SC Lawyer, January 2008, #4. The 2007 South Carolina Workers' Compensation Reform Act: An Overview.

South Carolina Lawyer

2008.

SC Lawyer, January 2008, #4.

The 2007 South Carolina Workers' Compensation Reform Act: An Overview

South Carolina LawyerJanuary 2008The 2007 South Carolina Workers' Compensation Reform Act: An OverviewFollowing months of spirited debate and consideration of numerous proposed bills introduced in both the House and Senate, the 117th Session of the S.C. General Assembly passed Senate Bill 332 on June 20, 2007. Act 111, as it would be designated, was signed into law by Gov. Sanford on June 25, 2007, and the law went into effect on July 1, 2007. To some, the new legislation is a welcome response to a call for sweeping reform of a system perceived to be out of control; to others, it has been mockingly coined the "Defense Lawyers' Relief Act of 2007," in anticipation of a likely increase in litigated issues. To be fair, this body of work represents a workable compromise achieved by the legislature despite widely competing and passionate interests held by its collective constituency, as well as its own members.

As with any comprehensive legislation, for every problem resolved, there are inevitably new questions and issues that have been raised, as well as some perhaps unintended consequences. Nonetheless, the statute is now in effect and has an immediate impact on anyone and everyone involved in the area of workers' compensation law, particularly practicing attorneys. The following article is written as a starting point and overview to expose the workers' compensation practitioner to changes contained in the new Act.

Application of new legislation

The most immediate concern is determining to what claims the legislation will apply. The bill contains a "Severability and Time Effective" clause that expressly states "this act takes effect July 1, 2007 or, if ratified after July 1, 2007 and except otherwise stated, upon approval by the Governor and applies to injuries that occur on or after this date [emphasis added]." At least initially, this language allowed room for some question as to whether the date of accident or date of filing the claim would control. Furthermore, because some portions of the legislation could be interpreted as remedial and/or procedural in nature, there was uncertainty as to whether some, if not all, of the provisions might be considered retroactive in scope.

The Supreme Court of South Carolina quickly and summarily addressed all of these questions in Pee Dee Regional Transportation v. South Carolina Second Injury Fund (August 24, 2007). The Court found the language of the statute clear and unambiguous and determined that all provisions of the Act will apply only to injuries that occur on or after July 1, 2007. Accordingly, in the absence of any further legislation or judicial decisions, for any accidents occurring before July 1, 2007, the prior statutory and judicial authority will control.

A notable exception to this date of effectiveness pertains to filings with the Second Injury Fund, which is taking the position that all new legislation is immediately effective regardless of the date of accident.

Pleadings

Under Section 42-1-700, claimants are no longer permitted to ask for "everything and the kitchen sink" in filing a claim and/or requesting a hearing by Form 50. On the flip side, defendants are prohibited from including a laundry list of defenses potentially applicable to any and all possible and perceivable claims.

Claimants are to plead on Form 50 injured or affected body parts and conditions "with as much specificity possible." Claimants may not describe injured body parts or conditions as "whole person" or "whole body" or "all body parts." A hearing shall not be held on a Form 50 that is found not to conform. However, the Commissioner is given some discretion in determining the compensability of body parts or conditions not listed or described in the Form 50. Specifically, the additional body part may be considered if the body part or condition is proven by a preponderance of evidence to have arisen out of and in the course of employment as described on a Form 50; if it is proven to the satisfaction of the Commissioner that the employee had no knowledge of the injury or condition on the date the Form 50 was completed (claimant is required to amend the Form 50 upon discovery of the injury or condition within a reasonable time period pursuant to the Regulations); or if the claimant is represented, then if the body part or condition is listed on the claimant's timely filed and served Pre-Hearing Brief (Form 58). The Form 50 must be signed by the claimant's attorney (or by the claimant if unrepresented) and serves as verification that the contents are accurate and true to the best of the preparer's knowledge.

