Workers Comp Personal Injury Liens-Subrogation
The employer/carrier who is paying benefits to the employer has a right of subrogation. This means they have a right to recoup the money they have paid out. They further have a right to a credit for money that may be owed in the future.
This is important in any third party claim. This subrogation right or lien must be dealt with. If you do not deal with it appropriately then the employee’s workers’ comp benefits may be terminated. Pursuant to Va. Code § 65.2-309, the court has no jurisdiction to reduce or otherwise compromise the lien. Call or contact us for a free consult.
If the case is settled with no or little possibility of future lost time from work but a possibility of future medical care and assuming that you have a lifetime award, then the Commission will probably enter a suspension order. This will suspend the claimant’s entitlement to future medical benefits pending exhaustion of the amount received as the settlement.
What is Recoverable
It’s not unusual for workers’ comp carriers to try to overreach in terms of what their lien actually is.
They may claim recoupment of all vocational rehabilitation expenses. Those are probably not recoverable under Virginia Code Section 65.2-310. There is nothing in that Code section that indicates they can recover that. In Sheris v. Sheris, 212 Va. 825 (1972), the court said that what the workers’ comp carrier can recover are the amounts that they “actually had to pay for the benefit of the injured employee”. Vocational rehab expenses where the carrier is simply trying to get the employee back to work is not something that they “had” to pay and therefore should not be recoverable. Likewise in Washington v. Miller & Rhoades, 68 O.I.C. 250 (1989), the court said that private vocational rehabilitation expenses are not recoverable.
Cost Containment Companies
As to medical expenses, the Sheris case likewise can be relied upon in terms of the scope of subrogation. What carriers frequently do is they hire a third party broker or intermediary to find healthcare providers that will provide the services at a discounted rate. The amount paid to that broker is not recoverable. The amount that is recoverable is the amount that was paid to the actual healthcare provider. In Lockwood v. Automatic Control of Tidewater, 63 O.I.C. 219 (1984), the Commission held that an independent medical exam cost is not recoverable. Other similar expenses likewise are not recoverable. Likewise the Miller & Rhoades case mentioned above can be cited for that same position.
It should also be pointed out that the language that is in 65.2-310 also appears in 65.2-309.1 and 65.2-313.
In terms of getting the information from these third party brokers as to what they paid to the provider, you may have to issue a subpoena to get the amount they received from the workers’ comp carrier and then the amount they actually paid to the provider. You probably also want to get a copy of the contract between the broker and that provider. Once you have that information, then file an application with the Commission to ask the Commission to determine the lien.
Workers Comp Personal Injury Liens-Settlements
If you are able to settle the Workers Comp case for a lump sum, then there may be an issue as to whether or not that lump sum is recoverable out of the third party claim. Whether it is or is not is going to depend on the language in the Workers Comp settlement documents and the Workers Comp order. They need to be reviewed thoroughly. Most carriers now require that the lump sum amount be recoverable out of the third party claim.
Disability Claims are Separate from Personal Injury and Workers Comp Claims
In cases where you become disabled for reasons not covered by workers comp, there may be not only a basis for a claim against a third party but you may also have a disability claim. This would be under the disability insurance policy provided by your employer or that you bought.
The initial form of coverage is short term disability. That covers the first six months. After six months the employee must apply for and qualify for long term disability.
Two Types of Disability
The criteria for short term disability may differ from policy to policy. Typically they require medical proof that the employee cannot return to his normal job.
The criteria for long term disability are stricter. They require that not only can the employee not return to the former job but is not physically able to work at all. Long term disability claims can be worth substantial sums of money. Frequently they are hard fought by the carrier. Like workers comp claim they frequently are lump sum settled. That means a lump sum is paid to the employee with no further benefits.
Disability claims are totally separate from workers comp claims.
There are several other blogs on this site dealing with different types of liens:
