MUNICIPALITY OF ANCHORAGE, Self-Insured Employer, Petitioner,
v.
JEFFERY D. HURD, Employee, Respondent.
AWCB Decision No. 21-0017
AWCB No. 201910727
Alaska Workers Compensation Board
February 26, 2021
FINAL
DECISION AND ORDER
William Soule, Designated Chair.
Employer
Municipality of Anchorage’s September 17, 2020 petition
to recover its lien from an injured worker’s
third-party settlement was heard on January 28, 2021, in
Anchorage, Alaska, a date selected on December 8, 2020. A
November 10, 2020 hearing request gave rise to this hearing.
Attorney Martha Tansik appeared and represented Employer.
Attorney William Dennie Cook appeared and represented Jeffery
D. Hurd (Employee) who appeared and testified. Employer
objected to the panel considering Employee’s brief
because it was not filed timely; an oral order sustained the
objection. This decision examines the oral order to not
consider Employee’s brief and decides Employer’s
petition on its merits. The record closed when the panel
deliberated on February 5, 2021.
ISSUES
Employer
contended Employee’s hearing brief was filed and served
late. Consequently, it sought an order precluding the panel
from considering it.
Employee
did not deny his hearing brief was late and offered no
mitigating explanation. An oral order sustained
Employer’s objection and decided the panel would not
consider the brief.
1) Was
the oral order to not consider Employee’s hearing brief
correct?
Employer
contends it is entitled to recover its statutory
workers’ compensation lien in full from Employee, who
settled a civil action against a third party responsible for
his work-related motor vehicle accident. It contends the lien
includes all costs to “administer benefits,” less
its share of Employee’s prorated attorney fees and
costs. Employer also seeks an order determining its credit.
Employee
contends Employer’s lien is the gross allowable sum
determined on the date he settled his third-party case. He
further contends Employer’s lien may not include
“unnecessary and unreasonable” administrative
costs that were not benefits actually paid to him.
2) Does
Employer’s third-party lien include all administrative
costs, do such costs affect the §015(g) credit, and on
what date is the lien determined?
Employer
contends Employee’s refusal to reimburse its statutory
lien amounts to “bad faith.” It seeks an
equitable remedy -- reducing Employee’s
attorney’s fees.
Employee
did not express a position on this issue. This decision
assumes he opposes.
3) May
this decision equitably reduce Employee’s third-party
attorney fees?
Employer
contends Employee refused to reimburse its full lien from his
third-party settlement. It seeks an order directing him to
pay the lien and contends the panel has subject matter
jurisdiction under the Act to enter such an order.
Employee
has no objection to the panel issuing an order for him to
reimburse the lien, once it is properly determined. He
offered no position on the panel’s jurisdiction to do
so.
4) Does
this decision need to reach issues over the panel’s
subject matter jurisdiction to order Employee to reimburse
Employer’s lien?
FINDINGS
OF FACT
A
preponderance of the evidences establishes the following
facts and factual conclusions:
1) On
August 8, 2019, a motor vehicle collision injured Employee
while he was on the job as a project engineer for Employer.
(First Report of Injury, August 12, 2019; Employee).
2) On
November 5, 2019, John Chiu, M.D., performed lumbar spine
surgery on Employee in California. (Operative Report,
November 5, 2019).
3) On
July 2, 2020, after Employee had retained Cook who had begun
negotiating with the third-party who had injured Employee,
Cook and he signed an agreement about Employee’s
third-party case. They agreed its pending settlement and
Cook’s 331/3 percent fee agreement with Employee were
subject to the “eventually agreed to” lien that
would be deducted under AS 23.30.015(g) and the
Cooper Alaska Supreme Court opinion. Employee and
Cook agreed to deposit no less than $200,000 into
Cook’s trust account “until an agreement has been
executed between Employee” and Employer for
“disbursement of funds equal to the finally agreed to
sum of the [workers’ compensation] lien.” It is
unclear who wrote this agreement or whether Employer or its
representative ever signed it. (Employer’s Hearing
Brief, January 21, 2021, Exhibit B).
4) On
July 13, 2020, Tansik sent Cook an email approving
Employee’s acceptance of a policy limits settlement
plus “add-ons” in his third-party case, and
stating in part:
We request that you place all funds remaining after
attorneys (sic) fees and costs are taken out in the Trust
account. I estimate this at somewhere around $230,000. There
are obvious credit issues under AS 23.30.015 that need to be
addressed along with the final lien resolution amount.
In the meantime, you expressed that you didn’t believe
that NCM’s [nurse case managers] were included in the
lien amount. Please provide statutory or case authority
reasoning for that.
It is my position that they are because all medical treatment
fees that are paid under the Act are repayable under the
lien. NCMs fit within the scope of AS 23.30.095 for ensuring
care coordination and medical management to improve outcomes.
AS 23.30.095 requires payment of “(a) . . . medical,
surgical, and other attendance or treatment, nurse and
hospital service, medicine, crutches, and apparatus for the
period which the nature of the injury or the process of
recovery requires. . . .” The facilitative services of
a Nurse Case Manager fall squarely within this definition of
nurse “services.” In fact, the American Case
Management Association’s definition of “case
management” appears to support this position:
“Case Management -- in hospital and healthcare
systems is a collaborative practice model including patients,
nurses, social workers, physicians, other practitioners,
caregivers and the community. The Case Management process
encompasses communication and facilitates care along a
continuum through effective resource coordination. The goals
of Case Management include the achievement of optimal health,
access to care and appropriate utilization of resources,
balanced with the patient’s right to
self-determination.” I have never seen a case that
did not include repayment for those services. (Tansik email,
July 13, 2020; italics in original).
5) On
December 8, 2020, the parties stipulated to file and serve
their hearing briefs by January 21, 2021. The designee
referenced 8 AAC 45.114, which gives the parties instructions
about filing hearing briefs, and required the parties to file
and serve them by January 21, 2021, notwithstanding their
stipulation. (Prehearing Conference Summary, December 8,
2020).
6) On
January 8, 2021, Employer filed and served evidence upon
which it relied at hearing. Included was Samuel Ward’s
affidavit; he is responsible for adjusting Employee’s
claim. Ward said Employer is self-insured and must pay both
Second Injury Fund (SIF) and Workers’ Safety
Compensation and Contribution Amount (WSCAA) service fees
pursuant to statute. According to Ward, these payments
“are based on the amounts of indemnity and medical
benefits paid, not including other expenses.” Based on
Employer’s spreadsheet, Ward stated to date, it had
paid $75,095.94 in indemnity benefits and $151,392.23 in
medical benefits totaling $226,488.17 in benefits subject to
Employer’s SIF and WSCAA statutory obligations. Due to
the time and manner in which SIF and WSCAA benefits are paid,
Ward said some of these payments were not included in
Employer’s January 7, 2021 “lien register.”
Accordingly, $9,086.01 for additional SIF and WSCAA payments
had to be added to the spreadsheet, bringing Employer’s
§015 lien total to $288,814.87; this is the amount
employer seeks to recover from Employee’s third-party
settlement. Among the documents attached to Employer’s
January 8, 2021 evidentiary filing was Employer’s nine
page January 7, 2021 spreadsheet showing “Claimant
Bills/Compensation” for Employee’s case. The
following spreadsheet shows by relevant columns and category,
amounts Employer claims in its §015 lien:
Table
I
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