Wednesday, July 29, 2015

Court directs parties to commission to resolve when "open"medical means

State ex rel  ISP Minerals v the Labor and Indus. Relations Commission, No. SC 94478 (Mo. 2015).

                This is a case primarily about two things.  What did the parties mean when they settled a case and agreed to leave medical open and who should interpret the meaning of what is owed  if there is a dispute?  It is in some respects primarily a “contract” case about intent but is important for the procedural warning that employers may be pulled back into the comp system if the contract language is unclear or if the parties dispute what it includes.

                The problem in the first instance arose when the parties settled a case for disability but claimant had ongoing medical issues related to a pulmonary condition and apparently was at risk for silicosis.  To address these concerns, the employer agreed to leave medial “open.”  The employer apparently did not want to pay for inhalers and basically argued that the medical was left only partially open to include monitoring such as scans but not include other things.  It was the employer’s position that when the case was settled that the employee’s only recourse was to sue them in circuit court for specific performance or breach of contact if they didn’t like what was being paid or what was being denied.

                The Supreme Court in oral arguments questioned the narrow interpretation by the employer when it promised to “leave future related medical care open” that it meant to only include monitoring and not a broader array of treatment such as inhalers.  In the case claimant had sought to obtain inhalers, but the employer denied benefits based on a second opinion contrary to the recommendations of the physician they designated in the settlement contracts to provide treatment. 

                The court resolved the dispute based on its statutory interpretation.  Section  287.390.1 did not include language which divested the Division of jurisdiction in these circumstances.  Section 287.801 vested authority to “review” claims of future medical benefits with the commission and appellate courts and not the circuit court. The Division has long established authority to sort out the employer’s obligations for treatment for industrial injuries.  The court noted the issue here was one of interpretation, caused by the contract language itself, and not a matter of enforcement.   If the issue was simply enforcement (an unpaid award, for example), then 287.500 provided a procedural remedy to register and enforce the judgment through circuit court.

                  There may be a drafting lesson here to avoid this type of “buyer’s regret"  by the employer  designating a specific specialist on the contract.  What if the specialist dies or retires and there are no contingencies?  What if the specialist does something unexpected?  Perhaps the drafting lesson is to retain the right to select a physician rather than naming one person without other contingencies for medical management of a claim.  Parties can certainly use additional pages to sort out contingencies rather than the “short hand” method used here.  Defense counsel in oral arguments spent a lot of time describing the word "open" as a term of art in comp.   Parties are free to structure what they will pay for and not pay for, which is becoming necessary in more cases generally because of Medicare involvement in many comp settlements.  The Medicare problem becomes a bigger problem to if  parties in cases agree to leave medical open, acknowledge they are settling in consideration of Medicare's interests, and then refuse to pay for treatment.  The issue of enforcement is often understated in contracts.  Perhaps even if the Division technically retains jurisdiction the parties could designate by contract other means to resolve disputes more quickly when the costs are limited such as various ADR methods.
Atty:  Lindsay, Mogab