The Appeal CommissionThe Workers Compensation Act of Manitoba

Preamble

The employer is appealing the decision made by the Workers Compensation Board ("WCB") that the employer is not entitled to cost relief. A videoconference hearing was held on February 16, 2022 to consider the employer's appeal.

Issue

Whether or not the employer is entitled to cost relief.

Decision

The employer is not entitled to cost relief.

Background

The worker has an accepted WCB claim for an injury to their right shoulder that occurred at work on February 19, 2016, when a piece of equipment they were using gave out and pulled their shoulder forward. The worker’s claim was accepted for a rotator cuff sprain/strain on March 17, 2016 and payment to the worker for various benefits started.

The worker returned to work on modified duties in March 2016 based on restrictions provided by their treating family physician. An MRI study of the worker’s right shoulder taken on May 5, 2016 indicated a “Large full-thickness rotator cuff tendon tear” and the worker was referred to an orthopedic surgeon who performed an arthroscopy on January 23, 2017.

A further MRI study was conducted on May 26, 2017 which indicated a re-tear of the worker’s rotator cuff and the treating orthopedic surgeon recommended rotator cuff repair surgery on June 8, 2017. Due to the worker’s non-compensable health issues, the repair surgery was delayed until December 14, 2017.

On December 14, 2017, the employer requested cost relief on the worker’s claim noting the wait time for the worker’s additional surgery along with their non-compensable health issues had prolonged the claim. On the same date, the WCB advised the employer the worker’s claim did not meet the criteria under their cost relief policy and as such, the employer was not entitled to cost relief.

On June 12, 2018, the employer again requested cost relief due to the undue burden the worker’s claim placed on them and on June 26, 2018, the WCB again advised the employer they were not entitled to cost relief. On July 12, 2018, the employer requested reconsideration of that decision to Review Office and on July 24, 2018, Review Office determined the employer was not entitled to cost relief, noting the worker’s non-compensable health issues were not “…predominantly attributable to the February 19, 2016 compensable right shoulder injury” and cost relief would not be provided. Further, Review Office noted there were delays in the worker’s claim but those delays were related to the adjudication and medical management of the worker’s claim, including the delay in the second surgery.

The employer’s representative submitted additional medical information and requested Review Office reconsider the earlier decision the employer was not entitled to cost relief on March 8, 2021. The submission included a March 2, 2021 medical opinion from a third party physician who opined, after reviewing the worker’s file, including the diagnostic imaging, the worker had a pre-existing condition in their right shoulder. The third party physician further opined the worker’s pre-existing right shoulder condition significantly prolonged their WCB claim. Review Office returned the worker’s file to the WCB’s Compensation Services on March 10, 2021 for further review and on March 26, 2021, the WCB provided the employer with a decision letter advising the WCB disagreed with the third party physician’s opinion the worker had a pre-existing condition that prolonged the claim and advising the employer was not entitled to cost relief.

On September 24, 2021, the employer’s representative again submitted the additional medical evidence from the third party physician and requested Review Office reconsider the WCB’s decision.

Review Office found on October 12, 2021, the employer was not entitled to cost relief. Review Office relied on and accepted the opinion of the WCB’s orthopedic consultant and agreed that the worker did have a pre-existing degenerative condition in their right shoulder; however, found that condition did not affect the length of the worker’s claim or impact their recovery from the compensable injury. Review Office further determined the worker’s requirement for a second rotator cuff repair surgery did not meet the criteria under the WCB’s policies as a further injury subsequent to a compensable injury as it was not a separate injury and was instead the result of a re-tear or recurrent tear of the original compensable injury.

The employer’s representative filed an appeal with the Appeal Commission on October 19, 2021 and a videoconference hearing was arranged for February 16, 2022.

Reasons

Applicable Legislation and Policy

The Appeal Commission is bound by The Workers Compensation Act (the Act) and the policies of the WCB’s Board of Directors. The Act provides for cost relief/cost transfer in a number of circumstances.

This appeal deals with cost relief in the case of a worker with a pre-existing condition. Cost relief, in such cases, is provided pursuant to subsection 81(1) of the Act and WCB Policy 31.05.10, Cost Relief/Cost Transfer - Class E (the Cost Relief Policy).

The Cost Relief Policy outlines circumstances in which claim costs may be removed from the claim costs experience of a Class E accident employer and assigned to a collective cost pool. This process is called "cost relief."

Circumstances in which cost relief may be available to eligible employers are set out in the Cost Relief Policy and further described in Schedules to that Policy, and include where:

• A claim is either primarily caused by a pre-existing condition or significantly prolonged by the pre-existing condition. See Schedule A – Pre-Existing Conditions.

…

• The injury or illness is compensable under policy 44.10.80.40…See Schedule C…

Schedule A to the Cost Relief Policy states, in part, as follows:

When the claim is either caused primarily by a pre-existing condition or is significantly prolonged by the pre-existing condition, the WCB may provide Cost Relief to Class E Employers except when the pre-existing condition relates to a previous accident with the same employer.

