Such it is in Alaska where a conscientious claims adjuster likely felt she was doing a good job attempting to protect the interests of the employer/carrier while meeting the requirements of the law - but when dealing with a high profile catastrophic claim saving a few bucks here and there comes back to haunt.
Willard Harris Jr. had worked as a truck driver for M-K Rivers. In 1976, when he was 22 years old, Harris injured his spinal cord in a roll-over accident off the Richardson Highway. The accident left Harris a paraplegic.
Not long after the accident, he developed heterotopic ossification in his hips - where bone grows in abnormal places in the body. Spinal cord injuries are recognized factors that increase the likelihood of developing heterotopic ossification.
The condition caused Harris' hips to become fixed. His knees, ankles and toes are also fixed.
Because of Harris' fused hips, he is unable to transfer as easily as most paraplegics and cannot spend much time in his wheelchair because he cannot be positioned in the same way that other paraplegics can. He spends most of his time in one of several medical beds.
At the time of his deposition in 2008, Harris had two beds in his home, one for sleeping and one for use during the day, as well as one bed in a van for him to use while traveling long distances.
The type of bed Harris uses is important because he suffers from chronic bed sores, and some beds are better able to prevent formation of bed sores and promote their healing. The specialized beds Harris requires are expensive, costing more than $50,000 each.
Harris is also a diabetic and suffers from hypertension and sleep apnea. He has difficulty maintaining his body temperature, because of his spinal cord injury, and he is easily susceptible to infections.
The employer/carrier did not challenge the compensability of Harris' accident, and through the years there were multiple partial settlement agreements for housing accommodation and benefit levels.
In 1998 Harris' diabetes was accepted as compensable and the employer/carrier agreed to pay for 24-hour-a-day attendant care, a personal trainer and treatment at a non-medical fitness facility.
The adjuster on Harris' case had been on the file since 1998 - obviously very familiar with the case and Harris' extreme conditions.
In my opinion this is a very good thing - having a sole adjuster on a catastrophic claim such as this promotes uniformity in management, and I'm sure there was some personal level of involvement after time. How could one not get attached to handling a case like this? And I might note that the adjuster, I'm sure, was in a difficult position because of the extreme expense involved in the claim.
It's no fun being in the middle of a situation where the beneficiary might need a very high level of service resulting in extreme expense and the carrier's requirements to keep expenses in check.
After the adjuster noticed an increase in Harris' medical treatment in 2006, she sent Harris for an independent medical evaluation, who commented that the treatment was mostly appropriate, with some minor changes.
The case took a turn for the worse when the IME commented that she did not have the expertise to recommend one bed over another. About a week later Harris' treating physician wrote a prescription for a Clinitron bed.
The employer/carrier controverted Harris' request for the bed. Its notice of controversion gave no reason for its refusal to pay for the bed, aside from the assertion that the IME report had said Harris' current bed was "strongly recommended by his physicians."
The Alaska Workers' Compensation Board found that the controversion of the Clinitron bed was not in good faith because the claims adjuster had no evidence on which to base the controversion. The board then assessed a penalty "on the value of a Clinitron bed as of the controversion date."
There were other penalty assessments for other action take by the employer/carrier based on the IME report.
The Alaska Workers' Compensation Appeals Commission reversed the Board's imposition of penalties because the prescription for the bed was never actually filled and the request for the bed was subsequently withdrawn (and another bed substituted for it), so no compensation was owing, and thus no penalty was due.
The case went up to the Alaska Supreme Court, which opined that Alaska Statute 23.30.155(e) requires the imposition of a penalty when compensation is not paid within seven days after it becomes "due." Since there is no statutory definition of "due," the court relied on Webster's Dictionary definition of "due" as "(p)ayable immediately or on demand."
Since the comp system was designed to have employers make payments to injured workers without Board intervention, and for workers to receive indemnity and medical benefits in a timely manner, the court reasoned that it makes sense to interpret the word "due," as used in AS 23.30.155(e), as meaning "(p)ayable immediately or on demand."
The court also pointed out that it has previously construed the penalty provision in AS 23.30.155 as giving insurers "an incentive" to pay medical bills promptly.
"Without the possibility of a penalty, an insurer would be able to controvert expensive medical care for no reason and escape without sanction, even when the care is critical to an employee's health," the court said.
