DHS Lien Not Automatically Reimbursable Under PA Workers’ Comp

While perhaps not of interest to every injured worker, the subject of PA Department of Human Services’ (DHS) liens is one that appears from time to time in Pennsylvania workers’ compensation cases.  And, while the injured workers may not have a huge interest, the PA workers’ compensation insurance companies surely feel otherwise.  The topic can easily (as in the case we will discuss) feature bills of over $100,000.

In the case we will be addressing (Dura-Bond Coating, Inc. v. R. Marshall & PI&I Motor Express (WCAB)), the injured worker suffered a catastrophic work injury, leading to the amputation of both of his legs.  Given that there was a dispute as to what entity was actually his “employer,” there was considerable litigation following the filing of a Claim Petition.

While the Claim Petition was being litigated, medical bills were not being paid by any workers’ compensation insurance carrier.  This resulted in bills being paid through DHS.  In a situation like this, where DHS pays for treatment that should be borne by another party, DHS has a lien to recover payments it has made.

Perhaps here we should talk about how medical bills get paid generally in Pennsylvania workers’ compensation.  Once an injured worker gets treatment for a work injury, the healthcare provider (be that a doctor, therapist, pharmacy, or other healthcare professional) must submit a bill, with supporting documentation, on appropriate forms developed by the PA Bureau of Workers’ Compensation.  The insurance company then has 30 days to either pay the bill or file for Utilization Review.  In theory, until the workers’ comp insurance carrier receives the bill and supporting paperwork, it has no obligation to do anything.

Back to the case we were discussing.  Once the Claim Petition was decided, the responsible workers’ comp insurance carrier repaid the lien to DHS.  The issue started when the treating healthcare providers continued to submit bills to DHS after that time, and DHS continued to pay the bills.  Indeed, this included both medical treatment related to the work injury, as well as treatment not related.

Since DHS paid the healthcare providers’ bills in full, the providers had no motivation to submit any of the bills to the workers’ comp insurance carrier.  DHS, who was not a party to the litigation, sought payment of their lien.  This was opposed by the workers’ compensation insurance carrier, since no healthcare provider had submitted the bills as required under the Pennsylvania Workers’ Compensation Act.  As typically happens, this led to additional litigation.

After hearing the arguments, and reviewing the evidence, the Workers’ Compensation Judge (WCJ) found that the insurance carrier is “ . . . not obligated to reimburse the [DHS L]ien . . . unless and until the bills in question are submitted to them for review, payment, denial[,] and/or [u]tilization [r]eview in accordance with the . . . Act.”

The injured worker filed an appeal to the Workers’ Compensation Appeal Board (WCAB), which reversed the decision of the WCJ, finding that the insurance carrier was responsible for payment of the DHS lien.  Upon further appeal, the Commonwealth Court of Pennsylvania reversed the decision of the WCAB, concluding that the WCJ was correct in stating that the insurance carrier is not required to pay any bills “unless and until the bills in question are submitted to them.”  The DHS lien is not required to be reimbursed until that time.

So, the issue then becomes how the situation gets resolved.  After concluding that the injured worker was responsible to get the healthcare provider to submit such bills, the Court observed:

“Ideally, the parties would work with DHS to determine which payments underlying the DHS Lien are likely compensable, Claimant would obtain the billing reports and related medical records from the providers or have providers send them to Employers, Employers would review, reprice, deny, and/or seek utilization review of those bills and, thereafter, reimburse the DHS Lien only for those treatments causally related to Claimant’s work injury and reasonable and necessary therefor. In the alternative, the parties could reach another mutually agreeable solution that satisfies (the law) . . . “

But, despite recognizing the issue, the Court completely disregarded the practical effect.  Injured workers do not control where, how or when any healthcare provider bills.  We can attest to this through our decades of practice representing injured workers.  Moreover, healthcare providers are extremely unlikely to provide the documentation without cost, or to complete the requisite forms (Remember, they have already been paid in full).  To suggest that injured workers have control over providers’ billing practices is both absurd and unreasonable.

Interestingly, it is the healthcare providers who created this issue by billing the incorrect source (again, we can relate, through decades of practice, that this is an extremely common issue).  Yet, under that reasoning of the Court, the providers bear no responsibility or consequence for this action.  The Court would have this obligation fall on the injured worker – a completely innocent party.  As if suffering a traumatic work injury were not enough . . .

Perhaps there is a different alternative here, though it may take some legislative action.  Place the burden on DHS to get the bills and records, since they are the party seeking reimbursement.  Or, allow DHS to retract payments from the providers when DHS is billed in cases where it should not have been.  To leave the injured worker in the middle of this fight is simply unfair and untenable.