…

50% Relief 

For other claims involving a pre-existing condition, 50% Cost Relief may be provided. When a claim is significantly prolonged by a pre-existing condition, Cost Relief for 50% of the claim costs, other than the costs of any impairment award, will be provided to the employer if the worker's time lost from work is greater than 12 weeks…

"Pre-existing condition" is defined in WCB Policy 44.10.20.10, Pre-Existing Conditions, as "…a medical condition that existed prior to the compensable injury."

Schedule C to the Cost Relief Policy states, in part, as follows:

Cost Relief may be provided to the Accident Employer if an injury is compensable as a "secondary injury" under policy 44.10.80.40…Policy 44.10.80.40 excludes injuries that are part of the normal course of treatment and recovery…Cost Relief is not provided for such injuries.

WCB Policy 44.10.80.40, Further Injuries Subsequent to a Compensable Injury ("the Further Injuries Policy") applies to a separate injury which is not a recurrence of the original compensable injury, but where there may be a causal relationship between the further injury and the original compensable injury. This policy establishes the principles where a further injury is compensable:

(i) when the cause of the further injury is predominantly attributable to the compensable injury; or

(ii) when the further injury arises out of a situation over which the WCB exercises direct specific control; or

(iii) when the further injury arises out of the delivery of treatment for the original compensable injury.

The Further Injuries Policy excludes injuries that are part of the normal course of treatment and recovery from the definition of “further separate injury”. Therefore, Cost Relief is not provided for such injuries.

Worker's Position

The worker did not participate.

Employer’s Position

The employer was represented by an advocate who participated via videoconference. The advocate arranged for the testimony of a medical expert who provided their opinion on a series of questions posed by the employer’s representative as well as panel members.

Based on the claim file information, WCB policy and the medical opinions offered by a medical expert, the representative provided testimony supporting that the employer is eligible for cost relief per the Cost Relief Policy, Schedule A and Schedule C.

The advocate presented evidence of pre-existing conditions that, when queried, the medical expert stated significantly prolonged the claim and was a significant contributing factor to the re-tear of the rotator cuff following surgery to repair the original injury. They described that the injury was a further separate injury subsequent to the compensable injury.

The May 26, 2017 MRI identified a rotator cuff re-tear and is purported to qualify as a further separate injury under the Further Injuries Policy.

As such, the employer requests 50 percent cost relief of the costs associated with this claim due to the worker's pre-existing conditions which significantly prolonged the claim per policy Schedule A of the Cost Relief Policy.

They also request that all costs associated with the further separate injury of the rotator cuff re-tear be removed from the employer's account per the Cost Relief Policy, Schedule C.

Analysis

The issue on appeal is whether or not the employer is entitled to cost relief. For the panel to grant the employer’s appeal, we must find that the employer's request for cost relief satisfies the requirements of Schedule A and/or Schedule C to the Cost Relief Policy. The panel was unable to draw that conclusion for the reasons outlined below.

For the employer to be eligible for 50% cost relief under Schedule A of the Cost Relief Policy, the worker must have a pre-existing condition that significantly prolonged the claim.

The panel accepts that the worker had a pre-existing degenerative condition in their shoulder and "fatty infiltration" as noted by a WCB Medical Advisor on June 15, 2016. The panel is unable to find that these pre-existing conditions significantly prolonged the claim.

The panel could not identify sufficient medical evidence to conclude that there was a significantly prolonged recovery from the compensable injury. Degenerative changes are acknowledged and recognized by the panel as potentially having some impact on recovery, but, on a balance of probabilities, the panel finds they could not support the suggestion that they significantly prolonged the claim.

For the employer to be eligible for cost relief under Schedule C of the Cost Relief Policy, the panel must find that the worker suffered a further separate injury under the Further Injuries Policy. The panel was unable to make that finding.

The January 18, 2019 opinion of the WCB Physiotherapy Consultant notes the report from the original surgery "documents a large retracted rotator cuff which was technically difficult to repair with apparent poor tissue quality…" The Physiotherapy Consultant does note "range of motion recovery has been near normal post surgery, despite an October 10, 2018 MRI documenting a recurrent right rotator cuff tear.”

During the hearing, the employer's medical expert stated “I cannot establish a causal link between how the osteoarthritis or how the atrophy or how all these changes actually contributed to this, I cannot do that, because we don't have the ability to look at the joint from the first injury right up to the other injury”.

Although the employer advocate suggested a circumstance where a further separate injury could have taken place, the medical records do not provide a causal link to the re-tear that was repaired on December 14, 2017.

The panel was unable to relate the testimony of the employer representative and their medical expert to evidence that would support the employer's entitlement to cost relief.

Based on the evidence before the panel, on a balance of probabilities, the panel finds that the employer is not entitled to cost relief. Therefore, the appeal is denied.

Panel Members

B. Hartley, Presiding Officer
J. Peterson, Commissioner
M. Kernaghan, Commissioner

Recording Secretary, J. Lee

B. Hartley - Presiding Officer
(on behalf of the panel)

Signed at Winnipeg this 7th day of April, 2022