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Mark Barrett
ASHEVILLE - Mission Hospital failed to turn over key evidence in Workers' Compensation cases, gave employees blatantly
incorrect information about the law and repeatedly denied benefits without basis, state officials found.
The N.C. Industrial Commission, its deputy commissioners and appellate courts have taken the unusual step of directing
Mission to pay employees' attorney fees as a penalty for the way in which it handled at least six disputes over injuries
to its workers this decade.
Sandra King, a local attorney who represents employers in Workers' Compensation cases, said it is possible that Mission
"has been sanctioned more than any other employer in the state in the past five years."
"This is not usual (for employers) and there's no reason that it ought to be going on," King said. She said the cases
reflect "a long-term situation that needs cleaning up."
Mission's conduct came to light following a Sept. 22 ruling by Deputy Commissioner George Glenn II in which Glenn
referred Mission's handling of a case to the state Department of Insurance and the state attorney general's office.
He ordered that Mission pay the attorney fees of its former employee, Terry Cawthorn, as well as an additional penalty
of 10 percent of the benefits due her because of Mission's "bad faith denial and fraudulent actions."
A spokeswoman for Attorney General Roy Cooper said attorneys at the Department of Justice and Department of Insurance
have been discussing how to handle what she called "an unusual case."
Mission said earlier this week that it had not been contacted by either agency. It is appealing Glenn's decision in the
Cawthorn case.
In a written response to questions from the Citizen-Times, Mission did not directly contradict allegations that it has
deliberately sought to deny valid claims. It has said it welcomes any investigation by the state.
Repeated Problems
Cases in which employees challenge their employers' denial of Workers' Compensation benefits generally go first to
informal mediation under the direction of the Industrial Commission, a state agency.
Either party can then seek a hearing before one of the commission's deputy commissioners, whose status is comparable to
that of an administrative law judge. Appeals from those rulings are heard by panels made up of three members of the
Industrial Commission.
From there, either party can appeal to the state Court of Appeals. Cases occasionally go on from there to the state
Supreme Court.
A review of decisions in disputed cases suggests that Mission does not always play by the rules when handling cases in
which it and the injured employee do not agree. For example:
The statement says that among those incidents, it found 1,094 instances when an employee was injured on the job and
that "only 26 claims or 2.3 percent were determined not to be compensable" under Workers' Compensation rules.
Mission said it has become more common for a deputy commissioner or the Industrial Commissioner to award attorney fees
to the losing party in general and that "the awarding of attorney fees does not necessarily suggest an employer has
acted in bad faith."
David Gantt, a local attorney who has won attorney fees from Mission, said the fees are assessed "not when someone has
fought a case but (when) they've fought them unfairly." Gantt is also chairman of the Buncombe County Board of
Commissioners.
State law says that attorney fees can be assessed if there is a finding that a case "has been brought, prosecuted, or
defended without reasonable ground."
Mission pointed out that officials have sometimes disagreed over whether fees were warranted in its cases. It says that
overall it has won eight cases before the commission since 1995 and lost eight.
The Industrial Commission does not keep statistics on how often attorney fees are awarded. Some attorneys who practice
Workers' Compensation law in the state said losing parties do have to pay attorney fees more often than in the past, but
that it is still rare.
"It is very unusual. It's not unheard of, but you don't see them very often," said Leonard Jernigan, a Raleigh attorney
who represents plaintiffs in Workers' Compensation cases and has written a book on Workers' Compensation law in the state.
Jernigan said he regularly reads appellate cases in the field, and he noted, "I see Mission involved in some litigation
over the years that shows a disturbing pattern."
"It's time someone looked into it. I'm glad a deputy commissioner at least brought it to someone's attention," he said,
referring to the Cawthorn case.
Nick Valaoras, a Charlotte attorney who has represented employers in Workers' Compensation for 18 years, called assessing
the fees "a rare occurrence."
"I probably could count on one hand" the number of his clients who have been so sanctioned, he said.
Referral of a case to the state attorney general is rarer still, he said. "That seems to me to be a very serious next
step."
Thomas Ramer, an Asheville-based attorney who represents Terry Cawthorn, said the statistics Mission offers in its
defense do not explain or excuse its conduct.
"How many cases don't we know about?" he asked. "How many people never file a claim because they were told by Mission
they couldn't?"
The statistics also do not explain the hospital's conduct in cases in which it was sanctioned, Ramer said.
"They've had ample opportunity after each one of these cases to improve their claims handling process for their
employees and they haven't done that," he said.
Below are brief descriptions of the cases that focus on the conduct that deputy commissioners at the N.C. Industrial
Commission, the full Industrial Commission or appellate judges raised concerns about:
The Actual Cases!
