Work-related medical expenses are not payable directly to claimant when a health care carrier’s subrogation lien is established by the parties prior to the Judge’s decision.

A Workers’ Compensation Judge granted a claim petition for an injury sustained by the claimant while working for the employer, awarding ongoing total disability benefits and payment of medical expenses.

Claimant’s counsel later submitted a subrogation lien from the claimant’s personal health care insurer (Company A) for payment of medical expenses. The claimant then filed a penalty petition against the employer for failure to pay the January 2009 award in a timely and accurate manner. The claimant submitted to documentation regarding Company A’s subrogation lien. The Judge granted the penalty petition and directed the employer to pay the medical expenses to the “health care provider,” less a 20% counsel fee.

On appeal to the Appeal Board, the claimant argued that the amount incurred in medical expenses plus interest should be paid directly to the claimant. The Board remanded the case to the Judge on this issue, and the Judge found that the submission of an October 2008 letter proved that a subrogation lien was established prior to the Judge’s January 2009 decision. Thus, medical expenses were not payable directly to the claimant. The claimant appealed to the Board again, and the Board affirmed.

The Commonwealth Court affirmed the decisions below. The claimant argued that Company A did not preserve its subrogation lien and, therefore, medical expenses were directly payable to him. The claimant argued that in accordance with the case of Frymiare v. WCAB (D. Pelliggi & Sons), 524 A.2d 1016 (Pa. Cmwlth. 1987), the Judge wrongly ordered payment of the medical expenses to the health care provider, because Company A did not seek to protect its subrogation lien before the Judge awarded benefits.

According to the Commonwealth Court, however, the claimant submitted into evidence a letter stating that Company A had a subrogation lien for the awarded medical expenses and the Judge properly found that the letter established that an agreement for the subrogation lien was in place before the claim petition was decided.

Case Law Alerts, 4th Quarter, October 2014