treating physicians and should show if the employer offered a job with accommodations or light duty whether the plaintiff accepted the offer or not.
- The claim file will show any wage replacement payments the plaintiff received. Even if these amounts cannot offset damages for loss of earnings, they show an economic incentive the plaintiff had to stay off work and diminish claims of economic hardship.
The workers’ compensation medical benefit is lifetime coverage for medically necessary care for the compensable injury. Therefore, the fee guidelines should apply to future medical care – the plaintiff’s life care plan – and the defendant should be able to show the jury the cost of future care at these rates.
If an injured worker with workers’ compensation coverage sues a third party, not the employer, the plaintiff’s counsel may advise the plaintiff not to use the workers’ compensation medical benefit. Instead, the plaintiff may use medical providers recommended by counsel under letters of protection. The plaintiff will then ask for past medical expenses at billed charges. It is still important to obtain the worker’s compensation file to see the First Notice of Injury and any medical examinations and impairment ratings. The carrier’s definition of the compensable injury can establish for what services the medical benefit could have been used and aid in establishing the reasonable value of the services the plaintiff received.
In summary, whenever an injury was work-related, the defendant should take all necessary steps to obtain the workers’ compensation claim file at the start of the case and to request supplements.
[1] Texas Department of Insurance, Division of Workers’ Compensation, “Employer Participation in the Texas Workers’ Compensation System, 2022 Estimates. The report may be downloaded at no charge at www.tdi.texas.gov/wc.