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North Carolina Workers

North Carolina Workers' Compensation Act Reform

The Transportation Newsletter
(July 1, 2011)

On 13 June 2011 the North Carolina General Assembly ratified a bill entitled “An Act Protecting and Putting North Carolina Back to Work by Reforming the Workers’ Compensation Act.” It is anticipated that Governor Beverly Perdue will sign the bill. While the original bill was a business initiative, the ultimate ratified version is a compromise crafted by representatives from all participants in the workers’ compensation system, including business and industry, insurance, organized labor, and trial attorneys. The most significant provisions of the bill are summarized as follows:

Definition of “Medical Compensation”: The bill amends the definition of “medical compensation” to include (a) attendant care services prescribed by a health care provider; and (b) vocational rehabilitation.

Suitable Employment: The bill adds a definition of “suitable employment.” Prior to reaching maximum medical improvement (“MMI”), suitable employment means any employment that is within the employee’s work restrictions, including rehabilitative or other noncompetitive employment approved by the authorized treating physician. After reaching MMI, suitable employment means employment that the employee is capable of performing considering the employee’s preexisting and injury-related physical and mental limitations, vocational skills, education, and experience and is located within a 50-mile radius of the employee’s residence at the time of injury, or the employee’s current residence if the employee had a legitimate reason to relocate since the date of injury. This new definition of suitable employment eliminates any consideration of the wage rate of the new position relative to the employee’s pre-injury wages.

Willful Misrepresentation in Applying for Employment: No compensation shall be allowed if the employer proves that either at the time of hire, on receiving notice of removal of conditions from a conditional offer of employment, or during the course of a post-offer medical examination: (1) the employee knowingly and willfully made a false representation as to the employee’s physical condition; (2) the employer relied upon one or more false representations by the employee, and the reliance was a substantial factor in the employer’s hiring decision; and (3) there was a causal connection between the false representation by the employee and the subsequent injury or occupational disease.

Second Opinion Examination: Upon written request by the employee, the employer may authorize and pay for a second opinion examination by a physician. If, within 14 days after the employee’s request, the employer denies the request or the parties are unable to agree upon a physician to perform a second opinion examination, the employee may request that the Industrial Commission order a second opinion examination, to be paid for by the employer.

Change of Authorized Treating Physician: The employee may request Industrial Commission approval to change treating physicians to one chosen by the employee, but must show by a preponderance of the evidence that the change is reasonably necessary to effect a cure, provide relief, or lessen the period of disability. When ruling on the employee’s request to change treating physicians, the Commission may disregard or give less weight to the opinion of a physician from whom the employee sought evaluation or treatment before the employee first requested authorization in writing from the employer, insurer, or Commission to treat with that physician.

Refusal of Employee to Accept Medical Treatment: Refusal of the employee to accept medical treatment when ordered by the Commission shall bar the employee from further compensation until such refusal ceases, unless the Commission determines that the refusal was justified. Any Commission order suspending compensation shall specify what action the employee should take to end the suspension and reinstate compensation.

Access to Medical Information and Communication with Health Care Providers: The bill amends Section 25.6 of the Act to provide greater access to medical information for employers. It defines “relevant medical information” as any medical record, report, or information that is restricted to the particular evaluation, diagnosis, or treatment of the injury or disease for which compensation is sought, OR reasonably related to that injury or disease, OR related to an assessment of the employee’s ability to return to work as a result of the injury or disease. The bill provides that an employer (defined to include also the employer’s attorney, insurer, or third-party administrator) is entitled, without the express authorization of the employee, to obtain the employee’s medical records containing relevant medical information. In a denied claim or a claim where the employer is not paying medical compensation to the provider from whom the records are sought, the employer must provide the employee with contemporaneous written notice of the request for medical records. The employer shall provide the employee with a copy of medical records received from the provider within 30 days.

The employer may communicate in writing with the employee’s treating physician, without express authorization from the employee, to request the following additional information: (a) diagnosis; (b) appropriate course of treatment; (c) anticipated time the employee will be out of work; (d) the relationship, if any, of the employee’s condition to the employment; (e) work restrictions related to the condition; (f) the kind of work for which the employee may be eligible; (g) the anticipated time the employee will be restricted; and (h) any permanent impairment as a result of the condition. The employer must provide the employee with contemporaneous written notice of the written communication to the physician and must provide to the employee a copy of the physician’s response within 10 days of receipt.

An employer may also communicate orally with the employee’s authorized health care provider to obtain relevant medical information not contained in the employee’s medical records, not available through written communication, and not otherwise available to the employer, subject to the following: (1) the employer must give the employee prior notice of the purpose of the intended oral communication and an opportunity to participate in the oral communication at a mutually convenient time; and (2) the employer must provide the employee with a summary of the communication with the health care provider within 10 business days of any oral communication in which the employee did not participate.

