In a case of first impression, the Board finds that numerous medical bills were paid properly in accordance with the Fee Schedule and rejects claimant’s argument that the Collateral Source Rule should apply.
This case came before the Board on August 24, 2021, on a remand order from the Superior Court. The case has a very lengthy history, but the essential facts are that the claimant had a work injury on August 31, 2015, with the only acknowledged injury being to his right foot and ankle. Throughout 2016, the claimant sought treatment for his right knee and low back, which were not acknowledged injuries. He also developed a rectal prolapse following lumbar spine surgery in June 2016. Importantly, treatment for the non-work related injuries took place, with numerous out-of-state providers in Pennsylvania who were not certified providers in Delaware. The many medical bills for these treatments were paid through the health insurance of the claimant’s spouse.
Counsel for the claimant eventually filed petitions seeking to expand the compensable work injuries. The Board issued a decision on August 15, 2017, granting the claimant’s DACD petition, finding that meniscal tears in the right knee and the aggravation of a pre-existing lumbar spine condition were compensable injuries. The Board also issued a decision on February 7, 2020, finding that the rectal injury the claimant developed following the lumbar spine surgery was compensable and also that a left knee condition requiring surgery was compensable. The Board determined that the claimant’s alleged erectile dysfunction was not compensable. Importantly, the Board ordered that the medical bills for all of this treatment should be paid in accordance with the Fee Schedule.
Regarding the medical bills, the total amount billed to private health insurance was $226,408.93, and the claimant’s spouse’s health insurance paid $89,290.74. Following the filing of a Huffman suit by the claimant against the employer in July 2020, a settlement was reached pursuant to which the employer paid the sum of $49,820.08, representing the agreed upon Fee Schedule amount owing for those medical bills. The employer also paid additional money to resolve the Huffman claim with no admission of liability.
A separate appeal by the claimant from the Board’s decision of February 7, 2020, to the Superior Court resulted in a remand order issued on November 10, 2020, to address the claimant’s contention that the Collateral Source Rule and 19 Del. C. Section 2322(b) of the Act should remain viable theories of recovery in workers’ compensation law despite the enactment of the Fee Schedule. The Collateral Source Rule is a principle of tort law which essentially provides that when a plaintiff receives payments from a third-party source independent of the tortfeasor, then the quasi-punitive nature of tort law liability allows the plaintiff to receive a double recovery by not counting such payments as a credit against the defendant’s liability.
The Board’s decision following the remand hearing found entirely in favor of the employer and determined that, following the enactment of the Practice Guidelines and Fee Schedule in 2008, it is unlikely that there remains a practical purpose for the application of the Collateral Source Rule in workers’ compensation cases. The Board agreed with the employer’s argument that the Workers’ Compensation Act is a no-fault system whereas the Collateral Source Rule is applied almost exclusively in civil tort cases involving some evidence of wrongdoing.
The Board noted that, while there was a lengthy delay in the payment of medical bills pursuant to the Fee Schedule, neither the employer nor the third-party administrator had ever properly received those medical bills in a “clean claim” format from the providers. The Board concluded that the employer had contested the compensability of those medical expenses in good faith and that the claimant had agreed the amount paid pursuant to the Fee Schedule was correct. However, the claimant was still seeking to have the Board order the employer to pay the amount of $176,588.85, which was the difference between the amount billed to private health insurance less the amount the employer had paid pursuant to the Fee Schedule. The Board rejected that relief and found it to be problematic for many reasons.
The Board pointed out that, given the enactment of the Practice Guidelines and Fee Schedule, it does not appear that applying the Collateral Source Rule of quasi-punitive relief for a claimant is legally allowable since it’s contrary to the specific language of Section 2322B, which states that the recovery of medical expenses is limited to the Fee Schedule, with no exceptions. The Board stated that if they were to grant the relief the claimant was seeking, it would undermine what Section 2322B explicitly states, which is that the maximum allowable amount recoverable for medical expenses against employers is the Fee Schedule amount. The employer had properly paid the numerous medical expenses once they were determined to be compensable in accordance with the Fee Schedule.
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