Surety’s Liability For Denied Claims – Medical Benefits Part: 2

By Fred Lewis and George Casper

Here are the facts in the cases previously discussed:

 

• St. Alphonsus Regional Medical Center v. Edmonson – worker’s compensation insurance providers have attempted to pay the contractually agreed they would have paid had they accepted the claimant’s injury initially. They based their argument in the rules of the fee schedule listed in the Commission’s Rules of Administrative Procedure (IDAPA rules). St. Alphonsus v. Edmonson found IDAPA rule 17.02.08.031 provides a rule for “determining acceptable charges provided under the Idaho Workers’ Compensation Law.” The Commission determined this rule did not apply to cases where the employer and their surety have denied liability.

• Neel v. Western Construction – In Neel, the surety initially denied the claim and argued Sangster did not preclude them from auditing the medical bills through their cost containment system and paying the amount required by the IDAPA rule listed above. The claimants responded by filing a motion to order the defendants to pay the full invoiced amount and for attorney fees as well. The Commission sided with the claimant, stating they are obligated to pay benefits to the injured worker and not the medical provider in a previously denied claim. The Commission then asserted the injured worker was the one obligated to pay the medical providers based on the contractual agreement created because the claim was denied. The concluded, “Defendants do not have a right to unilaterally reduce the billing of a medical provider with whom they have no relationship or contractual agreement.”

 

In the Neel case, the surety’s refusal to pay the full invoiced amount resulted in the payment of attorney fees as well. There are many other Idaho Worker Compensation cases that come to the same conclusion as the three listed above. The outcome is simple: medical bills on claims that are initially denied and later found to be compensable by the Industrial Commission (who has exclusive jurisdiction) are to be paid in full by the surety. Attorney fees could also be requested because they may even be awarded as well.

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