The employers were not required to reimburse a DHS lien for the claimant’s medical treatment until the medical providers submitted the required bills and reports to the employers.

The claimant suffered amputations of both lower extremities. A workers’ compensation judge granted a Claim Petition and directed Dura-Bond, the employer, to pay the claimant’s benefits. In granting the petition, the judge found Dura-Bond and PI&I (the claimant’s second employer) to be the claimant’s statutory employers. The judge ordered Dura-Bond to pay the full amount of benefits, with an entitlement to indemnification from PI&I. Dura-Bond paid the Department of Human Services’ (DHS) lien for payments made by DHS for the claimant’s medical treatment. 

However, the claimant’s medical providers continued to submit their bills to DHS, which continued to pay the providers. DHS then notified Dura-Bond of their lien, which had reached the sum of $150,539.74. PI&I filed a review petition, which Dura-Bond joined based on the lien. Collectively, both alleged the claimant failed to ensure that the providers billed his treatment expenses to them, according to Section 306 (f.1) of the Act. The judge granted the review petition, finding the providers and DHS were aware that both employers were liable for the claimant’s medical bills, but had bypassed the employers and continued to bill DHS. The judge concluded the employers were not obligated to reimburse the lien unless and until the bills in question were submitted to them for review, payment, denial and/or Utilization Review, in accordance with the Act. 

The claimant appealed to the Workers’ Compensation Appeal Board, which reversed the workers’ compensation judge’s decision, holding that the employers were responsible for payment of the DHS lien. The employers then appealed to the Commonwealth Court. 

Noting that this was a case of first impression, the court held the employers’ obligation to pay for work-related medical treatment, including the DHS lien, is not triggered until they receive the proper billing reports and medical records from the treatment providers in order to confirm causality and the reasonableness and necessity for the underlying treatment. The court found the Board erroneously declared that, since DHS already paid the claimant’s providers, the employers could not now challenge causality or reasonableness and necessity of the medical services for which DHS paid. The court noted the decision of the workers’ compensation judge did not state that the employers were not responsible for payment of the lien but, rather, stated they are not obligated to reimburse the lien, unless and until the bills in question are submitted to them for review. According to the court, the Act places the onus on the claimant and his providers to produce proper billing forms and related medical reports to the employers once a work injury is deemed compensable, regardless of whether the claimant is a Medicaid recipient. 

The court vacated and remanded the matter for the workers’ compensation judge to determine the best way to satisfy the payment issues in this case. 

_{What’s Hot in Workers’ Comp, Vol. 29, No. 1, January 2025, is prepared by Marshall Dennehey to provide information on recent legal developments of interest to our readers. This publication is not intended to provide legal advice for a specific situation or to create an attorney-client relationship. We would be pleased to provide such legal assistance as you require on these and other subjects when called upon. ATTORNEY ADVERTISING pursuant to New York RPC 7.1 Copyright © 2025 Marshall Dennehey, all rights reserved. No part of this publication may be reprinted without the express written permission of our firm. For reprints or inquiries, or if you wish to be removed from this mailing list, contact tamontemuro@mdwcg.com.}