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Work comp law doesn’t define no-fault benefits

A decision by a workers’ compensation insurer to cut off payment for chiropractic care doesn’t mean the no-fault insurance carrier is off the hook, the Court of Appeals ruled last week in Rodriguez v. State Farm Mutual Insurance Co.

The no-fault act serves as an exception to the workers’ compensation statute, the court said.

The decision resolves a split in Minnesota district courts, which had ruled both ways on the issue, said appellant’s attorney Matthew Barber. It stops the insurer from using workers’ compensation parameters to define coverage limits, which makes no sense, he said. “It’s like calling a strikeout when you’re playing hockey,” Barber said.

The court reversed a District Court order granting State Farm’s motion to vacate an arbitration award.

Attorneys for State Farm could not be reached for comment.

Parameters of coverage

Appellant was injured when a stolen vehicle crashed into the school bus she was driving for her employer. The workers’ compensation carrier paid for 12 weeks of chiropractic treatment and then decided not to continue because additional treatment was not indicated in the workers’ compensation parameters.

Rodriguez then sought treatment at a different clinic and made an uninsured-motorist claim to her personal insurer, the respondent. Respondent failed to pay the bills and the appellant filed a petition for no-fault arbitration. The arbitrator ruled in Rodriguez’s favor, and the insurer sought to vacate the award on the grounds that the arbitrator exceeded her authority.

Neither the Department of Labor and Industry nor a compensation judge has ruled on whether the appellant is entitled to additional workers’ compensation benefits.

The District Court judge concluded that the plain language of Minn. Stat. § 176.83, subd. 5(c) (2016) precluded no-fault benefits and granted the motion to vacate the award. The Court of Appeals reversed.

Minnesota Statute sec. 176.83 calls for rules establishing standards and procedures for health care treatment. Under these rules, chiropractic care is generally limited to 12 weeks, although the rules allow for more time if necessary.

The workers’ compensation insurer relied on the rule to terminate payment after 12 weeks, determining that additional treatment was excessive.

The workers’ compensation insurer determined that additional chiropractic treatment was excessive because treatment beyond 12 weeks was not indicated by the standards established by Minn. R. 5521.6200, subd. 3(A). Thus, because neither the commissioner of labor and industry nor a compensation judge determined that chiropractic treatment beyond 12 weeks was not excessive under the rules, Minn. Stat. sec. 176.83, subdivision 5(c), provides that the workers’ compensation insurer need not pay the chiropractor.

The statute also says that after 12 weeks, the provider shall not seek payment from any other source, including another insurer, unless the commissioner of the department or a compensation judge rules that the treatment was excessive. If that ruling is made, the payment is due from the workers’ comp insurer. State Farm was “another insurer,” the District Court judge said.

The Court of Appeals disagreed. “Although we agree that, when considered in isolation, the plain language of section 176.83, subdivision 5(c), provides that Core Health Chiropractic shall not be reimbursed by any insurer, this case involves the interplay between the workers’ compensation act and the Minnesota No-Fault Act, and the district court’s plain-language construction of section 176.83, subdivision 5(c), conflicts with provisions of the no-fault act,” wrote Judge Randolph Peterson.

No-fault exception

The correct analysis, the Court of Appeals said, is that no-fault insurance provides for payment of economic loss benefits, including chiropractic services. “Thus, under the no-fault act, because, during arbitration, State Farm did not dispute that the chiropractic services that Rodriguez received were reasonable and necessary, Rodriguez is entitled to reimbursement for the expense of the services,” the court said.

With a determination that Rodriguez is entitled to more than 12 weeks of benefits workers’ compensation Minn. Stat. sec. 65B.61 would be the primary source of payment, the court continued. But under Minn. Stat. sec. 65B.54, subd. 3, the appellant’s claim for basic economic loss benefits must be paid without a deduction for the workers’ compensation benefits because those benefits have not been paid and her basic economic loss benefits are overdue. If it is determined that Rodriguez is entitled to workers’ compensation benefits, State Farm is entitled to reimbursement from Old Republic or Rodriguez for the amount that should have been subtracted from Rodriguez’s basic economic loss benefits.

Thus the ruling that State Farm cannot be required to pay Rodriguez’s chiropractor conflicts with the provisions in the no-fault act that require the no-fault insurer to pay for services without deduction for workers’ compensation benefits.

In the case of such a conflict, Minn. Stat. sec. 645.26 says that special provisions in the law take precedent over general provisions. “The general provision states that State Farm shall not reimburse [the chiropractor] for the treatment, and the special provisions require State Farm to pay for the treatment, and the provisions cannot be construed to give effect to both,” wrote Peterson.

But, importantly, if the general provision was enacted after the special provision and the Legislature has “manifested its intention” that the general provision should prevail, the court should give effect to it, the statute says. The court agreed that the no-fault act was enacted in 1974 and the workers’ comp law was enacted in 1983.

“But we have found no basis to conclude that the legislature intended the general provision in the workers’ compensation act to prevail over the special provisions of the no-fault act when an insured driver seeks no-fault benefits. Consequently, we must construe the special provisions of the no-fault act as an exception to section 176.83, subdivision 5(c),” Peterson continued.

State Farm would be entitled to reimbursement from the workers’ compensation insurer if it is later determined that the chiropractic treatment was not excessive, the court said. And if it is determined that it was excessive, State Farm would be obligated to pay the benefits.

“In either situation, Rodriguez will have received prompt payment of medical benefits to which she was entitled, which is consistent with the legislature’s intended purposes of both the no-fault act and the workers’ compensation act,” the court concluded.

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One comment

  1. Yet Another State Farm Classic, putting No Fault Medical Care due an insured injured worker second to State Farm’s questionable legal claim. Worker’s Comp No Fault Fiction where insurer administrative and legal costs well exceed Medical Care Costs for the injured workers. The Worker’s Comp system is better at serving suits and paying suits, than injured worker’s medical needs.

    The State Legislature needs to resolve these matters with a overhaul of this failed system which is efficient in collecting premiums from employers, but anything other than “No Fault” in serving workers injured on the job. Lawyers and IME Doctors serving insurers are running the works comp show, just like they do at the Court House in the Civil Trial system; so fix it or end the legal fiction on No Fault Worker’s Compensation. Neither Employers or the injured workers can afford the financial costs and personal losses of two broken systems that enrich lawyers and their IME Doctor Partners who are walking away with millions of dollars intended to provide medical care without going to court…how ironic!

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