An employer may also submit relevant medical information not already contained in the employee’s medical records to the employee’s authorized health care provider and may communicate with the health care provider about the additional information, so long as the employer first notifies the employee in writing and provides a copy of the proposed written communication and the additional information to be submitted. The employee has 10 business days to consent or object to the proposed communication. If consent is given or if the employee does not make a timely objection, then the employer may submit the additional information to the health care provider. Upon a timely objection, however, the employee may request a protective order to prevent the written communication, in which case the employer must refrain from communicating with the health care provider until the Commission rules on the employee’s request. The Commission may assess costs, including attorney’s fees, if it determines that either party has acted unreasonably.

The employer may communicate with a health care provider to request medical bills or a response to a pending written request, or about nonsubstantive administrative matters.

Independent Medical Examination: An employee claiming compensation must submit to an independent medical examination if requested by the employer, even if the employer has denied the claim. If the employee refuses, his right to compensation shall be suspended until the refusal ceases, unless the Commission determines the refusal was justified. Any Commission order suspending compensation must specify what action the employee should take to end the suspension or reinstate compensation.

500-Week Cap on Temporary Total Disability Benefits: Compensation for temporary total disability is capped at 500 weeks from the date of first disability. However, an employee may qualify for “extended compensation” if 425 weeks have passed since the date of first disability when he first applies for such extended compensation, and if he proves by the preponderance of the evidence that he has sustained a total loss of wage earning capacity. When an employee is receiving full retirement benefits under section 202(a) of the Social Security Act, after attainment of retirement age as defined in section 216(l) of the Social Security Act, the employer may reduce the extended compensation by 100% of the employee’s retirement benefit.

Permanent Total Disability: An employee may qualify for permanent total disability only if the employee has one or more of the following physical or mental limitations resulting from the injury: (1) loss of both hands, both arms, both feet, both legs, both eyes, or any two thereof, as provided by G.S. 97-31(17); (2) spinal injury involving severe paralysis of both arms, both legs, or the trunk; (3) severe brain or closed head injury as evidenced by severe and permanent sensory or motor disturbances, communication disturbances, complex integrated disturbances of cerebral function, or neurological disorders; or (4) second or third-degree burns to 33% or more of the total body surface.

500-Week Cap on Temporary Partial Disability Benefits: An employee may now receive up to 500 weeks of compensation for temporary partial disability (as opposed to no more than 300 weeks from the date of the injury under the current version of G.S. 97-30).

Refusal of Employee to Accept Suitable Employment: The bill clarifies that if the Commission suspends an employee’s compensation due to the employee’s refusal of suitable employment, the Commission’s order must specify what actions the employee should take to end the suspension and reinstate compensation. It also adds a new sentence providing that nothing in the Act prohibits an employer from contacting the employee directly about returning to suitable employment with contemporaneous notice to the employee’s counsel, if any.

Vocational Rehabilitation: An employer may utilize vocational rehabilitation services regardless of whether the employee has reached MMI. If the employee has not returned to work or has returned to work earning less than 75% of his average weekly wage and is receiving temporary partial disability benefits, then the employee may request vocational rehabilitation services, including education and retraining in the North Carolina community college or university systems so long as the education and retraining are reasonably likely to increase substantially the employee’s wage earning capacity. This 75% threshold figure has no impact on whether a job constitutes “suitable employment.” The employer may make the initial selection of a vocational rehabilitation provider. At any point, however, either party may request the Commission to order a change in providers for good cause.

Vocational rehabilitation services shall include a vocational assessment and formulation of an individualized written rehabilitation plan with the goal of substantially increasing the employee’s wage earning capacity, subject to specific provisions outlined in G.S. 97-32.2. Job placement activities may commence after completion of the individualized written rehabilitation plan. Refusal of the employee to accept or cooperate with vocational rehabilitation services when ordered by the Commission shall bar the employee from compensation until such refusal ceases, unless the Commission finds the refusal justified.

Increase in Death Benefits: The bill increases compensable death benefits from 400 weeks to 500 weeks. Maximum burial expenses in compensable death claims increase from $3,500 to $10,000.

Amendments Pertaining to Commissioners: The bill decreases the number of Commissioners from seven to six. Commissioners are appointed to terms of six years, and no commissioner may serve more than two terms. Appointments of Commissioners by the Governor are subject to confirmation by the General Assembly by joint resolution.

Click here to view the full Summer 2011 edition of the Transportation Industry Newsletter.

Caroline Hudson Lock
T (336) 378-5341
F (336) 378-5400
Associated Attorneys
Associated Industries

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