This month, the Ohio Supreme Court altered the landscape of more than 25 years of workers’ compensation legal precedent in an employer-friendly decision concerning termination of Temporary Total Disability compensation. In its ruling in State ex rel. Dillon v. Indus. Comm.,  Slip Opinion No. 2024-Ohio-744, the Ohio Supreme Court: (1) provided the Ohio Bureau of Workers’ Compensation and self-insured employers with a faster means to terminate Temporary Total Disability compensation after a finding of Maximum Medical Improvement, and (2) allowed the BWC or self-insured employer to seek reimbursement from the injured worker for any overpayments created by the finding of Maximum Medical Improvement. 

Ohio workers’ compensation law can be nebulous and frustrating for employers to understand due to the numerous terms and alphabet soup of acronyms involved just to discuss a workers’ compensation case. To fully understand the significance of the Dillon decision, it is important to take a step back and understand the underlying principles of Temporary Total Disability compensation, Maximum Medical Improvement, and the role of the Industrial Commission of Ohio.  

Temporary Total Disability (TTD) compensation generally

In Ohio, if an injured worker misses more than seven calendar days of work following a work-related injury, he or she may be eligible for payment of Temporary Total Disability (TTD) compensation during his or her recovery period. An injured worker can receive TTD compensation if he or she is restricted from all work activity due to the injury, or if the injured worker is released to return to light duty work but the employer cannot accommodate the injured worker’s restrictions. Once entitled to TTD compensation, the injured worker can continue to receive weekly TTD payments until one of several scenarios occur:

• The injured worker is released to return to work by the treating physician or the injured worker actually returns to work
• The employer offers a valid, light duty job offer within the restrictions given by the treating physician
• The injured worker voluntarily abandons his or her employment or becomes incarcerated
• The injured worker reaches Maximum Medical Improvement

The recent Ohio Supreme Court decision in Dillon focused on terminating TTD compensation after a finding of Maximum Medical Improvement (MMI).  So, what exactly is “MMI”? 

Maximum Medical Improvement (MMI)

As they say, all good (or bad) things must eventually come to an end. In a workers’ compensation claim, an injured worker eventually reaches a point in his or her recovery when their medical condition stabilizes. This point in time is a legal term known as Maximum Medical Improvement (MMI). Essentially, MMI is a “treatment plateau” where no further functional improvement is expected despite continued medical treatment or physical rehabilitation. MMI does not mean that further treatment must stop. An injured worker can continue to receive medical treatment needed to maintain the stability of his or her condition.  However, MMI is a pivotal point in a workers’ compensation claim because after an MMI finding, an injured worker’s TTD compensation must be terminated because the medical condition is no longer temporary in nature. 

Generally speaking, the injured worker’s treating physician determines when the individual has reached MMI. However, the Ohio Bureau of Workers’ Compensation (BWC) and self-insured employers also can obtain medical evidence to make the argument that an injured worker has reached MMI. In Dillon, the court was faced with terminating TTD compensation after an employer obtained a medical report stating that the injured worker had reached MMI.

Case Background

On April 2, 2019, Ms. Dillon sustained a work-related back injury. Ms. Dillon then requested TTD compensation, and in June of 2019, a District Hearing Officer (DHO) of the Industrial Commission issued an order that granted Ms. Dillon TTD compensation secondary to the allowed conditions in her claim. Thereafter, an appeal ensued, and the employer obtained an independent medical opinion dated August 8, 2019 that stated Ms. Dillon had reached MMI.  The employer submitted this report to the Industrial Commission as evidence that Ms. Dillon was no longer entitled to TTD compensation. 

The case proceeded on appeal, and on October 28, 2019, a Staff Hearing Officer (SHO) of the Industrial Commission relied on the employer’s medical report and terminated Ms. Dillon’s TTD compensation retroactively to the date of the August 9, 2019 medical report. This retroactive termination immediately created an overpayment of $5,549.40, since Ms. Dillon continued to receive TTD compensation between the DHO hearing in June of 2019 and the SHO hearing in September of 2019. The Ohio BWC then issued an order seeking to recoup the overpayment, and Ms. Dillon sought a writ of mandamus from the Tenth District Court of Appeals to compel the Industrial Commission to vacate the order that declared an overpayment of TTD compensation.

Case Discussion

In this case, the drawn-out appeals process of the Industrial Commission did not work in Ms. Dillon’s favor. Although a DHO originally granted TTD compensation, the decision was later overturned on appeal before a SHO, therefore Ms. Dillon was no longer entitled to TTD compensation paid after August 8, 2019. To add to Ms. Dillon’s woes, she was also not allowed to retain the previously paid compensation pursuant to R.C. 4123.511(K), which allows the BWC or self-insured employer to recoup overpayments of compensation from future amounts of compensation to which the injured worker may become entitled pursuant to the claim.   

The court noted that R.C. 4123.56(A) does not permit an injured worker to receive TTD compensation after reaching MMI. The court further noted if an employer disputes a physician of record’s opinion concerning MMI, the employer must continue to make TTD payments to the injured worker until the issue is determined following a hearing before the Industrial Commission. Although R.C. 4123.56(A) requires payments to continue “during the determination of the matter,” the court noted the exception that TTD compensation cannot be paid for the period after the injured worker has reached MMI. 

This decision was a departure from previous case law that allowed an injured worker to remain “entitled” to TTD payments until TTD was formally terminated after a hearing before the Industrial Commission. The court overruled the prior case law on the grounds that it ran counter to the plain language of R.C. 4123.511(K) and R.C. 4123.56(A). By applying the plain language of these statutes, the court noted that Ms. Dillon was not entitled to TTD payments made after the MMI finding, and recoupment of the overpaid benefits was proper. 

Impact of Dillon

The Dillon decision now gives Ohio employers an earlier opportunity to seek termination of TTD benefits. Now, an employer can request termination of TTD benefits as soon the date of a medical opinion that states the injured worker has reached MMI. Prior to Dillon, an employer had to wait until after a hearing before the Industrial Commission to terminate TTD compensation. An employer still cannot unilaterally terminate TTD compensation prior to a hearing, however, the employer now has the ability to backdate the MMI finding to the date of the medical opinion, not the Industrial Commission hearing. 

Lost time compensation remains a huge cost factor in workers’ compensation claims, therefore the ability to stop TTD payments weeks or months prior to the date of an Industrial Commission finding is a definite win for Ohio employers.

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