The Supreme Court said that medical benefits must become "due" for purposes of controversion and penalties when the employer has notice they have been prescribed by a doctor.
Since a controversion of medical benefits that is not made in good faith delays receipt of a benefit, the court said such conduct supports the imposition of a penalty if the controversion delays medical care that is reasonable and necessary.
Since such a controversion could prevent an injured worker from receiving the treatment, there might never be a bill to present for payment, the court said.
After reviewing case law in other states where bad faith penalties were recognized, the court said that if an employer can choose to controvert, without good reason, treatment that it has been providing for years, without risk of penalty, then it would have "no incentive to consider carefully whether it should controvert."
In light of these considerations, the court said the Commission erred in deciding that as a matter of law no penalty could be imposed for the bad-faith controversion of the Clinitron bed.
The court said it could not tell from the record whether Harris ever received any of the disputed treatment, and so it ordered the case remanded for the Board to figure that out. The court said Harris would be free to pursue a penalty on the controversion of the bed or other treatment items that were unpaid because of the controversion, it would be up to the Board to decide what that penalty should be.
The case is Harris v. M-K Rivers, No. S-14254/14262.
After the adjuster noticed an increase in Harris' medical treatment in 2006, she sent Harris for an independent medical evaluation, who commented that the treatment was mostly appropriate, with some minor changes.
The case took a turn for the worse when the IME commented that she did not have the expertise to recommend one bed over another. About a week later Harris' treating physician wrote a prescription for a Clinitron bed.
The employer/carrier controverted Harris' request for the bed. Its notice of controversion gave no reason for its refusal to pay for the bed, aside from the assertion that the IME report had said Harris' current bed was "strongly recommended by his physicians."
The Alaska Workers' Compensation Board found that the controversion of the Clinitron bed was not in good faith because the claims adjuster had no evidence on which to base the controversion. The board then assessed a penalty "on the value of a Clinitron bed as of the controversion date."
There were other penalty assessments for other action take by the employer/carrier based on the IME report.
The Alaska Workers' Compensation Appeals Commission reversed the Board's imposition of penalties because the prescription for the bed was never actually filled and the request for the bed was subsequently withdrawn (and another bed substituted for it), so no compensation was owing, and thus no penalty was due.
The case went up to the Alaska Supreme Court, which opined that Alaska Statute 23.30.155(e) requires the imposition of a penalty when compensation is not paid within seven days after it becomes "due." Since there is no statutory definition of "due," the court relied on Webster's Dictionary definition of "due" as "(p)ayable immediately or on demand."
Since the comp system was designed to have employers make payments to injured workers without Board intervention, and for workers to receive indemnity and medical benefits in a timely manner, the court reasoned that it makes sense to interpret the word "due," as used in AS 23.30.155(e), as meaning "(p)ayable immediately or on demand."
The court also pointed out that it has previously construed the penalty provision in AS 23.30.155 as giving insurers "an incentive" to pay medical bills promptly.
"Without the possibility of a penalty, an insurer would be able to controvert expensive medical care for no reason and escape without sanction, even when the care is critical to an employee's health," the court said.
The Supreme Court said that medical benefits must become "due" for purposes of controversion and penalties when the employer has notice they have been prescribed by a doctor.
Since a controversion of medical benefits that is not made in good faith delays receipt of a benefit, the court said such conduct supports the imposition of a penalty if the controversion delays medical care that is reasonable and necessary.
Since such a controversion could prevent an injured worker from receiving the treatment, there might never be a bill to present for payment, the court said.
After reviewing case law in other states where bad faith penalties were recognized, the court said that if an employer can choose to controvert, without good reason, treatment that it has been providing for years, without risk of penalty, then it would have "no incentive to consider carefully whether it should controvert."
In light of these considerations, the court said the Commission erred in deciding that as a matter of law no penalty could be imposed for the bad-faith controversion of the Clinitron bed.
The court said it could not tell from the record whether Harris ever received any of the disputed treatment, and so it ordered the case remanded for the Board to figure that out. The court said Harris would be free to pursue a penalty on the controversion of the bed or other treatment items that were unpaid because of the controversion, it would be up to the Board to decide what that penalty should be.
The case is Harris v. M-K Rivers, No. S-14254/14262.
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