Medicaid's payment, write-off erase employer's liability to worker

In Louisiana, an employer is not liable for medical expenses paid or written off by Medicaid.

Case name: Benoit v. Turner Industries Group, L.L.C., No. 2011-C-1130 (La. 01/24/12).

Ruling: The Louisiana Supreme Court held that an employer was not liable for a worker's medical expenses that totaled $625,168.

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What it means: In Louisiana, an employer is not liable for medical expenses paid or written off by Medicaid.

Summary: A worker worked for a company for 27 years and was exposed to chemicals, including benzene. Later, he developed acute myeloid leukemia. He sought indemnity benefits and medical expenses compensation from his employer. The employer denied the claim. The worker's medical expenses totaled $625,168 of which Medicaid paid $203,124 and "wrote off" the remainder. The Louisiana Supreme Court held that the employer was not liable for the worker's medical expenses.

The court found that the payment of medical expenses by Medicaid extinguished the worker's claim against the employer for those expenses due to a statute. Therefore, the employer was not liable for that amount.

The court also concluded that the employer was not liable for the medical expenses written off pursuant to the Medicaid program. The court said that if the employer paid the worker, the worker would have received a double recovery. However, the court said that the "mere fact that the employer may have benefitted from a reduction of expenses through the Medicaid write-off process does not impermissibly diminish the employer's liability for medical expenses." The court said that the employer remained liable for the reduced amount of medical expenses paid by Medicaid, although the reimbursement was owed to the state rather than the worker.

A judge who dissented in part opined that the majority rewarded the employer for "acting in bad faith" by refusing to pay the medical bills. The judge said the worker's sole remedy was a penalty, but the amount would be a "pittance and wholly inadequate to deter this kind of behavior from employers in the future." Another dissenting judge pointed out that the majority's holding shifted the burden of taking care of injured workers to the state.

Read more at the WorkersComp Forum homepage.

March 12, 2012

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