Month: March 2013

Carrier Prevails in Medical Bill Dispute

In the absence of a reimbursement agreement with the medical provider, workers’ compensation carriers in Virginia are required to pay medical providers according to the prevailing community rate as provided by Va. Code Section 65.2-605 and Rule 14 of the Virginia Workers’ Comensation Commission Rule 14.  In a dispute, the carrier bears the burden of establishing that the charges do not meet the community standard.  This is a difficult burden that often requires reliance on statistical experts and the existence of accurate and up-to-date rate databases that correspond to the community in question.  A recent decision out of the Virginia Worker’s Compensation Commission, Hill v. VDOT-NOVA District Management, JCN 2099265 (Feb. 1, 2013), indicates that such complicated statistical data may no longer be necessary for a carrier to prevail in a provider fee dispute.

In Hill, the carrier successfully defended a provider’s reimbursement claim using the testimony of a doctor from the same area of Northern Virginia who practiced in the same specialty field as the claimant’s provider.  In 2008, the claimant’s neurosurgeon performed a fusion surgery on the claimant with the assistance of a physician’s assistant.  The medical provider’s office then billed the physician’s assistant’s work to the carrier at 95% of the surgeon’s rate (more than $20,000).  The carrier paid only a portion of the bill on the grounds that the physician’s assistant’s charges exceeded the usual, customary, and reasonable rate for the community.  The provider filed a claim for the balance of the bill.

The carrier hired another neurosurgeon from the area to review the disputed charges.  In his deposition, the carrier’s neurosurgeon testified that 20% was the upper limit of charges for physician’s assistant’s based upon his inquiries with the majority of other medical practices in the area.  Noteably, the carrier’s neurosurgeon admitted that had no statistical date samples to support his conclusion. The Commission acknowledged that while the prevailing rate typically has been established through expert statistical analysis, “we have never held that this was the only manner in which the prevailing community rate could be ascertained.”  The Hill decision shows that a doctor’s testimony may be used to successfully defend a medical provider claim where the doctor has significant knowledge regarding the prevailing rate in the community for similiar proceedures and fully explains the basis for that knowledge.

U.S. Supreme Court – A Houseboat is not a Vessel

The Supreme Court recently issued an opinion that may have the effect of permitting more injured workers to fall within the realm of the Longshore and HarborWorkers Compensation Act (the “ Longshore Act”) but excluding them from the Jones Act. In Lozman v. City of RivieraBeach, the Court further addressed the issue of whether or not a particular structure is a “vessel.”

The opinion involved a houseboat that had no independent source of electricity, no steering mechanism and had French doors and ordinary windows (as opposed to watertight portholes). The Court stated “in our view a structure does not fall within the scope of this statutory phrase unless a reasonable observer, looking to the home’s physical characteristics and activities, would consider it designed to a practical degree for carrying people or things over water.”  The Court, therefore, found the home not to be a vessel.

The issue in Lozman was whether admiralty jurisdiction was proper. Therefore, the decision may impact whether a worker is covered under the Longshore Act.  If a worker is not a Jones Act “seaman,” he or she is likely protected under the Longshore Act.  If, because of this case, certain workers are not Jones Act seaman because the structures they work on are not “vessels,” the Longshore Act will expand to cover those workers.

This case acts to limit what constitutes a vessel, which could take some workers out of Jones Act coverage.  The Court stated that if the structure in question, is used to transport people or things over water, it is a vessel.  The “reasonable observer” test stated in Lozman creates a practical approach to look at borderline cases and does away with the “anything that floats is a vessel” approach taken by some jurisdictions.  At present, the case may only directly affect those workers on house boats or floating restaurants or businesses.  However, it remains to be seen how individual jurisdictions will use the Lozman case’s definition of “vessel” to—perhaps unintentionally—include more workers under the Longshore Act.

Rebound in Construction Activity?

