Update: NC High Court Strikes Down Compensability of Weight-Loss Surgery

The North Carolina Supreme Court has undone rulings by an appeals court and the state’s Industrial Commission that had granted workers’ compensation insurance payments for a woman’s weight-loss surgery.

And in doing that, the high court formally adopted a multi-factor test – informally referenced for decades but not always adhered to – that should now be used to determine if a medical condition is directly related to a workplace injury.

“Because the lower courts did not apply the proper legal standard in this case, we reverse the decision of the Court of Appeals and remand with instructions to remand the matter to the Industrial Commission for further proceedings,” the Supreme Court wrote.

Robin Kluttz-Ellison, owner of Noah’s Playloft, a preschool in Salisbury, had sustained a number of injuries on the job, including a knee problem from a fall off a ladder. But before she could safely have knee surgery, Kluttz-Ellison needed to lose a considerable amount of weight, her doctors said. Stomach bypass surgery was deemed to be the best option.

The Industrial Commission in 2021 found that the surgery was compensable. The North Carolina Court of Appeals in 2022 agreed.

But the high court said last week that covering the surgery would push North Carolina’s workers’ comp system into the realm of general health insurance. The “directly related” test, advanced by a 1996 state appeals court decision in Pittman vs. Thomas & Howard, asks if a health condition was: caused by the workplace injury; was aggravated by the workplace injury; or did not require treatment before the injury but now needs treatment solely related to the injury.

If the answer to any of those is “yes,” then the treatment in question is considered compensable, the justices said.

But for Kluttz-Ellison, the bariatric surgery did not check any of the boxes. And the appeals court and the Industrial Commission failed to apply the test, the high court found.

“The Commission’s opinion and award examined only whether the bariatric surgery (the treatment) was ‘medically necessary’ to achieve the requisite weight loss to undergo knee surgery,” the March 22 opinion reads. “The Commission did not make any findings or conclusions concerning the causal relationship between plaintiff’s body weight issues (the condition) and the workplace injury.”

Likewise, the appellate judges focused on the treatment, not the condition.

A causal relationship between a condition and a work injury is vital to maintaining the workers’ comp system, Justice Richard Dietz wrote for the Supreme Court.

“Because the ‘rule of causal relation is the very sheet anchor’ of workers’ compensation, an award of medical compensation requires a showing that the condition being treated is causally tied to the workplace injury,” Dietz wrote.

Simply put, “if there is no causal connection between a workplace injury and a preexisting condition, forcing the employer to pay for treatment of that preexisting condition makes the employer responsible not for the consequences of a workplace accident but for an employee’s general health and well-being,” the opinion noted. “That is not workers’ compensation; that is health insurance.”

Justices Allison Riggs and Anita Earls strongly dissented.

Riggs wrote that the three-part causality test is too narrow and will now bar some necessary health treatments. Also, the North Carolina workers’ comp statute requires that medical compensation cover services that “may reasonably be required to effect a cure or give relief and for such additional time as, in the judgment of the [Industrial] Commission, will tend to lessen the period of disability.”

“An unflinching and uniform test crafted by nonexpert appellate jurists seems all but guaranteed to end up excluding some unforeseen claims—whether due to lapses in our knowledge or imaginations— that fairly fall within the language and intent of the Act,” Riggs wrote.

Update: An earlier version of this article erroneously referred to Georgia’s workers’ compensation system.

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