The employer's Form 51 must not state that "all defenses apply" or contain other similar language. This would presumably also apply to affirmative defenses that cannot reasonably be considered to have application to the claim. A Form 51 found not to conform shall not be considered at the hearing. However, if a defense is not listed, it may still be considered by the Commissioner if it is proven to the Commissioner's satisfaction that the defendant had no knowledge of the facts supporting the defense at the time the Form 51 was completed and, in cases involving represented defendants, if the omitted defense is set forth on the defendant's timely filed and served Pre-Hearing Brief. Under existing Regulation 67-603 (C), the failure to timely file a Form 51 is deemed a general denial of liability for the benefits claimed; however, each special and affirmative defense allowed by the Act is forfeited, including the defenses available in Sections 42-9-60 (intoxication; willful intent), 42-15-20 (notice of accident), 42-15-40 (statute of limitations) and 42-17-90 (change of condition). The new legislation would tend to support the possibility of revival of affirmative defenses not included in the original Form 51. The attorney for a represented employer or an employer that is not represented must sign the Form 51 to verify that the contents are accurate and true to the preparer's best knowledge.

The Workers' Compensation Commission is currently drafting a revised version of Form 50 and Form 51, which will include a certification of accuracy to be signed by the preparer. In the meantime, the Commission is requesting that a temporary form be included with any Forms 50 and 51 filed for accidents occurring on or after July 1, 2007. The one-page form can be obtained from the Judicial Department of the Commission.

Workers' Compensation Commission awards

Section 42-9-5 specifies that any award made pursuant to the Workers' Compensation Act must be based upon specific and written detailed findings of fact substantiating the award. This is consistent with the decision Nettles v. Spartanburg School Dist., 341 S.C. 580, 535 S.E.2d 146 (Ct. App. 2000).

Failure to provide medical treatment and pay benefits under award

There is currently no recognized cause of action for bad faith in the context of workers' compensation in South Carolina. However, a new provision allows potentially substantial penalties to be assessed for a defendant's refusal to provide medical treatment or benefits ordered by the Commission. If a claimant brings an action to enforce an order authorizing medical treatment or payment of benefits and the Commission determines that an insurer, self-insured employer, self-insured fund or adjuster has acted without good cause in failing to authorize the same, then the claimant's attorney's fees and costs in enforcing the order will be assessed. The Commission may also impose sanctions for willful disobedience of an order, including, but limited to, a fine of up to $500 for each day of violation.

Furthermore, the Commission must then notify the Department of Insurance of such failure to authorize medical treatment or pay benefits. If the director of the Department of Insurance determines there has been a violation of Title 38, then further penalties may be imposed for each violation. If the Commission discovers a pattern of failing to pay benefits, then the chairman must notify the director of the Department of Insurance, upon which a hearing will be held to determine good cause for nonpayment. If the Department of Insurance determines that nonpayment was intentional three or more times within a two-year period, the director may revoke the license of the insurer to do business within this state. A pattern is established upon an insurer's failure to pay an award at least three times within a two-year period by failing to pay (1) for individual claims; (2) for a claim in which a claimant had to request enforcement of an award; or (3) any combination of the two. It is important to note that the provision does not require that a pattern be established in any single claim, but also based upon completely unrelated claims.

Appeals from Workers' Compensation Commission

Despite language contained in other versions and proposed bills, the new legislation does not involve the Administrative Law Judge Division in appeals, nor does it create a dedicated appeal panel of the Workers' Compensation Commission. Section 1-23-600 (D) of the Administrative Procedures Act has been revised to provide that appeals from the full commission of the Workers' Compensation Commission will now go straight to the Court of Appeals, bypassing the circuit court level. In fact, the Supreme Court's recent order in Pee Dee Regional Transportation was a direct response to a question from the parties regarding the proper court to which the appeal need be filed. Appeals from the Commission for injuries prior to July 1, 2007, will continue to be filed with the circuit court, with further appeal going to the Court of Appeals.

The new legislation establishes that the appeal to the Court of Appeals must be filed within 30 days from the date of the award or within 30 days after receipt of notice to be sent by registered mail of the award, but not after, whichever is longer. Importantly, the section states that the notice of appeal must state the grounds of the appeal or the alleged errors of law. This is consistent with what is required with the filing of an appeal in the circuit court; however, this is not something that would otherwise be required by the Court of Appeals. Therefore, it appears that the notice of appeal filed with the Court of Appeals must also include a statement of the grounds for appeal or alleged errors of law.

