Court clarifies motorist’s receipt of comp ‘benefits’

The U.S. District Court for the District of Maryland ruled Tuesday that the difference between the fair and reasonable value of health care services made necessary by an automobile accident and the amount paid by a workers compensation insurer is not a “benefit” recovered by the injured person under the workers compensation law.

Michael Gilliam suffered injuries in an automobile accident in 2017 while driving for work. He received workers compensation benefits from his employer’s insurer, including coverage for his medical bills, according to documents in Westfield Insurance Co. v. Gilliam.

The health care providers who treated Mr. Gilliam for his injuries generated bills in face amounts greater than the amounts set by the State Workers’ Compensation Commission, totaling $243,399.33. A health care provider that treats an injured individual under the Workers’ Compensation Act may not charge more than the amounts set by the commission.

The workers comp insurer paid $118,369.15, and the providers accepted the payments in full satisfaction for their services.

The comp insurer also paid Gilliam $510,316.47 in other benefits related to the accident. The carrier then asserted a statutory lien in that amount against any compensation related to the accident that Mr. Gilliam might recover from a third-party tortfeasor.

Mr. Gilliam recovered $30,000 from the tortfeasor’s motor vehicle insurer, and the comp insurer accepted one-third of that amount — $10,000 — in satisfaction of its lien.

Mr. Gilliam later sought to recover underinsured motorist benefits from the insurance policy covering the vehicle he was driving.

A dispute arose as to whether the difference between the amount of the medical bills and the payments made by the workers’ compensation insurer constitutes a “benefit” that Mr. Gilliam recovered that is to be offset against any recovery he would obtain from the underinsured motorist policy.

The issue was eventually moved to federal court, which wrote that it holds “that the difference between the amount nominally billed for Mr. Gilliam’s health care and the amount the WC insurer actually paid is not a ‘recovered benefit’ under (Maryland law).” 

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