Conduct criticized: A Mission official, Mary Silver, denied authorization for payment for drugs "based upon her own
opinion as to whether plaintiff should take such medications as opposed to any opinion rendered by a physician," wrote
Doug Berger, a deputy commissioner for the Industrial Commission.
Silver also denied that she spoke to a physician in the case despite "numerous references" in the physician's notes to
conversations with her, Berger wrote. He wrote that Silver's denial is "not credible."
Berger ordered in October 2002 that Mission's attorney give a copy of the decision to the hospital's president and
provide verification that the president had seen it.
Through a Mission spokesman, Silver declined comment Friday.
Jeanne Chellis
Conduct: Videotape taken by private investigators contracted by Mission showed Chellis "walking, shopping, loading
groceries, driving, ordering and receiving food at drive-thru windows, and getting in and out of her car without
apparent difficulty," Deputy Commissioner Adrian Phillips wrote in April 2004.
Phillips denied Chellis' claim for further compensation, saying she is not permanently and totally disabled.
The full Industrial Commission, however, overturned Phillips' ruling on a 2-1 vote in January 2005 and ordered Mission
to pay Chellis further benefits and her attorney fees and a $5,000 fine payable to the commission.
The turning point was apparently the commission's finding that Mission had withheld videotape taken of Chellis in
November 2002 immediately after she attempted to return to work.
The surveillance video showed Chellis "guarding her left arm" and avoiding use of it, "crying in her vehicle," and
stretching her neck.
The commission said it gave greater weight to the testimony of physicians who had treated Chellis extensively and had
seen the November 2002 videotape.
Sharon Stevens
She was treated for muscle and joint injuries and was later diagnosed as having post-traumatic stress disorder.
Conduct: Mission denied a claim based on Stevens' psychological problems despite the findings of a psychologist
and two psychiatrists, one of whom was employed by Mission for an independent examination.
"There is no competent medical evidence to support" Mission's contention that the December 2000 incident did not cause
Stevens' psychological problems, Deputy Commissioner Bradley Houser wrote in June 2002.
Donna Bradley
This resulted in back problems.
Conduct: Mission refused to mail Bradley's benefit checks to her, requiring her to come to the hospital in person
to pick them up, which Deputy Commissioner Ronnie Rowell wrote is against state law and Industrial Commission rules.
Her attorney eventually got an order from a commission official forcing Mission to mail the checks.
After an initial period, Mission declined to pay Bradley's health care costs, but Rowell wrote that Mission "has offered
no evidence to support their continued refusal to accept this claim."
The Industrial Commission reversed part of Rowell's order regarding attorney fees.
In a December 2006 opinion, the state Court of Appeals ordered Mission to pay some fees.
Mission said in a statement this week that employees do not currently have to pick up their benefit checks in person.
Jane Doe*"
A co-worker saw the aftermath of the attack, and a physician and co-workers later observed bruises.
The attack resulted in psychological problems.
Conduct: Mission did not properly investigate the case, the full commission wrote, and offered only one exhibit,
Doe's job evaluation, during a three-day hearing.
Mission "possessed documents that confirmed plaintiff accounts of the attack, which they refused to make available to
the plaintiff" until compelled to do so, the commission wrote in May 2004.
The state Supreme Court reversed an award of attorney fees to Doe.
The commission and the state Court of Appeals later directed Mission to pay fees to Doe associated with defending
Mission's appeal of benefits to Doe.
*The Citizen-Times does not identify victims of sexual assault.
Inez Hill
Conduct: Mission contended that the fall was due to a seizure, but Deputy Commissioner Kim Ledford wrote that the
hospital "had no medical support" for the allegation.
Mission "effectively ignored and denied (Hill's claim) without sufficient basis, until approximately 11 days prior to
the hearing," Ledford wrote in July 2004.
Mission also "misled this Court" about whether it was paying certain benefits, and its attorney at one point argued that
it could not pay disability compensation because Hill was seeking attorney fees in the case.
Ledford noted in a special commentary that Mission "has been subject to sanctions by three other Deputy Commissioners,
based upon unfounded litigiousness. Although not 'evidence' in this matter, the Defendant's prior behavior shows (a)
pattern and practice of unreasonable defense of these claims and poor responses and conduct regarding injured employees."
Ledford directed that a copy of her ruling be sent to Mission's vice president for human resources.
Terry Cawthorn
Conduct: Mission initially paid benefits but denied them in June 2008.
A hospital employee wrote Cawthorn her claim was being denied because there was no "accident."
Deputy Commissioner George Glenn II found Sept. 22 that Mission said it was unaware of subsequent incidents in which
Cawthorn reinjured her back at work even though the incidents were documented in its records.
Mission's decision to end benefits was "in spite of the overwhelming evidence to the contrary" and statements made to
Cawthorn by a hospital employee "constitute fraud," Glenn wrote.
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