Another change to be noted is that, during the pendency of the appeal to the Court of Appeals, the employer is required to make weekly payments of compensation and provide medical treatment as ordered by the Commission. Interest accrued on any unpaid portion of the award must be paid at the legal rate established in Section 34-31-20 (B) during the pendency of the appeal.

Change of condition

Section 42-17-90 now requires that a change of condition be proven by a preponderance of evidence. In cases involving repetitive trauma and occupational disease, the same one-year time period for filing a claim will apply.

Settlements

Section 42-9-390 has been modified significantly. The prior version required that a copy of the settlement agreement be filed by the employer with the Commission and that the Commission approve the settlement (one Commissioner approving if the employee is represented by an attorney; four Commissioners approving if the employee is unrepresented). However, this language has been eliminated and replaced with the following: "The employer must file a copy of the settlement agreement with the commission if each party is represented by an attorney. If the employee is not represented by an attorney, a copy of the settlement agreement must be filed by the employer with the commission and approved by one member of the commission."

This apparently makes it possible for a settlement reached by fully represented parties to simply be filed with the Commission without approval by a Commissioner. Further, a settlement involving a pro se claimant need only be approved by one Commissioner. This new provision is not entirely unlike settlement approvals in civil litigation; yet, it has created some uneasiness among some workers' compensation practitioners who are more comfortable with the added level of protection seemingly provided by Commission approval of settlement. In this regard, there does not appear to be any language prohibiting parties from requesting Commission approval of a settlement, even if not specifically required under the new legislation.Scheduled members (body parts)

Two new scheduled members have been added to Section 42-9-30, the "scheduled member" provision of the Workers' Compensation Act. The shoulder is now specifically listed and is worth a total value of 300 weeks. This provision appears to be a response to Therrell v. Jerry's Inc., 370 S.C. 22, 633 S.E.2d 893 (2006), in which the claimant sustained a work-related rotator cuff tear in the right shoulder; was issued an impairment rating to the right upper extremity; then was awarded permanency benefits to the right arm. The Court ultimately upheld the disability award, but provided a lengthy discussion as to the calculation of scheduled member awards. The Court instructed that the disability was improperly awarded to the arm, since the rotator cuff injury arguably did not involve the arm, which could be considered different than the "upper extremity." In such cases, the Commission must use Section 42-9-30 (20), which operates as a "catch-all" provision for any member, organ or part of the body not otherwise covered within Section 42-9-30. The Commission must also rely upon the AMA Guides or other accepted medical standards to calculate a disability to the "whole person." Following Therrell, there were conflicting interpretations as to how shoulder injuries should and would be awarded by the Commission. The new legislation provides a resolution to this issue, at least with regard to injuries occurring on or after July 1, 2007.

The hip is also now included as a scheduled member and is worth a total of 280 weeks. For all accidents occurring on or after July 1, 2007, this provision effectively reverses Gilliam v. Woodside Mills, 319 S.C. 385, 461 S.E.2d 818 (1995), which held that the hip is not a scheduled member.

Another significant change in the legislation concerns disability to the back. Under the prior version of the Act, a finding of 50 percent or more loss of use of the back was presumed to constitute permanent and total disability, entitling a claimant to 500 weeks of disability. Otherwise, for any loss of use less than 50 percent, disability would be awarded based upon a percentage of the total value of the back, which is 300 weeks. The new legislation provides that there is now a rebuttable presumption of permanent and total disability in cases involving 50 percent or more loss of use of the back. However, any disability to the back 50 percent or more, whether permanent and total or not, will be calculated based upon 500 weeks, whereas any disability to the back less than 50 percent will be calculated based upon 300 weeks. The legislation does not address cases involving loss of use of the back, which is more than 40 percent, but less than 50 percent. This new provision is a change in the current case law, specifically with regard to Bateman v. Town & County Furniture Co., 287 S.C. 158, 336 S.E.2d 890 (Ct. App. 1985), which held that the presumption of permanent and total disability applies if a claimant has 50 percent or more loss of use of the back, regardless of whether the claimant has actually returned to work.

