Thursday, July 25, 2013

Carrier owes past benefits despite 3rd party settlement

In Demore v Demore Enterprises, 2013 Mo App. Lexis 834, remanded to Commission by Supreme Court for settlement, SC 93640. (June 2014), claimant received an award for about $91,000 in past medical benefits plus future medical.  The carrier contended that it could take a credit or offset against he award for past benefits because claimant had already received an $80,000 settlement.   The court of appeals affirmed the commission, denying such a credit. 

The Commission construed 287.150 to handle credits differently if the award is limited to past liquidated damages only  or includes past and future damages.  In the second case, a third party settlement applies only to future obligations and excuses an employer's obligation to provide treatment up to the extent of the credit.  At the time of the third party settlement the carrier/employer had not paid any benefits. "By statute and case law, this settlement money is treated as Insurer's "advance payment ... of any future installments of compensation ...."

The court further affirmed that the employer, and not the insurer, has the statutory authority to designate a medical provider.

Many comp cases often involve some degree of future medical exposure either by agreement or by the requirements of Medicare.  In such cases an agreement in the contracts  to "protect subrogation interests" may not reflect the true intent of the parties and best practices should designate how any subrogation applies regarding past obligations.