Authored by attorney George M. Nicholos

The Architecture Billings Index for February of 2013 indicates a continued strong pace in design activity in architectural firms and suggests an oncoming jump in nonresidential construction spending during the second half of this year. The Architecture Billings Index (ABI) is a composite index derived from monthly report surveys from member firms located throughout the country regarding “work-on-the-boards,” and is compiled by the American Institute of Architects Economics & Research Group. Using a first-hand survey index from architectural firms, the ABI Index serves as a leading economic indicator of nonresidential construction activity and provides a glimpse of nonresidential construction activity approximately 9-12 months into the future or the typical time frame for a project to progress from design development to construction.

As of February 2013, the ABI recorded the strongest growth in billings reported at architecture firms since the downturn in construction activity began in early 2008. For each of the past five months ABI index scores in all regions of the country indicate a broad based recovery in design activity that appears to have survived the recent uncertainty surrounding the federal budget, although questions remain regarding the impact from sequestration. However, the significance of the present ABI Index indicators are punctuated by the fact that index ratings prior to the present resurging trend vacillated at or below levels which indicate stagnate or declining activity levels. According to the AIA Economics & Research Group and the ABI Index, based on the current trend prospects remain for continued steady growth in the construction industry for the remainder of 2013 although both the architecture and engineering industry as well as the construction industry still have a long way to go to get back to typical levels of construction activity seen during the last decade.

These articles are meant to bring awareness to these topics and are not intended to be used as legal advice.

New Federal I-9 Form Required After May 7, 2013

The Department of Homeland Security published a new form for verifying employment eligability that is applicable to all U.S. business. Vandeventer Black’s Mara Mijal offers this summary of the change:

On March 8, 2013, U.S. Citizenship and Immigration Services (USCIS) published a revised Employment Eligibility Verification Form I-9 for use. All employers are required to complete a Form I-9 for each employee hired in the United States. Improvements to the new Form I-9 include new fields, reformatting to reduce errors, and clearer instructions to both employees and employers.
As of March 8, 2013, employers should begin using the newly revised Form I-9 for all new hires and reverifications. Employers may continue to use previously accepted revisions until May 7, 2013; however, after May 7, 2013, employers must only use the new Form I-9. Employers should not complete a new Form I-9 for current employees if a properly completed Form I-9 is already on file.

The revised Form I-9 is available online by Clicking Here.

For more information about this, here is Mara’s contact information:

Mara S. Mijal
Immigration Law Group
Vandeventer Black LLP
101 West Main Street
500 World Trade Center
Norfolk, VA 23510
tel 757-446-8600
fax 757-446-8670

County Claims: Don’t Forget the Notice of Appeal and Bond

Claims against County’s have their own statutory requirements in Virginia, including the requirement in Virginia Code Sec. 15.2-1246 that claimants both provide a written notice of appeal and a bond to be filed with the clerk respecting appeal of any money claims against the county.

Recently, the Virginia Supreme Court reversed a judgment because the appellants filed a document with the county called “Appeal Bond”, but nowhere in that document indicated it as notice of intent to appeal their claim. While the dissent argued this was form over substance, the majority of the court disagreed. That decision is County of Albermarle v. Camirand, No. 120711, decided Feb. 28, 2013.

What impact does that have on me you might ask? Well, if you do procurement work for a county you have the same statutory requirement. Even though your contract is under the Virginia Public Procurement Act, and even though that act has its own disputes resolution statute, and many contracts have their own disputes resolution statute as is allowed by the VPPA; you ignore Virginia Code Sec. 15.2-1246 at your peril.

In its Jan. 16, 2009 decision in Viking Enterprise, Inc. v. County of Chesterfield, Record No. 080215, the Virginia Supreme Court noted that while the VPPA applies to how claims are initially presented to the public body, it is not inconsistent with Sec. 15.2-1246’s requirements respecting how suits against counties are to be brought, and so both apply.