The introductory language accompanying the bill submitted by the General Assembly also included the following purpose: "to amend Section 42-9-30 so as to limit the disability award to ten percent greater than the medical impairment rating unless the commissioner finds extraordinary circumstances and lists factors to be considered for extraordinary circumstances . . . " However, this language does not appear to have been included the final text of the statute.

Medical care

Practitioners in the field of workers' compensation are no doubt familiar with Dodge v. Bruccoli, Clark, Laymen, Inc., 334 S.C. 574, 514 S.E.2d 593 (Ct. App. 1999), which is often cited with regard to a request or award involving lifetime medical care, now commonly referred to as "Dodge medicals." Dodge confirmed that a claimant is able to receive specific medical care pursuant to Section 42-15-60, even after maximum medical improvement has been achieved, so long as it would tend to lessen the period of disability. The new legislation requires expert medical evidence stated to a reasonable degree of medical certainty to support that further medical care would tend to lessen the period of disability past 10 weeks. Additionally, each award of permanency from the Commission must contain a finding as to whether further medical treatment or modalities must be provided to the employee.

The prior version of Section 42-15-60 specified that "[i]n case of a controversy arising between employer and employee, the Commission may order such further medical, surgical, hospital or other treatment as may in the discretion of the Commission be necessary." Significantly, this language was removed from the new version. However, the new version of Section 42-15-60 ends by stating that the employer may continue to provide authorized medical care, which shall be accepted by the employee, "unless otherwise ordered by the commission for good cause shown."

An important addition to Section 42-15-60 involves settlement of a claim by Form 16 ("Agreement for Permanent Disability/Disfigurement Compensation.") Under Section 42-15-60 (B)(1), an employer is not required to provide further medical treatment or medical modalities after one year from the date of full payment of the settlement unless the form specifically provides otherwise. This clarifies the issue regarding whether a claimant's right to Dodge medical would be presumed to follow a Form 16 settlement if not otherwise specified.

Perhaps the most significant addition to the medical treatment portion of the Act is Section 42-15-60 (B)(3), which states that "[i]n no case shall an employer be required to provide medical treatment or modalities in any case where there is a lapse in treatment of the employee by an authorized physician in excess of one year." There are two exceptions. If the settlement agreement or Commission order specifies otherwise, then this provision does not apply. The second exception applies if the employee has made reasonable attempts to obtain further treatment or modality from an authorized physician, but through no fault of the employee's own, is unable to obtain such treatment or modalities. Otherwise, an employer/carrier has an argument against providing any medical care to a claimant if more than a year has lapsed in authorized treatment.

Aggravation of pre-existing impairment or combined effects

In Ellison v. Frigidaire Home Prods., 371 S.C. 159, 638 S.E.2d 664 (2006), the Supreme Court held that, pursuant to Section 42-9-400 (a), a claimant is entitled to compensation for disability that is substantially greater by reason of the combined effects of a pre-existing impairment and subsequent work-related injury or due to aggravation of the pre-existing impairment. Section 42-9-35 has clarified this decision with regard to injuries sustained on or after July 1, 2007.

First, the claimant is required to prove by a preponderance of the evidence, including medical evidence (defined as expert medical opinion or testimony stated to a reasonable degree of medical certainty, documents, records or other material that is offered by a licensed health care provider), that a subsequent injury aggravated a pre-existing condition or permanent physical impairment or that the pre-existing condition or permanent physical impairment aggravated the subsequent injury. There must be an aggravation of the condition present, not simply a combination or stacking of the two conditions. In such case, the Commission may award compensation to the employee for the resulting disability. However, if the subsequent injury is limited to a single body part or scheduled member (except for total disability to the back under Section 42-9-30 (21)), the subsequent injury must impair or affect another body part of system in order to obtain benefits in addition to those provided under Section 42-9-30. Otherwise, if the subsequent injury affects only a single body part or scheduled member, recovery is limited to Section 42-9-30. This section applies regardless of the employer's knowledge of the pre-existing condition. Of note, the language in Section 42-9-400 (a) that was relied upon by the Supreme Court in Ellison has been removed in the new legislation.

Section 42-9-150 has also been modified. This section provides that, if an employee has a prior permanent disability or injury from service in the U.S. Armed Forces or in another employment other than that in which he received a subsequent permanent injury by accident, such as specified in Section 42-9-30 (scheduled members) or in the second paragraph of Section 42-9-10 (loss of both hands, arms, shoulders, feet, legs, hips or vision in both eyes, or any two thereof, constituting total and permanent disability), then the worker shall be entitled to compensation only for the degree of disability that would have resulted from the later accident if the earlier disability or injury had not existed. The exception to this provision is when the worker may receive further benefits as provided under Section 42-9-35. Essentially, this allows for a worker to receive compensation for only the amount of disability sustained in the subsequent employment, regardless of the prior disability, unless Section 42-9-35 applies.

Section 42-9-170, which involves subsequent injuries sustained in the same employment, has also been modified. Section 42-9-170 (A) provides that, if the worker has a previous permanent partial disability to a hand, arm, shoulder, foot, leg, hip or eye, and by subsequent injury in the same employment incurs total permanent disability through the loss of another member, the employer's liability is limited to the subsequent injury only, except when the employee would qualify for further benefits under Sections 42-7-310, 42-9-400 and 42-9-410 (the Second Injury Fund provisions). However, subsection "A" is only effective until June 30, 2008. Thereafter, subsection "B" applies, which limits recovery to the disability sustained as a result of the subsequent injury only, except where the employee would qualify for additional benefits under Section 42-9-35.

Stress claims, mental injuries and mental illness

Mental injuries and mental illness have been added to the statutory codification of "stress" as an injury under Section 42-1-160. However, stress, mental injuries and mental illness will no longer be considered a personal injury unless a preponderance of evidence supports that (1) the employment conditions causing the condition were extraordinary and unusual in comparison to the normal conditions of the particular employment (codifying Shealy v. Aiken County, 341 S.C. 448, 535 S.E.2d 438 (2000)) and (2) medical evidence supports causation. Stress as a result of events incidental to normal employer/employee relations remains excluded from coverage. Such incidental events are specified as including personnel actions by the employer, such as disciplinary actions, work evaluations, transfers, promotions, demotions, salary reviews or terminations, except when performed in an extraordinary and unusual manner. The new legislation adds mental injuries, heart attacks, strokes and embolisms or aneurisms to the conditions excluded if due to incidental events.

The reform also addresses the aggravation of stress, mental injuries and mental illness. An alleged aggravation of these conditions may not be found compensable unless the aggravation is (1) admitted by the employer/carrier; (2) noted in a medical record of an authorized physician that, in the physician's opinion, the condition is at least in part causally related or connected to the injury or accident, whether the physician refers the employee for treatment of the condition; (3) found to be causally related or connected to the accident or injury after evaluation by an authorized psychologist or psychiatrist; or (4) noted in a medical record or report of the employee's physician as causally-related or connected to the injury or accident.

Medically complex cases

In the 1999 Supreme Court decision Tiller v. National Health Care, 334 S.C. 333, 513 S.E.2d 843 (1999), it was determined that medical evidence is not required in workers' compensation claims, even in medically complex cases. New Section 42-1-160 (E) changes that requirement for accidents on or after July 1, 2007, requiring that, in "medically complex cases" an employee shall establish by medical evidence that the injury arose in the course of employment. "For purposes of this subsection, 'medically complex cases' means sophisticated cases requiring highly scientific procedures or techniques for diagnosis or treatment excluding MRI's, CAT scans, x-rays, or other similar diagnostic techniques." Presumably, the mere fact that an MRI, CT scan, x-ray or similar diagnostic procedure was utilized in the diagnosis or treatment of a claimant would not, in and of itself, preclude a case from being considered "medically complex." However, that issue has not been specifically addressed in the legislation. Prior to Tiller, medically complex cases were generally understood to include conditions such as those involving occupational diseases (silicosis, asbestosis, etc.) and injuries to internal organs (physical brain injury, hernia, etc.), to name only a few.

