Update on Colorado Appellate Decisions in Workers' Compensation Law

• Jurisdiction: Colorado,United States
• Citation: Vol. 32 No. 6 Pg. 97
• Pages: 97
• Publication year: 2003

32 Colo.Law. 97 Colorado Lawyer 2003.

2003, June, Pg. 97. Update on Colorado Appellate Decisions In Workers' Compensation Law

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97

Vol. 32, No. 6, Pg. 97

The Colorado Lawyer
June 2003
Vol. 32, No. 6 [Page 97]

Specialty Law Columns
Workers' Compensation Report
Update on Colorado Appellate Decisions In Workers' Compensation Law
by Ralph Ogden

This column provides updates on workers' compensation decisions of the Colorado Supreme Court and Court of Appeals It is written to help practitioners keep up with both the appellate interpretations of the Workers' Compensation Act and the potential ramifications of those interpretations

Column Editor

Ralph Ogden of Wilcox & Ogden, Denver - (303) 399-5005

About The Author:

The author and column editor is Ralph Ogden of Wilcox & Ogden,
Denver - (303) 399-5005. The author represents the respondents in Whiteside v. Smith and Dworkin, Chambers & Williams, P.C. v. Provo, both of which are discussed in this article.

This article discusses recent Colorado appellate decisions that address workers' compensation issues.

Constitutionality of DIME Procedures

In Whiteside v. Smith,1 the Colorado Supreme Court upheld the Denver District Court's decision to strike down the Division Independent Medical Examination ("DIME") advance fee requirement as applied to a class of indigent claimants.2 CRS § 8-42-107.2(5) requires injured workers to pay a mandatory $675 DIME fee in advance of the DIME. Payment of that fee and the occurrence of the DIME itself are jurisdictional prerequisites to a hearing on the merits of a worker's challenge to two decisions by the employer-selected treating physician: (1) placement of the worker at maximum medical improvement ("MMI"); and (2) the extent of the worker's permanent medical impairment.3

There is no provision in the Workers' Compensation Act ("Act") that allows this cost to be waived or shifted to the insurer for any reason. As the Court noted,

. . . indigent claimants who cannot afford the fee will never obtain the benefit of an independent evaluation of their medical condition or, as a result, a determination of whether the termination of their temporary benefits and medical treatment was appropriate.4

The Court also noted that the General Assembly created the DIME system within the statutory scheme because of the potential for treating physicians to be biased in favor of the employer and the insurer who selected them.5

Of concern to the Court were statistics from the Division of Workers' Compensation ("Division"), which tracked claimants who challenged MMI ratings with a DIME. During 1999, 749 out of 2,501 applications, or 29 percent, resulted in reversal of the treating physician's determinations. A similar reversal rate occurred in 2000, where the number of reversals was 654 out of 2,556 applications, or 26 percent.6 These reversal rates indicate that approximately three out of ten workers have had temporary disability benefits and medical treatment terminated prematurely by employer-selected treating physicians.

In the Smith case, the named plaintiff was injured in November 1991 in an admittedly compensable accident. His employer-selected treating physician placed him at MMI in 1992 and gave him a 5 percent whole person impairment rating. He filed a timely objection to the final admission but did not request a DIME. At the time Smith was injured, there was no statutory deadline for requesting a DIME as long as the worker filed an objection to the final admission within sixty days.7 CRS § 8-42-107.2(2)(b) now states that claimants have only thirty days from the date of the final admission in which to request the DIME. Some aspects of this thirty-day deadline are being challenged on due process grounds.8

In 1999, Smith asked the Director of the Division to waive the mandatory DIME fee because he was indigent and, therefore, unable to pay. A prehearing administrative law judge issued an interlocutory order that denied this motion. Smith later filed an application for hearing and again requested a ruling that because he was indigent, either the Division or the insurer should be ordered to pay the cost of the DIME.

An administrative law judge ("ALJ") ruled that Smith was indigent pursuant to Chief Justice Directive 98-01, but also held that he lacked authority to waive the DIME fee or order that it be shifted to the insurer or the Division. An appeal to the Industrial Claim Appeals Office ("ICAO") was dismissed on the ground that the order was not final within the meaning of CRS § 8-43-301(2) because it did not award or deny benefits or penalties.9

After receiving the ALJ's order, Smith filed suit against the Director and the appeals examiners of the ICAO under 42 U.S.C. § 1983. He claimed that by requiring indigent workers to pay a fee that they were unable to pay, CRS § 8-43-107.2(5) deprived them of their due process right to a hearing to challenge the MMI and medical impairment decisions of their employer-selected treating physicians. The Denver district court certified the case as a class action under C.R.C.P. 23(a) and (b)(2).10

On cross-motions for summary judgment, the district court held that the fee requirement was unconstitutional as applied to the class of indigent workers on both due process and equal protection grounds. Both the Director and the ICAO appeals examiners appealed this order to the Colorado Supreme Court. The Court affirmed the district court judgment on due process grounds.11

The Court rejected the defendants' argument that injured workers did not have a constitutionally protected property right to workers' compensation benefits. It noted that the "substantive right" to workers' compensation was created by the General Assembly, and that it replaced an injured worker's common law right to sue his or her employer.12 Citing to a number of cases,13 the Court concluded:

For injured workers in Colorado, the Act secures certain benefits and supports claims of entitlement to those benefits.
. . . Once the employer admits liability, the Act entitles the claimant to property interests that include temporary benefits and medical treatment. Thus, after liability is determined, Smith and the class he represents possess statutorily created property interests in the continued receipt of disability benefits and medical treatment.14

In deciding the case on due process grounds, the Court noted:

[T]he question before us is not whether indigent claimants enjoy "equal access to the courts," but rather whether the DIME fee prohibits indigent claimants from exercising their right to administrative and judicial review of adverse decisions by the treating physician. . . .15

Due process means the opportunity to be heard at a meaningful time and in a meaningful manner. The question of whether due process has been satisfied in a given case was addressed by the U.S. Supreme Court in Mathews v. Eldridge.16 Mathews held that courts must analyze: (1) the private interest that is affected by the official...