What to do with Claims for Underpaid/Unpaid Medical Bills

Over the past few years, there has been a steady rise of claims seeking payment of medical bills for treatment long since provided to injured employees. The Virginia Workers’ Compensation Commission has recently issued several opinions providing more clarity on how to defend against these claims.

The Virginia Workers’ Compensation Commission approved a final settlement via Petition and Order on July 17, 2019, relating to a compensable injury by accident occurring on December 28, 2012. Flynn v. Crossmark Holdings, Inc., JCN VA00000720409 (Dec. 17, 2020). On September 5, 2019, the claimant sought payment of alleged unpaid and underpaid medical expenses totaling $35,131.35. Relying upon Hansen v. TMA Trucking, Inc., the Deputy Commissioner found that the claimant had standing to seek full payment of these bills, despite the provision in Virginia Code § 65.2-714(D) strictly prohibiting balance billing the claimant for any amount unpaid or underpaid by an employer or carrier. The employer and carrier argued that since this claimant had settled his claim for benefits, he no longer had a right to ongoing medical treatment, and therefore did not have standing to bring the claim for full payment of the medical bills. The Full Commission, in a split Opinion, found that even when a claimant has settled a claim, there still exists the right to force an employer and carrier to pay a medical bill even when the medical provider has not sought payment of the bill. The majority opinion grounded its holding in the settlement as a contract in finding that the claimant still possessed the right to seek payment.

A nearly identical issue was litigated again in March 2021. Powers v. Sears Roebuck and Co., JCN 2140024 (Mar. 9, 2021). The Commission, this time with no recorded dissent, found the employer responsible for the full payment of a number of medicals, some dating to 2005.

When faced with these claims for payment of medical bills in the future, and specifically for medical bills that predate the Fee Schedule, there are still several defenses possible to combat payment.

1. Always start by looking to whether a contract was in place between the employer or carrier and the medical provider. If the employer or carrier can show that the medical bill was paid pursuant to a contract than that is a full defense to any argument that an unpaid or underpaid bill exists. This is always going to be the simplest defense to these claims. This is not always easy, as the employer or carrier may not be able to locate the contract due to the passage of time or the transfer of the employer from one carrier to another, but it provides an absolute defense and should be pursued until the contract is located, or it is determined with certainty that no contract existed or that the contract cannot be located.
2. To date it does not appear that a case has presented the defense of the statute of limitations on contract enforcement in Virginia. The Code of Virginia provides that any action arising from a breach of contract, with limited exceptions, must be brought within five years from the date of the contract. As the Commission has indicated that they are viewing compromise settlements as contracts, if a claimant brings an action for payment of unpaid or underpaid medical bills after five years from an approved settlement, there is a live defense that the action is barred by the statute of limitations.
3. Review the history of the claim to rule out the possibility that the medical bills were previously ruled on during the course of previous litigation. With medical bills stretching back decades, and the handling of the file almost certainly passing between multiple carriers and attorneys, a review will ensure that the bills were not previously disposed of through a ruling from the Commission.
4. As always, review the medical bills to ensure that they are in fact related to the compensable injury by accident, and that the medical services were authorized, reasonable, and necessary.

As more and more time passes, the volume of these claims will decrease as the amount of medical treatment rendered under the Fee Schedule increases. Until then, employers and carriers need to be prepared to dig deep into the history of a claim to avoid the payment of unwarranted medical bills.

Should you have any questions about the issues discussed here or other legal issues, please do not hesitate to contact the lawyers at Ford Richardson.

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