Repetitive trauma

Following Pee v. AVM, Inc., 352 S.C. 167, 573 S.E.2d 785 (2002), which established that carpal tunnel syndrome can be a compensable injury by accident, there was growing uncertainly as to exactly what other types of repetitive injuries might qualify as compensable. The new legislation has included an entire new section devoted to repetitive trauma. Section 42-1-172 defines "repetitive trauma injury" as "an injury which is gradual in onset and caused by the cumulative effects of repetitive traumatic events. Compensability of a repetitive trauma injury must be determined only under the provisions of this statute." Repetitive trauma injury requires a specific finding of fact by a Commissioner, by a preponderance of the evidence, of a causal connection that is established by medical evidence (defined as expert opinion or testimony stated to a reasonable degree of medical certainly, documents, records or other materials that is offered by a licensed and qualified medical physicians) between the repetitive activities that occurred while the employee was engaged in the regular duties of his employment and the injury. Medical evidence must establish a direct causal relationship between the conditions under which the work was performed and the injury. Upon reaching maximum medical improvement, the claimant with a compensable repetitive trauma injury may seek benefits pursuant to Section 42-9-10 (total wage loss), Section 42-9-20 (partial wage loss) or Section 42-9-30 (scheduled member), as well as medical benefits as provided in the Act.

Section 42-1-160 (F) provides that "the word 'accident' as used in this title must not be construed to mean a series of events in employment, of a similar or like nature, occurring regularly, continuously, or at frequent intervals in the course of such employment, over extended periods of time. Any injury or disease attributable to such causes must be compensable only if culminating in a compensable repetitive trauma injury pursuant to Section 42-1-172 or an occupational disease pursuant to the provisions of Chapter 11 of this title." Thus, only those repetitive injuries found compensable under Section 42-1-172 will be considered the result of an "accident" under the new legislation.

Occupational disease

Occupational disease claims must now be proven by a preponderance of the evidence. Although the words "medical evidence" are not specifically used in the statute, according to Section 42-11-10 (C), "[a]s used in this section, medical evidence means expert opinion or testimony stated to a reasonable degree of medical certainly, documents, records, or other materials that is offered by a licensed health care provider." It is presumed that occupational disease may be considered medically complex, requiring expert medical opinion to prove causation.

No compensation is payable for occupational disease unless the employee suffers a disability as described in Section 42-9-10 (total wage loss), Section 42-9-20 (partial wage loss) or Section 42-9-30 (scheduled member).

Notice and statute of limitations

Section 42-15-20 requires that notice of an accident be provided to the employer within 90 days of the accident. Following Bass v. Isochem, 365 S.C. 454, 617 S.E.2d 369 (Ct. App. 2005), there was uncertainty as to when notice was required in cases involving repetitive trauma, i.e., within 90 days of each "mini accident" or within 90 days of the resulting disability. The revised statute addresses this issue and requires that, in cases of repetitive trauma, notice must be given within 90 days of the date the employee discovered or could have discovered that the condition is compensable, unless reasonable excuse is made to the satisfaction of the Commission for not giving timely notice and the Commission is satisfied that the employer has not been unduly prejudiced. The use of the word "compensable" in this provision is potentially subject to varying interpretations as to its meaning. The language appears to directly track the language used in Bass v. Isochem, which discussed the need to provide notice within 90 days of the time the claimant became disabled and could have discovered with reasonable diligence that the condition is compensable. Compensable used in this context would reasonably seem to be synonymous with "work related."

The two-year statute of limitations under Section 42-15-40 has also been modified to account for the new repetitive trauma legislation. In cases of repetitive trauma, a claim is barred unless filed within two years after the employee knew or should have known that the injury is compensable. Again, the statute uses the word "compensable." The revised provision also includes a statute of repose, specifying that a claim for repetitive trauma must be filed no more than seven years after the date of injurious exposure. "This section applies regardless of whether the employee was aware that his repetitive trauma injury was the result of his employment." This final sentence might be used to clarify the use of the word "compensable" earlier in the section, as the claimant's knowledge of whether the repetitive trauma injury is work related is apparently irrelevant with regard to the deadline for filing a claim; or, it may actually be specifically referring to the seven-year statute of repose. In any event, this alters the filing requirement established in White v. MUSC, 355 S.C. 560, 586 S.E.2d 157 (Ct. App. 2003), which held the statute of limitations in repetitive injury claims begins to run on the last day of exposure.

