Charleston, WV (WorkersCompensation.com) – The West Virginia Supreme Court ruled this week that insurance companies who overpay workers’ compensation claimants cannot recoup those excess payments.
The 4-1 decision overturned a Workers’ Compensation Board of Review (WCBR) assertion that found Exel Logistics could recoup more than 150 days of benefit payments made to a claimant. The Supreme Court found that WCBR had misread the law.
The case revolves around temporary total disability benefits awarded to Edward Reed, a shuttle driver for Exel. In 2013, according to court records, Reed stepped on the frame of a truck and slipped, resulting in a fractured ankle which required several surgeries to stabilize. During that time, Reed filed and applied for workers’ compensation and it was determined that he was due $67.37 per day in temporary total disability payments, payments which Exel’s insurance carrier promptly began paying.
On Nov. 25, 2015, a doctor examined Reed and determined that he was able to go back to work, but that he had a 4 percent permanent partial disability entitling him to more than $7,550 in a lump sum payment. Exel terminated his temporary total disability payments effective Nov. 24.
The following year, in June 2016, the insurance provider filed a claim relying on state law that limits temporary total disability payments to 104 weeks, meaning that they had unnecessarily paid Reed for 156 days, amounting to $10,509.72. The claims examiner then refused to pay Reed the lump sum settlement, and asked that the outstanding amount, $2,956.28, be applied to any future settlements.
Reed appealed to the Office of Judges, who sided with him and found that the claims examiner had “failed to timely seek to terminate the claimant’s benefits in June 2015, or to otherwise comply with workers’ compensation laws pertaining to the modification or overpayment of temporary total disability benefits.”
Exel then appealed to the Workers’ Compensation Board of Review, which sided with Exel.
But Reed appealed to the West Virginia Supreme Court of Appeals and found that the claims examiner had neither followed proper procedures, nor followed state law in seeking to reclaim the overpayments.
“The claimant contends that W.Va. Code § 23-4-1c(h) permits the employer or its representative to recover overpayments only when there has been an adjudicated final decision in the employer’s favor of an employer’s modification or termination of the claimant’s receipt of temporary total disability benefits,” Justice Menis Ketchum wrote in the majority opinion. “In this case, neither the employer nor the claims examiner gave the claimant any notice, objection, or appealable order indicating the claimant’s benefits should have been terminated in June 2015.”
The court went on to lay the blame for the overpayment at the feet of the claims examiner.
“…once a work-related injury has been ruled compensable and a claimant has been awarded temporary total disability benefits, the claimant continues to receive these benefits until the employer… properly seeks to modify or terminate that award. While the modification or termination is pending or under …, the employer (or its insurer) must continue to pay the temporary total disability benefits. If the claimant is later found to not be entitled to the benefits that were paid, then an overpayment legally exists and the employer may seek to recover the overpayment,” Justice Ketchum wrote.
“In the instant case, the claims examiner had complete control of the claim and of the payment of temporary total disability benefits. We do not know why the claims examiner did not seek to modify and terminate the claimant’s benefits at the end of 104 weeks; perhaps it was carelessness, or perhaps it was an act of grace to assist the claimant. All we can say from this record is that the claimant relied to his detriment upon the claims examiner’s actions, did not return to the work force, and continued to seek physical rehabilitation for his work-related injury. Because the claims examiner did not seek to modify and terminate the temporary total disability benefits at the end of 104 weeks, as required…, the claims examiner may not seek to recover as overpayments the 156 days of benefits paid beyond that deadline.”
In her dissenting opinion siding with the WCBR, Justice Beth Walker said it was clear that Reed received payments to which he was not entitled, and therefore any further payments, including the lump sum for partial disability, should be applied to the overpayment.
“In this case, the claims administrator and the Board of Review did not declare an overpayment based on the conclusion that Mr. Reed was not initially entitled to TTD benefits because, for example, he did not sustain his injury in the course of and resulting from covered employment,” Justice Walker wrote. “Rather, they declared an overpayment because they concluded that Mr. Reed had received TTD benefits for 156 days beyond the 104-week statutory cutoff imposed by West Virginia Code § 23-4-6(c). Exhausting one’s statutory entitlement to TTD benefits is different from failing to satisfy the jurisdictional requirements necessary to qualify for workers’ compensation benefits, initially.”
Reed’s attorney, Jane Glauser, told WorkersCompensation.com that the claims manager has recognized the Supreme Court’s ruling and paid Reed his permanent partial disability payment and that Reed is still undergoing medical treatment and rehabilitation for his injured ankle.
“Hopefully, he will be able to return to work and find sufficient employment,” she said.
This article was updated as of 06/22/18.