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Workers’ Compensation Update: Recouping Workers’ Compensation Costs In A Subsequent Medical Malpractice Case

January 14, 2016
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by Paul Clouser

Suppose an employee with a work-related knee injury needs a total knee replacement.  During surgery, however, the popliteal artery is inadvertently severed, leading to a medical malpractice claim against the operating doctor and the hospital where the surgery took place.  Is the employer legally obligated to continue paying workers’ compensation wage loss and medical benefits attributable to the botched surgery?  Can the employer “subrogate” or recover workers’ compensation (“WC”) benefit payments that are directly attributable to the “malpractice injury,” which necessitates an additional surgery and period of convalescence?

On January 6, 2016, the Commonwealth Court answered both of the above questions in the affirmative, in the case of Protz v. WCAB, No. 402 C.D. 2015.  Those who have been paying attention to our blog posts, will recognize an earlier holding from the same Protz case – namely, that an impairment rating evaluation performed under a later edition of the AMA Guidelines to  the Evaluation of Permanent Impairment (Fourth Edition) is considered invalid.  Protz II, which is completely unrelated to Protz I, deals with an issue presented by Section 319 of the WC Act and Section 508 of the Medicare Care Availability and Reduction of Error Act (MCARE Act), passed in 2002.  Section 508 of the MCARE Act precludes a plaintiff in a medical malpractice action from recovering damages for medical expenses or lost earnings incurred prior to trial, to the extent those losses are covered by a “private or public benefit or gratuity.”  Although WC payments are clearly a “private or public benefit or gratuity,” the Court found that the malpractice settlement in this particular case related to future medical expenses and wage loss, directly attributable to the surgical complication, and the third party recovery was therefore subject to subrogation.

In this regard, the employee’s own medical expert in the malpractice action opined that she had sustained a significant neurovascular injury (i.e. the artery laceration) and that the entirety of her symptom complex at present is a direct result of this complication.  Further, her disability at the present time is solely related to a regional pain syndrome, directly attributed to the vascular injury and had there been no such complication, she would be back to work at her usual and customary employment.

Given this factual background and since the damages plaintiff recovered in the third party case were for future (not past) wage loss and medical expenses, the Court had little difficulty in finding that although workers’ compensation covers complications incurred during work-related medical treatment, the employer may indeed seek reimbursement of amounts paid, both in wage loss and medical expense, that are directly related to a subsequent “medical injury.”

This case has important financial implications for employers seeking to control workers’ compensation costs, by recovering payments attributable to medical errors.

RELATED PROFESSIONALS

Paul D. Clouser

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Labor and Employment