Therefore, the failure to have complied with Sec. 15.2-1246, and to allege allege compliance in the complaint, are fatal jurisdictional defects.

We Won the Contract, But Then Discovered a Mistake in our Bid. Now What?

Authored by attorney Anthony J. Mazzeo

The euphoria you feel upon being notified by a contracting officer that your company has been awarded a federal contract on which you recently bid can quickly turn to dread if you discover that a mistake caused you to underbid the work. Being bound to a contract based on a mistaken bid can spell big trouble for most companies. The general rule is that a bidder bears the consequences of a mistake in its bid unless the contracting officer has actual or constructive notice of the mistake prior to award. Fortunately, the Federal Acquisition Regulations contains several provisions that allow for correction of some mistakes.

After opening sealed bids, contracting officers are obligated to examine the bids for mistakes and, if a mistake is suspected, to request verification of the bid. In some cases a mistake will be apparent, such as misplacement of a decimal point or mistakes in unit designations (e.g., cubic yards for cubic feet). Other mistakes, such as failure to include a part of the work in the bid may be less obvious. In some cases, a bid price that appears unreasonably low in comparison to other bids could indicate an error. One key factor in the ability to have the bid modified or the award rescinded is when the mistake is discovered.

Mistakes identified before contract award are the easiest to correct. Apparent mistakes in a bid can be corrected by the contracting officer after obtaining verification from the bidder. Other mistakes alleged by the bidder prior to award may be corrected or the bid withdrawn if the bidder can provide clear and convincing evidence that a mistake was made and of the bid properly intended.

When mistakes are alleged after an award, correction becomes more difficult. Correction will be permitted if it will be favorable to the government or when the mistake is proven by clear and convincing evidence and the mistake was so apparent that the contracting officer had constructive notice. A bidder’s allegation that it is entitled to rescission or reformation of its contract in order to correct or mitigate the effect of a mistake is submitted as a claim under the Contracts Dispute Act. The mistake must generally be a clear-cut clerical or computation error, or misreading of specifications. Awards will not be modified or rescinded for a bidder’s mistake of judgment

The bottom line is that, while there are mechanisms that may allow for correction or withdrawal of an award, all contractors need to be meticulous in preparing and submitting bids, to prevent the possibility of being held to a price based upon a unilateral mistake.

These articles are meant to bring awareness to these topics and are not intended to be used as legal advice.

Careful what you say: it may be actionable defamation

The Virginia Supreme Court recently held that a contractor could sue a competitor for defamation for asserting to the plaintiff contractor’s client that the plaintiff contractor told the competitor he as going to “screw” the client. The lower court had dismissed the defamation claim, concluding that competitor’s statements were opinion.

The Virginia Supreme Court reversed, holding that under the specific facts the competitor’s statement was one of fact, not mere opinion. The case is Tharpe v. J. Harman Saunders, No. 120985, Feb. 28, 2013. Bottom-line: be careful what you say about your competitors; it just might be actionable defamation.

I Would’ve Offered Light Duty, But I Fired Him . . .

As a result of the 2009 decision by the Virginia Court of Appeals in Shenandoah Motors, Inc. v. Smith, 53 Va. App. 375, 672 S.E.2d 127 (2009), the framework for challenging claims to post-termination partial disability benefits changed significantly. It used to be the case that in order to bar a claim to post-termination partial disability benefits, the employer was required to show the following:

(1)        that the employer made a bona fide job offer suitable to the employee’s capacity,

(2)        that the employer procured a job offer for the employee, and

(3)        that the employee unjustifiably refused to accept the job offer.

The court’s ruling in Shenandoah Motors amends the first requirement to allow an employer to effectively challenge a claim to post-termination partial disability benefits by showing that the employer would havemade selective employment available during the post-termination period of the employee’s partial disability but for the employee’s termination for cause from full-duty employment after suffering a compensable injury.