Exclusion of certain types of employment - truck drivers

Section 42-1-360 has been revised to include some old and one new category of workers that are not to be considered subject to the Workers' Compensation Act. Most notable is the addition of independent truck drivers to this group.

Certain truckers classified as independent contractors will no longer be considered to be employees. This category consists of truckers who own or hold a vehicle (tractor-trailer, tractor or other vehicle) under a bona fide lease-purchase or installment-purchase agreement, who provides the vehicle and the individual's services as a driver to a motor carrier under a valid independent contractor contract. Importantly, the lease-purchase or installment-purchase agreement may not be between the trucker and the motor carrier, but may be between the individual and an affiliate, subsidiary or related entity or person of the motor carrier or any other lessor or seller. If such conditions are met, then the trucker is considered an independent contractor and not an employee of the motor carrier.

Other categories of excluded workers now listed under Section 42-1-360 include railroads/railway express companies and railroad/railway express company employees (previously listed separately under Section 42-1-350); persons engaged in selling any agricultural product for a producer of the product on commission or for other compensation, paid by the producer, when the product is prepared for sale by the producer (previously listed separately under Section 42-1-370); and licensed real estate sales persons engaged in the sale, leasing or rental of real estate for a licensed real estate broker on a straight commission basis with a signed, valid independent contractor agreement with the broker (previously listed separately under Section 42-1-380; see South Carolina Workers' Compensation Comm'n v. Ray Covington Realtors, Inc., 318 S.C. 546, 459 S.E.2d 302 (1995)).

Under Section 42-5-40, any employer required to secure the payment of compensation who refuses or neglects to do the same is subject to a fine of $10 per day (increased from 10 cents per day) for each employee at the time insurance is due, but not less than $10 (increased from $1) or more than $100 (increased from $50) for each day of refusal or neglect. All fines are to be paid to the General Fund.

Communicating with health care providers

In the wake of Brown v. Bi-Lo, Inc., 354 S.C. 436, 581 S.E.2d 836 (2003), the legislature has provided specific procedures regarding communications with a treating physician or health care provider, previously referred to as "ex parte communications with physicians." Section 42-15-95 (B) provides that a health care provider who provides examination or treatment for any injury, disease or condition for which compensation is sought under the Workers' Compensation Act may discuss or communicate an employee's medical history, diagnosis, causation, course of treatment, prognosis, work restrictions and impairments with the insurance carrier, employer, their respective attorneys or certified rehabilitation professionals.

In exchange, the employee (1) must be notified in a timely fashion, in writing or verbally, of the discussion or communication and may attend and participate; (2) must be advised prior to the discussion or communication; and (3) must be provided a copy of the written questions at the same time they are provided to the health care provider, as well as be provided a copy of the response. Such communications must not be in conflict or interfere with the employee's examination or treatment. Any discussions, communications, medical reports or opinions obtained in accordance with these provisions will not constitute a breach of the physician's duty of confidentiality. However, any information that is obtained in violation of this section must be excluded from any proceedings (i.e., fruit of the poisonous tree).

Section 42-15-95 was also modified to require the release of all information pertaining directly to a workers' compensation claim from an employee's health care facility to the insurance carrier, the employer, the employee, their respective attorneys or certified rehabilitation professionals, or the S.C. Workers' Compensation Commission within 14 days of receipt of written request.

Section 42-15-80 further specifies that facts communicated to or otherwise learned by a physician or surgeon are not privileged. The section requires that the Commission promulgate regulations establishing the role of rehabilitation professionals and other similarly situated professionals, giving consideration to the duties owed to both the employer and employee.

Further discussion of the 2007 Workers' Compensation Reform Act will take place in Part Two of this article, to be published in the March 2007 issue of the South Carolina Lawyer.