Opinion
CLAIM NO. F100282
OPINION FILED JANUARY 8, 2003
Upon review before the FULL COMMISSION in Little Rock, Pulaski County, Arkansas.
Claimant represented by HONORABLE JOE M. ROGERS, Attorney at Law, West Memphis, Arkansas.
Respondents represented by HONORABLE BRUCE D. ANIBLE, Attorney at Law, Little Rock, Arkansas.
Decision of the Administrative Law Judge: Affirmed in part and reversed in part.
OPINION AND ORDER
The claimant appeals portions of an amended opinion and order filed by the Administrative Law Judge on May 3, 2002. In that opinion and order, the Administrative Law Judge found in relevant part that the provisions of Ark. Code Ann. § 11-9-411 apply to this claim, and that the claimant did not timely raise a constitutional challenge to the provisions of Ark. Code Ann. § 11-9-411. On appeal, the claimant's brief to the Full Commission appears to challenge the constitutionality of Ark. Code Ann. § 11-9-411 as applied to payments of both medical benefits and disability benefits. In addition, the claimant moves the Full Commission to accept as additional evidence a letter establishing that the Attorney General's office has no intention to intervene in defending the constitutionality of Ark. Code Ann. § 11-9-411 in this case.
After conducting a de novo review of the entire record, we note that the Administrative Law Judge did not award any temporary disability benefits at issue in this case, and that the claimant did not appeal the Administrative Law Judge's decision in this regard. Therefore, we find that the claimant has failed to establish that he has been harmed by the provisions of Ark. Code Ann. § 11-9-411 as it may apply to disability benefits. Consequently, we find that the claimant's constitutional challenge in this regard has been rendered moot by the lack of any award of disability benefits in this claim. See K.S. v. State of Arkansas, 343 Ark. 59, 31 S.W.3d 849 (2000); Estate of Donley v. Pace Industries, 336 Ark. 101, 984 S.W.2d 421 (1999); Quinn v. Webb Wheel Products, 334 Ark. 573, 976 S.W.2d 386 (1998).
Further, we note that the Administrative Law Judge's prehearing order indicates that the respondents were seeking an offset on disability benefits paid, if TTD was awarded, and that prehearing order makes no mention of any offset sought for any medical benefits paid. Under these circumstances, where there is no indication that an offset against medical benefits was raised in the prehearing order, we find that the claimant's attorney timely raised the constitutionality of Ark. Code Ann. § 11-9-411 as applied to group medical benefits by raising that issue for the first time in his post-hearing brief to the Administrative Law Judge and again in his motion for clarification to the Administrative Law Judge. We reach this conclusion since the claimant was not provided any notice prior to the hearing that any offset against the medical benefits at issue would be sought by the respondent or applied by the Administrative Law Judge. Accord Johnson v. Hux, 28 Ark. App. 187, 772 S.W.2d 362 (1989). The Administrative Law Judge's decision in this regard is therefore reversed.
Because we find that the claimant's attorney timely raised the constitutionality of Ark. Code Ann. § 11-9-411 as applied to group medical benefits in his post-hearing brief to the Administrative Law Judge under the circumstances presented in this case, we also find that the claimant was diligent in immediately thereafter seeking and presenting as additional evidence a letter from the Attorney General's office indicating whether or not the Attorney General would intervene on the constitutional issue. Because the claimant was diligent in seeking and presenting this additional evidence, and since this information is relevant to preserving a constitutional challenge of an Arkansas statute, we grant the claimant's motion to submit this additional evidence from the Attorney General's office. Finally, for the reasons discussed below, we are not persuaded by the claimant's argument on appeal that the provisions of Ark. Code Ann. § 11-9-411 do not apply to the group medical payments at issue in this case, and we are not persuaded by the claimant's argument that Ark. Code Ann. § 11-9-411 would be unconstitutional if applied to the group medical benefit payment at issue in this case.
Ark. Code Ann. § 11-9-411(Repl. 2002) provides:
(a) Any benefits payable to an injured worker under this chapter shall be reduced in an amount equal to, dollar-for-dollar, the amount of benefits the injured worker has previously received for the same medical services or period of disability, whether those benefits were paid under a group health care service plan of whatever form or nature, a group disability policy, a group loss of income policy, a group accident, health, or accident and health policy, a self-insured employee health or welfare benefit plan, or a group hospital or medical service contract.
(b) The claimant shall be required to disclose in a manner to be determined by the commission the identity, address, or phone number of any person or entity which has paid benefits described in this section in connection with any claim under this chapter.
(c)(1) Prior to any final award or approval of a joint petition, the claimant shall be required to furnish the respondent with releases of all subrogation claims for the benefits described in this section.
(2)(A) In the event the claimant is unable to produce releases required by this section, then the commission shall determine the amount of such potential subrogation claims and shall direct the carrier or self-insured employer to hold in reserve only said sums for a period of five (5) years.
(B) If, after the expiration of five (5) years, no release or final court order is presented otherwise directing the payment of said sums, then the carrier or self-insured employer shall tender said sums to the Death and Permanent Total Disability Trust Fund.
