Opinion ID: 867617
Heading Depth: 2
Heading Rank: 2

Heading: Olsen v. City & Borough of Juneau

Text: Calli Olsen worked as a wastewater utility operator for the City and Borough of Juneau (CBJ). According to the Board’s decision in her case, she filed reports of injury for two different injuries, one to her right knee in May 2009 and one to her lower back and right leg in September 2009. After a hearing the Board found that her knee injury, but not her back and leg injury, was compensable, and it ordered CBJ to pay for completion of a specific medical treatment (autologous chondrocyte implantation) as well as past medical care related to the right knee.2 The Board denied other claims she made and deferred ruling on PPI because she was not yet medically stable. CBJ appealed to the Commission and asked for a stay of future medical benefits. CBJ’s motion for stay argued that it was probable that the merits of the appeal would be decided adversely to Olsen. CBJ contended that because Olsen’s claim was an aggravation claim and because the statutory standard had changed from “a substantial factor” to “the substantial cause,” the Board had evaluated the claim using the incorrect standard. Olsen countered that the Board had properly evaluated the claim. In an affidavit filed with her opposition, Olsen stated that she had undergone the first part of 2 Autologous chondrocyte implantation is a two-part medical procedure in which a small amount of cartilage is first removed from the knee in an arthroscopic procedure. The tissue is sent to a lab, which grows more of the patient’s cells. The lab initially freezes the tissue and does not begin the culturing process until after “all the paperwork for insurance has been done.” After growing a sufficient number of cells, the lab ships them back for implantation in the patient. The second surgery is an open procedure in which the cells are placed under a membrane patch. According to Olsen’s surgeon, the procedure is generally successful and avoids the need for knee replacement surgery. Olsen had completed the first part of the procedure before the Board hearing. -4- 6780 the implantation procedure in June 2010 and had no funds to pay for the second surgery; she further stated that she was “not able to find suitable work in [her] field due to [her] injury.”3 At the hearing on the stay, the Commission directed the parties to address which regulatory standard for a stay applied. At the time of the hearing, the Commission’s regulation about stays on appeal contained two standards depending on the type of benefit at issue. To stay “continuing future periodic compensation payments” the appellant was required to demonstrate irreparable damage and “the existence of the probability that the merits of the appeal [would] be decided adversely to the compensation recipient”; for “lump-sum payments” the appellant had to show irreparable damage and “the existence of serious and substantial questions going to the merits of the case.”4 CBJ said it would suffer irreparable damage without the stay because it would have no way to recoup the payments if it were to win on appeal. CBJ argued that the benefits at issue were not continuing future periodic compensation payments, so the serious and substantial question standard should apply. Olsen argued that CBJ was required to show a probability of success on the merits; she told the Commission that no case had expressly decided whether future medical benefits were “continuing future periodic compensation payments.” The Commission granted the stay, using the serious and substantial question test to evaluate the request. The Commission found that CBJ had no way of recovering payment for the medical treatment if CBJ won the appeal, and it decided that CBJ had 3 Olsen was still working for CBJ at the time of the first surgery, but the workers’ compensation carrier did not pay for it. Her employment with CBJ ended in July 2010. 4 8 Alaska Administrative Code (AAC) 57.100(d)-(e) (am. 3/24/12). -5- 6780 raised a serious and substantial question, specifically how “the statutory standard for compensability . . . requiring that employment be the substantial cause of the need for medical treatment . . . appl[ied] in the context of [Olsen’s] case.” The Commission did not consider whether CBJ had shown the existence of the probability the merits of the appeal would be decided adversely to Olsen. Olsen then moved for reconsideration, arguing that the probability of success on the merits was the appropriate standard. She further contended that medical benefits could not be stayed at all if the Commission interpreted “compensation” as excluding medical benefits. The Commission responded to Olsen’s motion by explaining that it interpreted AS 23.30.125(c) as “restating the criterion in Olsen [Logging Co. v. Lawson5] for stays of ongoing periodic disability payments on which an employee relies as a salary substitute.” The Commission also quoted the standard for lump sum payments from Olsen Logging and said that whether Olsen’s implantation procedure would be paid incrementally or [as] a lump sum was not the critical consideration . . . . The compensation is clearly not ongoing periodic disability payments on which Olsen would rely as a salary substitute. . . . [T]he compensation, in terms of the language in AS 23.30.125(c), is not continuing future periodic compensation payments. Olsen petitioned for review of the stay decision. We granted review of both petitions and consolidated the cases for oral argument and decision.