In Ulrich, the Maryland Court of Special Appeals held that a Workers’ Compensation Employer could not recover its statutory lien for medical expenses paid from the settlement proceeds of a related medical malpractice case where the medical expenses incurred were not related to the alleged malpractice.
In that case, the Claimant, Charles Ulrich, suffered a compensable work-related injury in the course of his employment with Baltimore County when he injured his left elbow while lifting a heavy trash receptacle. The Claimant was initially treated by Concentra, who diagnosed Claimant with a strain of the left biceps and cleared the Claimant to return to work with restrictions. The Claimant continued to experience left elbow pain and, five (5) weeks after the subject incident, was seen by a hand specialist who determined that the Claimant suffered a complete tear of the left distal biceps tendon and promptly underwent surgery to repair the same. In total, Baltimore County paid $17,152.42 in medical expenses in addition to temporary total disability benefits.
The Claimant subsequently filed a medical malpractice action against Concentra related to the misdiagnosis. In the malpractice action, Claimant’s expert opined that if the surgery had been performed within four (4) weeks of the injury, the Claimant would have essentially returned to his pre-injury state. However, the misdiagnosis, which directly resulted in the delay of the surgical procedure, caused lifelong decreased strength and endurance of the Claimant’s arm. The Claimant did not seek medical expenses in the malpractice case as there was no contention that the malpractice caused additional medical treatment; only that the malpractice caused permanent decreased strength and endurance of the left arm.
The medical malpractice action ultimately settled and Claimant sent a check to Baltimore County for the amount of temporary total disability benefits paid less its proportionate share of fees and expenses. Baltimore County rejected the payment, arguing that it was also entitled to reimbursement of the medical expenses paid in addition to the temporary total disability benefits.
Baltimore County filed issues in the Maryland Workers’ Compensation Commission for recovery of the medical expenses paid as well as the temporary total disability benefits paid. The Claimant argued that Baltimore County was not entitled to recovery for the medical expenses paid because the Claimant did not seek or recover medical expenses in the medical malpractice action because the treatment the Claimant received was necessary irrespective of medical malpractice. Baltimore County agreed that the medical malpractice did not result in additional medical treatment, but instead argued that the plain language of Lab. & Emp, 9-902(e) requires that an employee who recovers from a negligent third party must reimburse the employer for any amounts paid for medical services.
The Workers’ Compensation Commission ruled in favor of the Claimant. Baltimore County noted a timely appeal to the Circuit Court for Baltimore County who also found in favor of the Claimant. Baltimore County noted a timely appeal to the Court of Special Appeals.
The Court of Special Appeals, after reviewing the statutory language, case law and legislative history of Lab. & Emp, 9-902(e), determined that the purpose of the article was to ensure that an injured employee could not double dip benefits from both a Workers’ Compensation Claim and a related negligence claim, but also to ensure that an at-fault party would be held responsible its negligence. It further determined that the plain language of Lab. & Emp, 9-902(e) referred to a “third party who is liable for the injury or death of the covered employee.” In so stating, the Court found that the workplace injury and the related need for surgery all occurred before the medical negligence and therefore the proceeds from the settlement from the medical negligence case, which did not include damages for medical expenses, could not be recovered by Baltimore County for the medical expenses it paid. The Court further noted that, in the present case, if Baltimore County were entitled to recover medical expenses from the medical malpractice settlement, Baltimore County would receive a windfall as it would be recovering medical expenses from a party that could not be found liable for the medical expenses. The Court found that such a result would be in opposition to the purpose and express language of Lab. & Emp, 9-902(e).
The Court’s holding in Ulrich merely solidifies the longstanding Maryland law with regard to damages that they must be causally-related to a party’s negligence. As none of the medical care provided to the Claimant was related to the medical negligence at issue, it stands to reason that Baltimore County could not recover from the proceeds of the medical negligence settlement the medical expenses paid for by Baltimore County. This holding in no way affects the ability of an employer or insurer to recover indemnity benefits and medical expenses paid from a negligent third party that caused a work-related injury.