For his first point on appeal, the claimant argues that Ark. Code Ann. § 11-9-411(a) does not provide an offset for group disability or medical benefits under a policy or plan paid for by the claimant. To reach this conclusion, the claimant points us to Riverside Furniture Co. v. Loyd, 42 Ark. App. 2 [ 42 Ark. App. 1], 852 S.W.2d 147 (1993);Southwestern Bell Telephone Co. v. Siegler, 240 Ark. 132, 398 S.W.2d 531 (1966); Emerson Electric v. Cargile, 5 Ark. App. 123, 633 S.W.2d 389 (1982); Varnell v. Union Carbide, 29 Ark. App. 185, 779 S.W.2d 542 [ 779 S.W.2d 543] (1989); and A. Larson, The Law of Workers' Compensation, § 97.51(a) (1989). However, we note, as does the claimant's brief, that the provisions of Ark. Code Ann. § 11-9-411 were enacted after the cases cited in the claimant's brief, and as the claimant's brief also notes, the provisions of Section 411(a) at issue do not specify that any such policy or plan must be paid for or provided solely by the employer, as the claimant would have us interpret, before an offset can occur. Because the provisions of Section 411(a) at issue do not contain the limiting language that the claimant would have us incorporate by interpretation, we find that the provisions of Section 411 would in fact apply to any group policy or planregardless of how it was funded (i.e., whether funded solely by the employer, solely by the employee, or partially by the employer and partially by the employee).
The claimant also argues in his brief on appeal that:
The statute contains inconsistencies, which prohibit an offset. This is because § 11-9-411(c)(1) requires claimant to furnish the respondent with release of all subrogation claims for the benefits described in this section. The only way claimant can provide for such a release is for the respondents to pay the group medical expense provider all sums it may have paid, which precludes it from being granted an offset. For example, assume group provider A paid a $1,000.00 medical bill to a particular medical provider of claimant. Claimant is required under § 11-9-411(c)(1) to provide his workers' compensation carrier with a release of group provider A's subrogation claim of $1,000.00. The only way claimant can do this is for the respondents to pay the group provider $1,000.00, which makes a dollar for dollar offset impossible.
Although the Arkansas courts have apparently not interpreted the provisions of Ark. Code Ann. § 11-9-411 in any published opinion, the Full Commission in Ronald Tadlock v. St. Joseph's Regional Health Center, Full Workers' Compensation Commission, Opinion filed December 9, 1999 (W.C.C. No. E802168) interpreted that Ark. Code Ann. § 11-9-411 was enacted in part to protect the interest of the third-party payor who is not normally a party to the hearing, and not solely to protect the interest of the claimant or the respondent who are parties to the hearing. As we interpreted Section 411 in Tadlock, the workers' compensation carrier is entitled to a dollar-for-dollar offset on those benefits described in Ark. Code Ann. § 11-9-411(a) and the respondents are directed by statute for the benefit of the third-party payor to hold in reserve for a period of five years a sum equal to the potential subrogation claims for any benefits described in Ark. Code Ann. § 11-9-411(a). See id.
As we understand operation of the statute as applied to the example quoted from the claimant's brief above, a workers' compensation carrier will hold in reserve and ultimately reimburse a group carrier for those medical benefits paid for by the group carrier. The workers' compensation carrier will also take a dollar-for-dollar offset (i.e., not pay the claimant or the medical provider) for benefits described in Section 411(a), and the group carrier will provide a release of any potential subrogation claims once it has been reimbursed by the workers' compensation carrier for those medical benefits already paid for by the group carrier. Consequently, we see no merit in the claimant's argument on appeal that the requirements of Ark. Code Ann. § 11-9-411(c)(1) render impossible the dollar-for-dollar offset provided to the workers' compensation carrier under Ark. Code Ann. § 11-9-411(a).
The claimant's brief next argues on appeal that if Ark. Code Ann. § 11-9-411 is construed to allow an offset for disability or medical benefits paid by the employee, that provision is unconstitutional. On this point, the claimant's brief asserts:
The statute in question does not state the basis for its enactment, but it could be inferred that it was intended to foreclose a duplication of benefits or to return the workers' compensation system to a state of economic viability as set forth in A.C.A. § 11-9-101(b). However, such a reason is not a rational basis for denying claimant his constitutional right to receive full disability benefits, as well as full medical expense benefits as provided in A.C.A. § 11-9-519—520 and § 11-9-508. Instead, it is an arbitrary and capricious exercise of government power that is not rationally related to achieving any legitimate objective of state government and is therefore unconstitutional.
As stated above, we find that the claimant in this particular case has no standing to challenge the constitutionality of Ark. Code Ann. § 11-9-411 as applied to disability benefits since the claimant has not been awarded any disability compensation in this case. Likewise, as discussed above, we do not understand the purpose of Ark. Code Ann. § 11-9-411 as applied to medical payments to be intended solely to eliminate duplication of benefits or to return the workers' compensation system to a state of economic viability. To the contrary, we understand the provisions of Section 411 to protect third-party payors of medical benefits, and to provide a means for those third-party payors to recover their payments from the workers' compensation carrier who is ultimately liable for payment of those medical benefits under the statutory provisions cited by the claimant's brief. We find that Ark. Code Ann. § 11-9-411 is rationally related to a legitimate governmental interest in providing a means for third-party payors of medical benefits to recover their payments from the workers' compensation carrier who is obligated under the workers' compensation law to pay for those medical benefits, as well as a legitimate governmental interest in controlling insurance costs by eliminating the double recovery of medical costs that the claimant apparently seeks in the present case. We point out that, by explicitly providing a means for reimbursement to group carriers from workers' compensation carriers for injuries ultimately determined to be work related, Section 411 also appears to, at least in part, remove a dis-incentive group carriers might otherwise have had under prior law to avoid making any medical payments until after an injury has been adjudicated either work related or nonwork related.
Therefore, after conducting a de novo review of the entire record, and for the reasons discussed herein, we find the claimant has failed to establish that the provisions of Ark. Code Ann. § 11-9-411 are unconstitutional, and we find that the provisions of Ark. Code Ann. § 11-9-411 apply to the payments of medical benefits awarded by the Administrative Law Judge. The Administrative Law Judge's decision in this regard is therefore affirmed.
IT IS SO ORDERED.
______________________________ ELDON F. COFFMAN, Chairman
______________________________ JOE E. YATES, Commissioner
Commissioner Turner dissents.