Occasionally, an injured worker’s medical treatment will be covered by his/her group health insurance, rather than through the employers’ workers’ compensation insurance. This may happen if the initial medical provider (e.g., emergency room, walk-in clinic) did not have the workers’ compensation insurance information at the time of treatment and uses the information on the employee’s group medical card, or if the claim has been denied and the employee uses group health insurance to pay for treatment.
Once the group health carrier becomes aware such treatment should or could be covered by workers’ compensation, the company will send out a “lien letter,” “subrogation letter,” or “statement of benefits,” which purports to set forth the amounts paid by the group carrier for treatment ostensibly related to the employee’s work accident.
We have recently seen that such lien and subrogation notices from group carriers have begun to claim the lien is the “total benefit provided” to the insured patient, and the letter seeks reimbursement for this “total benefit provided.” Be forewarned, however: the “total benefit provided” may be an amount greater than what the carrier actually paid to the listed medical providers. In this manner, the group carrier attempts to take advantage of contractual discounts negotiated for the group plan to its benefit, which would result in unjust enrichment.
The Illinois Workers’ Compensation Act limits an employer’s liability for medical treatment to the lesser of the amount billed, the fee schedule amount or the negotiated rate, which the courts have found can be the rate negotiated by a group carrier. Perez v. Illinois Workers’ Compensation Comm’n., 96 N.E.3d 524, 526 (Ill. App. Ct. 2nd Dist. 2018). Illinois law limits the lien to the amount paid or the out-of-pocket costs incurred by the group provider. Overlin v. Windmere Cove Partners, Inc., 756 N.E. 2d 926, 929 (Ill. App. Ct. 2nd Dist. 2001); see also N.C. ex rel. L.C v. A.W. ex rel. R.W., 713 N.E.2d 775, 776 (Ill. App. Ct. 2nd Dist. 1999).
When negotiating a lien or subrogation claim with a group carrier, if the lien or statement of benefits references a “total benefit provided” rather than an amount paid, demand the carrier provide you with its actual out-of-pocket cost, or the amount actually paid. It’s important to make sure you do not pay more than you are obligated to pay under the Workers’ Compensation Act, which is what may happen if
If you encounter this situation and need assistance, please do not hesitate to reach out to any of the attorneys at Ganan & Shapiro for assistance.