Plaintiff Robin Kluttz-Ellison was the owner of Noah’s Playloft, a preschool in Salisbury, North Carolina.  She had a pre-existing history of right knee problems and had a right knee arthroplasty before her alleged workplace accidents.  She had also struggled with body weight issues for many years and had received medical treatment designed to help her lose weight.  She had two workplace accidents where she alleged to have injured her right knee.  The physicians treating her right knee recommended additional surgery but before they would consider performing such surgery, Plaintiff needed to lose a considerable amount of weight.  Her medical providers thought the only available treatment for this weight loss was gastric bypass surgery.  The key issue presented to the Industrial Commission, and ultimately to the North Carolina appellate courts, was whether Defendant Employer and Insurer were responsible for payment for the gastric bypass surgery as part of the workers’ compensation claim involving the right knee.  The Deputy Commissioner originally denied the additional knee surgery was causally related to her workplace accidents and also denied the request for payment for the gastric bypass surgery.  Plaintiff appealed to the Full Commission, which ultimately ruled the right knee surgery was related to the workplace accidents and the gastric bypass surgery was medically necessary to allow Plaintiff to undergo the required knee surgery so Defendants were ordered to pay for both medical treatments.

Defendants appealed to the Court of Appeals and in the decision Kluttz-Ellison v. Noah’s Playloft Preschool, 283 N.C. App. 198 (2022), a unanimous Court of Appeals affirmed the Full Commission decision.  In its opinion, the Court concluded that while Plaintiff’s weight problem was not directly related to her workplace accident and resulting right knee injuries, the need for medical treatment for the weight problem (gastric bypass surgery) was directly related to the right knee injury claim because she could not receive treatment for her right knee until she received the treatment to address her weight problem.  The Supreme Court granted Defendants’ Petition for Discretionary Review.

Causation—The “Sheet Anchor” of the Workers’ Compensation Act

In reversing the Court of Appeals decision, the Supreme Court first emphasized the critical requirement of having a causal relationship between a workplace accident and an employee’s injuries because the Worker’s Compensation Act was never designed to be a general accident and health insurance policy (citing Weaver v. Swedish Imports Maintenance Inc., 319 N.C. 243 (1987).  Instead, the necessity of establishing a causal relationship between workplace accidents and resulting injuries is the “sheet anchor” or foundational element of the Act which keeps it within its intended scope of providing compensation benefits to injured workers and not providing general health insurance coverage.  Included in this causation requirement is “Medical Compensation” which is defined in N.C.G.S. 97-2(19) as medical or rehabilitative services as may be reasonably required to effect a cure or give relief and tend to lessen the period of disability.   

Specifically, the Supreme Court held that there must be a causal relationship between the condition to be treated and the workplace injury.  Using the “Directly Related” test, an employee may receive medical compensation for specific treatment only if that treatment is “directly related” to the workplace injury (i.e., a causal relationship between the condition that requires the treatment and the workplace injury).  An employee may satisfy the “Directly Related” test in one of three ways:

  1. By showing the workplace injury caused the condition for which treatment is sought;
  2. By showing the workplace injury materially aggravates the condition or causes new symptoms; OR
  3. By showing the workplace injury has triggered the need for medical treatment of the condition to aid in the treatment of the workplace injury. 

If any of these three criteria are met, the medical treatment is directly related to the workplace injury and is compensable.   

In applying this test to the facts of the case, the Supreme Court noted the Industrial Commission examined only whether the medical treatment (gastric bypass surgery) was medically necessary to achieve the weight loss goals for Plaintiff to undergo the required knee surgery. The Commission failed to make any findings or conclusions concerning any causal relationship between the Plaintiff’s body weight issue and the workplace injury.  The Court of Appeals made the same error, focusing on the necessity of the medical treatment (gastric bypass surgery) to treat the knee injury and not determining whether there was a causal connection between the bariatric condition and the workplace injury.   In sum, the workplace injury did not cause or materially aggravate the bariatric condition or trigger the need for gastric bypass surgery. 

Dissent—Just Look to the Act

In a seven-and-a-half page dissenting opinion, Justice Riggs (joined by Justice Earls) criticized the majority for creating a three-step causation test that is not compelled by the plain statutory text defining “Medical Compensation” in N.C.G.S. 97-2(19).  Applying the straightforward definition of Medical Compensation found in the statute, the dissent concluded that if an authorized doctor believes the recommended treatment is necessary to effect a cure or give relief of a workplace injury, then that treatment is compensable.  By adding this “Directly Related” test to the existing statutory definition of Medical Compensation, the majority unnecessarily added to the meaning term Medical Compensation and the effect would also limit the Commission’s ability to rely upon the expertise of medical professionals in unique circumstances.  Moreover, allowing for coverage of the gastric bypass surgery in this case would not be tantamount to the employer providing general health insurance for the Plaintiff.  Instead, Defendants paying for weight loss treatment under the workers’ compensation claim for the purpose of effecting a cure, giving relief, or lessening the period of disability of the knee injury would achieve the stated goals of the N.C. Workers’ Compensation Act.

Practical Implications and Applications

By creating a causal connection test between the original workplace injury and the specific medical treatment being recommended, the employee must show more than mere medical necessity of the treatment to aid in the overall treatment of the compensable injury/condition.  The employee must also show a distinct causal connection between the compensable injury and the medical condition in need of treatment. 

What are the potential implications of this decision?  Consider a scenario similar to that illustrated in Kluttz.  An employee has a compensable lumbar spine injury and has been recommended for spinal fusion surgery by his authorized treating neurosurgeon.  However, before the fusion can proceed, the neurosurgeon has recommended that testing and treatments for an asymptomatic, pre-existing, and causally unrelated cardiac condition be completed to ensure the fusion surgery can be safely performed.  Applying the new Kluttz test, Defendants could justifiably deny such cardiac treatment under the workers’ compensation claim.  If the Plaintiff has the means to pay for such unrelated cardiac treatment through private health insurance or some other secondary source, perhaps he can utilize these sources to receive the treatment and not unreasonably delay the fusion surgery.  This would keep the claim on track for return-to-work opportunities or other claim resolution options.   However, if the Plaintiff does not have the means to pay for such cardiac treatment, this could prevent the necessary fusion surgery from taking place.  The compensable medical treatment would be put on hold, thereby delaying Plaintiff’s ability to return to work, with weekly disability payments continuing. 

Another approach Defendants could consider would be authorization of limited or specific “unrelated” treatments without prejudice if this creates a potential path to allow the workers’ compensation claim to move forward.  Defendants taking such an approach should make it clear that payment for such treatments is being made without prejudice, is limited to those specifically identified treatments only, and does not amount to any admission of liability of the personal, non-work-related underlying medical conditions.  Filing a supplemental Form 61 concerning the personal, non-work-related underlying medical conditions and setting forth such terms may be appropriate.

To be clear, the Kluttz decision does not address the question of whether Defendants can terminate or suspend weekly indemnity compensation if the Plaintiff cannot satisfy the “Directly Related” test for medical treatment.   Based on other established legal principles, it is not anticipated or likely Defendants would be permitted to suspend weekly indemnity compensation in this type of scenario.  Kluttz should only be read to apply to medical compensation and not wage or indemnity compensation.

Ultimately, the majority decision in Kluttz could trigger the desire on the part of both Plaintiffs and Defendants to discuss a compromise settlement to resolve the different potential scenarios highlighted above.  The impact of this decision on future claims handling certainly bears watching.