Saturday, February 16, 2019

Employer’s Liability for Reimbursement of Intervenors


The right to reimbursement  of medical costs to a carrier providing non-occupational disease coverage (an intervenor) for a condition ultimately determined to be occupationally-related, is solely derivative of claimant's right to reimbursement of such expenses under Section 7. Section 7 provides the exclusive means of holding employer liable for medical benefits and contains no provisions granting non-occupational carriers an independent right to reimbursement. As claimant did not comply with the requirements of Section 7(d), the administrative law judge’s finding that the intervenor could not be reimbursed was affirmed Ozene v. Crescent Wharf & Warehouse Co., 19 BRBS 9 (1986). Claimant has no standing to assert Medi-Cal's rights to reimbursement for medical services it provided to claimant. Quintana v. Crescent Wharf & Warehouse Co., 18 BRBS 254 (1986), modified on recon., 19 BRBS 52 (1986). On reconsideration, the Board modified this decision, holding that the administrative law judge erred in not allowing Medi-Cal to intervene to obtain reimbursement of medical expenses. An insurance carrier providing coverage for non-occupational injuries can intervene and recover amounts mistakenly paid for injuries determined to be work-related where claimant is entitled to such expenses. The Board remanded the case to the administrative law judge for a determination as to who should reimburse Medi-Cal. If employer has not yet paid claimant, employer must reimburse Medi-Cal, but if employer has paid claimant, claimant will reimburse Medi-Cal. Quintana v. Crescent Wharf & Warehouse Co., 19 BRBS 52 (1986), modifying on recon. 18 BRBS 254 (1986). The Board rejected claimant's argument that employer owes him for medical bills paid by his private insurers and the state of California for bills paid by Medi-Cal. Claimant may only recover amounts which he himself expended for medical treatment. Nooner v. National Steel & Shipbuilding Co., 19 BRBS 43 (1986). The Board held that employer’s one-sentence “argument” regarding its liability for medical bills paid by a private insurer, which cited a single authority, does not constitute adequate briefing of an issue raised on appeal, as the Board would have to extrapolate the argument and conclusion therefrom. Therefore, the Board held on reconsideration en banc that the panel properly declined to address the issue in its decision. However, for the sake of clarification, the Board stated that employer is liable to claimant for all medical expenses related to the injury paid by claimant and is liable for all medical expenses related to the injury paid by claimant’s private health insurer, provided the private insurer files a request for reimbursement of same. Plappert v. Marine Corps Exchange, 31 BRBS 109 (1997), aff’g on recon. en banc 31 BRBS 13 (1997). The Board held that the administrative law judge erred in concluding that, in general, medical expenses are not properly the subject of a Section 3(e) credit, but the error was



harmless because the administrative law judge correctly recognized that the state's right to reimbursement for claimant's medical expenses is contingent upon claimant's right to medical benefits under the Longshore Act. The State of Washington is entitled to reimbursement from employer for claimant's medical benefits only if the administrative law judge finds on remand that claimant is entitled to medical benefits under the Act. McDougall v. E. P. Paup Co., 21 BRBS 204 (1988), aff'd and modified sub nom. E.P. Paup Co. v. Director, OWCP, 999 F.2d 1341, 27 BRBS 41(CRT) (9th Cir. 1993). The Board held that ILWU-PMA’s Section 17 lien on disability benefits paid to claimants and claim for reimbursement of medical expenses paid must be resolved simultaneously with the settlement agreements entered into by claimants and their employers. As ILWU-PMA intervened in these cases, it is “a party to any claim” pursuant to Section 8(i), and claimants and employers cannot settle claimants’ claims under Section 8(i) without ILWU-PMA’s explicit involvement. Thus, the Board vacated the settlement agreements and remanded the cases for any action necessary to resolve claimants’ claims and ILWU-PMA’s lien and medical reimbursement claims. Section 17 and its implementing regulation, 20 C.F.R. §702.162, establish that ILWU-PMA’s Section 17 lien is limited to amounts it paid to the claimants for disability covered by the Act. Thus, ILWU-PMA’s right to recoup the medical expenses it paid on behalf of the claimants is outside the scope of its Section 17 lien. Any right to reimbursement of medical benefits that ILWU-PMA possesses comes within Section 7 of the Act and is derivative of claimants’ rights to medical benefits, although, pursuant to Section 7(d)(3), ILWU-PMA may seek an award for the benefits it paid on claimant’s behalf. M.K. [Kellstrom] v. California United Terminals, 43 BRBS 1, aff’d on recon., 43 BRBS 115 (2009). On reconsideration, the Board reiterates that since ILWU-PMA’s claims for reimbursement of medical benefits are derivative of claimants’ claims for medical benefits, ILWU-PMA’s claims must be resolved simultaneously with claimants’ claims. If employers and claimants were permitted to settle the claim for medical benefits without ILWU-PMA’s participation, employers’ liability for medical benefits would be extinguished and the Plan would be without recourse. Thus, the Board properly held that since the settlements in these cases infringe on ILWU-PMA’s derivative right to reimbursement of medical benefits, they must be vacated. M.K. [Kellstrom] v. California United Terminals, 43 BRBS 115, aff’g on recon. 43 BRBS 1 (2009). At the Director’s urging, the Board clarified its holding to reflect that only those parties with a financial interest in the claim must have their rights resolved simultaneously with the rights of the other parties whose financial interests are also at stake. In these cases, ILWU-PMA has, via its valid Section 17 liens, a financial interest in the disability aspect of the settlements in these cases. As for medical benefits, ILWU-PMA’s financial interests, premised on its Section 7(d)(3) reimbursement claims, arose because the settlement agreements included releases for past medical benefits. Thus, the Board




reiterated that claimants and employers cannot settle claimants’ disability and past medical benefits claims without ILWU-PMA’s agreement. The Board stated, however, that the parties could settle any claims for future medical benefits without the Plan’s participation as it has no financial interest in such claims. M.K. [Kellstrom] v. California United Terminals, 43 BRBS 115, aff’g on recon. 43 BRBS 1 (2009).

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