Idaho Law Blog
By Fred Lewis and George Casper
As we have touched on in previous entries, there are times when an injured worker’s claim for worker’s compensation benefits is denied by the employer’s insurance company (hereafter referred to as “surety”). Many injured employees (hereafter referred to as “claimants”) wonder why the surety would deny their claim because the facts all seem to point to the acceptance to the claim. As with many things in life, the surety’s decision to deny most compensation claims boils down to one word: money.
Worker’s compensation sureties normally receive contractual discounts on the price of medical procedures. However, the discounts given to a claimant or a claimant’s personal insurance are far greater than the discounts given to a surety. Knowing this fact, worker’s compensation insurance companies or sureties will be tempted to deny the claim initially. They understand it will likely be found compensable by the Industrial Commission. The sureties will then come back years or months into the case and attempt to compensate injured workers by settling for a compromised amount based on the contractually adjusted amount the claimant’s insurance company makes with the medical provider. There are many previous cases that plainly state sureties cannot use this tactic and must pay the full invoiced amount (more than their contractual agreement amount if they accepted the game at first) of a medical procedure if they deny the claim. We will highlight three: Sangster v. Potlatch Corporation, IC -01-008322 (2004), St. Alphonsus Regional Medical Center v. Edmonson, 130 Idaho 108, 111, 937 P.2d 420, 423 (1997), and Neel v. Western Construction, 147 Idaho 146(2009)
- Sangster v. Potlatch Corporation – found that the surety is required to pay the full invoiced amount on medical expenses if they initially deny a claim the Industrial Commission later found to be compensable.
- 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 and Idaho Supreme Court 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 and Idaho Supreme Court 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 Idaho Supreme Court 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 should also be requested because they will likely be awarded as well.
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