CMS' delay doesn't justify penalties, attorney's fees for worker
Case name: Harrelson v. Bestaff Arcadia, No. 2010 CA 1647 (La. Ct. App. 06/10/11).
Ruling: The Louisiana Court of Appeal held that a worker was not entitled to penalties and attorney's fees for an employer's delay in paying him funds for a Medicare set-aside account.
What it means: In Louisiana, a worker cannot receive penalties and attorney's fees for a delay in payment that is completely out of the employer's control.
Summary: A worker injured his shoulder while working. The worker and his employer entered into a settlement agreement where the employer agreed to pay a lump sum and an amount to be placed into a Medicare set-aside account to cover future medical expenses. The employer sent the lump-sum amount to the worker, assuring him that the balance for the Medicare set-aside would be sent shortly. Two months later, after the Centers for Medicare and Medicaid Services approved the amount, the employer sent the balance to the worker. The worker sought to enforce the settlement agreement, claiming that he was entitled to penalties and attorney's fees because the employer failed to pay the full amount within 30 days. The Louisiana Court of Appeal held that the worker was not entitled to penalties and attorney's fees.
The court explained that the right to enforce the employer's conditional obligation to fund the Medicare set-aside account did not arise until the Centers for Medicare and Medicaid Services approved the funding. The court noted that there was no language in the agreement requiring the employer to pay the funds before CMS approved it.
The employer sent its proposal for funding the account within 30 days of the approval of the settlement agreement, but CMS did not approve it until one month later. The funds were issued to the worker within 30 days of CMS' approval. The court explained that the timing of CMS' approval was completely out of the employer's control.
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August 8, 2011
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