In other words, an employer may now bar a claim to post-termination partial disability benefits by establishing constructive refusal of selective employment by the employee—i.e., that the employee’s post-injury amounted to refusal of an offer of selective employment, even in the absence of an actual bona fide offer of selective employment by the employer.

An employer may establish constructive refusal of selective employment by showing that it would have offered the employee suitable selective employment but for the employee’s termination for cause. InShenandoah Motors, uncontradicted testimony stating that an offer of light-duty employment would have been made had the employee not been previously terminated for cause while working full-duty was sufficient for showing constructive refusal of selective employment. Still, the court noted that when challenging a claim to post-termination partial disability benefits based on an employee’s constructive refusal of selective employment, the employer must persuade the Virginia Workers’ Compensation Commission with a preponderance of the evidence that the employee’s actions amounted to constructive refusal of selective employment, even though the employer never made an actual bona fide offer of selective employment.

Employers may preemptively bolster their abilities to challenge claims to post-termination partial disability benefits based on constructive refusal of selective employment by notifying all employees of the availability of light-duty employment in the event of an injury, and of the requirements and protocol for requesting such employment. Employers might additionally remind all injured employees of the availability of light-duty employment. Such policies will likely strengthen employers’ claims, when challenging claims to post-termination partial disability benefits based on an employee’s constructive refusal of selective employment, that light-duty employment would have been made available but for the employee’s termination for cause.

New Restrictions on Mechanic’s Lien in Virginia

Authored by attorney James R. Harvey

The 2013 Virginia General Assembly passed a new law further complicating Virginia’s mechanic’s lien laws. The bill, which passed with wide support in the House of Delegates and Senate amends Va. Code §43-3 to now prohibit liens by those without a valid Virginia contractor’s license. “A person who performs labor without a valid license or certificate issued by the Board for Contractors, … or without the proper class of license for the value of the work to be performed, when such a license or certificate is required by law for the labor performed shall not be entitled to a lien pursuant to this section.” Importantly, the Memorandum for Mechanic’s Lien has now been changed so that “the memorandum shall also contain the claimant’s license or certificate number issued by the Board of Contractors, … if any, and the date such license or certificate was issued and the date such license or certificate expires.

This new law raises many issues:

  • What if I am not required to have a contractor’s license?
    Material and equipment suppliers, and certain specialty trades such as painters may not be required to obtain a Virginia Contractor’s license, and they must now certify on the Memorandum of mechanic’s lien “that such a valid license or certificate is not required by law for the work done for which the benefit of a lien is claimed.”
  • What if the Contractor makes a mistake in identifying its license?
    An inaccuracy in the memorandum as to the claimant’s license or certificate number, if any, the date such license or certificate was issued, or the date such license or certificate expires shall not bar a person from perfecting a lien if the claimant can otherwise be reasonably identified in the records of the Board for Contractors.” It is unknown if an “inaccuracy” includes a duly licensed contractor who fails to include any reference to its contractor’s license number on the memorandum. An individual in your organization that holds your contractor’s license may not suffice to identify your company with the Board of Contractors.
  • Could this cause a conflict with other laws?
    Virginia Code §54.1-1115 is an existing statute that already dealt with the impact of claims by unlicensed contractors. It provides a civil penalty for performing work without a license, and states that “No person shall be entitled to assert the lack of licensure or certification as required by this chapter as a defense to any action at law or suit in equity if the party who seeks to recover from such person gives substantial performance within the terms of the contract in good faith and without actual knowledge that a license or certificate was required by this chapter to perform the work for which he seeks to recover payment.” In the past, courts held a hearing in mechanic’s lien cases of unlicensed contractors to determine if this statute applied. Now, it remains unknown how this statute will interact with the changes to the mechanic’s lien statute.
  • Is it me or are mechanic’s lien confusing?
    No, mechanic’s liens are a trap for the unwary. This law just adds more complications to the process.These articles are meant to bring awareness to these topics and are not intended to be used as legal advice.
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