Insurance Co. of North America v. Workmen's Compensation Appeal Board

586 A.2d 500, 137 Pa. Commw. 393
CourtCommonwealth Court of Pennsylvania
DecidedJune 11, 1991
Docket1986 C.D. 1989
StatusPublished
Cited by30 cases

This text of 586 A.2d 500 (Insurance Co. of North America v. Workmen's Compensation Appeal Board) is published on Counsel Stack Legal Research, covering Commonwealth Court of Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Insurance Co. of North America v. Workmen's Compensation Appeal Board, 586 A.2d 500, 137 Pa. Commw. 393 (Pa. Ct. App. 1991).

Opinions

OPINION

BARRY, Senior Judge.

The Insurance Company of North America (the insurer) appeals an order of the Workmen’s Compensation Appeal Board (Board) which, by an equally divided vote, affirmed a decision of a referee denying the insurer’s request for [395]*395reimbursement of overpayments of medical expenses made in behalf of Gail Kline (the claimant in this case).

The insurer was paying both wage loss benefits and medical expenses of the claimant pursuant to a notice of compensation payable after she had injured her back at work. Sometime later after examining the claimant and believing that she had recovered, the employer and the insurer filed a petition for suspension or modification, alleging therein that the claimant was able to return to work. In connection with that petition, the employer and the insurer requested a supersedeas to allow the cessation of all benefits. That request was denied. Hearings were held on the insurer’s petition to suspend or modify.1 Both sides presented medical evidence and the referee chose to believe the insurer’s experts who testified that the claimant was no longer suffering from any work related injuries. The referee concluded that “on or after April 12, 1982, the medical and hospital care provided to the claimant to treat the work related injury was neither necessary nor reasonable.” (Conclusion of law No. 2, Referee’s decision, 10/22/86).

The insurer then filed a request for reimbursement from the Supersedeas Fund2, seeking to be repaid $21,656.93 in wage loss benefits and $23,286.72 in medical expenses paid after April 12, 1982. The referee permitted recovery of the wage loss benefits; for reasons other than those involved here, the referee denied reimbursement of medical expenses. The insurer then sought review from the Board, which split three-three on the issue. Being equally divided, the order of the referee was affirmed. The insurer has now appealed to us.

The issue, like the facts, is not complicated. Does “compensation” in Section 443 of the Act include medical expenses? That section provides:

[396]*396(a) If, in any case in which a supersedeas has been requested and denied under the provisions of section 413 or section 430, payments of compensation are made as a result thereof and upon final outcome of the proceedings, it is determined that such compensation was not, in fact, payable, the insurer who has made such payments shall be reimbursed therefor.

77 P.S. § 999. The insurer argues that compensation includes both medical expenses and wage loss benefits while the Department of Labor and Industry, representing the Fund, espouses the view that compensation does not include medical expenses.

We note initially that this precise question is one of first impression. At first blush, the existing case law in related areas seems capable of supporting either result. Shortly after the first world war, the Supreme Court held that compensation did not include medical expenses. Paolis v. Tower Hill Connellsville Coke Co., 265 Pa. 291, 108 A. 638 (1919).

The Superior Court later held that Paolis was not dispositive and held that the meaning of the term compensation vis a vis medical expenses depended on the section of the Act where that term was being used. Haley to Use of Martin v. Matthews, 104 Pa.Superior Ct. 313, 158 A. 645 (1932). Despite paying lip service to Paolis, the court concluded that for purposes of Section 319 (dealing with subrogation) compensation included medical expenses. In Haley, an insurer was asserting its subrogation rights against a third party tortfeasor. The trial court, relying upon Paolis, held that compensation did not include medical expenses, but the Superior Court reversed, explaining:

The legislature evidently intended that, where a third person is responsible for an injury to the employee the employer, who has been subrogated to the employee’s right, is substituted, not to a portion of, but to all, his rights, until he is reimbursed for whatever sums he was required to pay the employee under the Compensation Act. There appears to be no sound reason why an [397]*397employer should be obliged to pay medical and hospital expenses, when he is in no way responsible for the injury, and the wrongdoer escape the liability therefor. The wrongdoer would thus profit at the expense of the employer. In an action at law, the wrongdoer would undoubtedly be liable for medical and hospital expenses; they are proper elements of damages. We are dealing with an equitable doctrine. It rests on the principle that, if one is compelled to pay money through another’s neglect, a recovery may be had.

Haley, 104 Pa.Superior Ct. at 316-17, 158 A. at 646 (emphasis added).

We recognize that there are significant differences between our case and Haley. Subrogation has always been an equitable principle; the fund, a creature of statute, cannot claim such historical underpinnings. Furthermore, in the present case, there is no wrongdoer equivalent to the third party tortfeasor; there is a claimant who has received something to which she was not entitled. We nonetheless believe that Haley is important in that it shows that a common sense approach must be taken in these questions of statutory interpretation.

We recognize one glaring instance in which the Legislature has differentiated between medical expenses and wage loss benefits. Section 306(f) of the Act,3 77 P.S. § 531, deals specifically with the question of medical expenses. This section has been amended a number of times since the Act’s original enactment. We recently discussed in detail the history of this section. See Fuhrman v. Workmen’s Compensation Appeal Board (Clemens Supermarket), 100 Pa.Commonwealth Ct. 577, 515 A.2d 331 (1986). For our present purposes, the most recent amendment must be considered. The Act of July 1, 1978, P.L. 692, rewrote the section and included the following: “The payment by an insurer for any medical, surgical or hospital services or supplies after any statute of limitations provided for in this [398]*398act shall have expired shall not reopen or review the compensation rights for purposes of such limitations.” 77 P.S. § 531(5) (Supp.1990-91). As Judge Doyle explained in Fuhrman, the amendments to this section have been made to permit a claimant to recover for medical expenses from a work related injury no matter when those expenses are incurred, with the burden presently on the employer to prove that medical expenses incurred are either unnecessary or unreasonable. Id.

We fail to see any particular relevance in the Legislature’s amendment in Section 306(f) to the present controversy. The distinction there is intended to codify the recognition that an injured worker is entitled to payment for medical expenses from a work related injury, even where that injury is no longer “disabling” within the meaning of the Act. In the present case, there are simply no rights of an injured worker which are involved; the present case involves only the question of an insurer’s right to reimbursement from the Supersedeas Fund of non-work related medical expenses for which it was required to pay after its request for a supersedeas had been denied.

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586 A.2d 500, 137 Pa. Commw. 393, Counsel Stack Legal Research, https://law.counselstack.com/opinion/insurance-co-of-north-america-v-workmens-compensation-appeal-board-pacommwct-1991.