Recent Case of Interest: Medicos Pain and Surgical Specialists, S.C. v. Travelers Indem. Co. of America, 2018 IL App (1st) 162591
A recent appellate court decision decided the issue of whether medical providers can file a separate cause of action to seek interest for the late payment of medical bills, and more generally, whether medical providers in a workers’ compensation claim are members of the class for whose benefit the Workers’ Compensation Act was enacted. According to the Appellate Court, First District, medical providers are not protected members under the Act.
Section 820 ILCS 305/8.2(d) of the Workers’ Compensation Act provides that late payments to a medical service provider shall incur interest at a rate of one percent per month payable to the provider. Medicos Pain and Surgical Specialists, SC (Medicos) and Ambulatory Surgical Care Facility, LLC (Ambulatory) provided surgical care to a machine operator who was injured at work. They had to wait several years for payment from the petitioner’s employer. The arbitrator in the underlying workers’ compensation claim awarded Medicos $29,708 and Ambulatory $38,554 for the payment of outstanding medical bills, years after the bills were incurred. When the petitioner received the awarded payment from the insurance carrier, petitioner remitted payment to Medicos and Ambulatory. The petitioner in the underlying workers compensation claim never sought enforcement of the interest provisions of Section 8.2(d) of the Act and the providers never received any interest payment for the delay in payment of their bills.
Medicos and Ambulatory then filed a lawsuit against the insurance carrier and the respondent in circuit court, seeking interest accrued due to the delay in payment of their medical bills. The circuit court case proceeded to a bench trial solely on the issue of whether Medicos and Ambulatory were entitled to interest for the delay in payment. The circuit court awarded interest for the delay in payment. The employer and its insurer sought appeal.
According to the appellate court, a party may assert a right to be compensated for the violation of a statute only if a private right of action was authorized by the legislature. There is no language in the Act expressly authorizing a private right of action for medical providers to collect interest for late payment, according to the appellate court. The court noted that “the interest payment mandated by Section 8.2(d)(3) of the Act is but one of the many provisions in the Act designed to encourage the ‘prompt’ payment of compensation. While providers might receive some benefit from the specific interest provision contained in section 8.2(d)(3) of the Act, that benefit is at most incidental and was provided solely in an effort to serve the legislature’s primary goal of compensating employees completely and promptly.” Citing to Marque Medicos Fullerton, LLC v. Zürich American Insurance Co., 2017 IL App (1st) 160756.
The court held that the plaintiff medical service providers failed to state a claim upon which relief could be granted. The Act, the court found, was not enacted for the benefit of medical providers. As noted above, it is well-established that the fundamental purpose of the Act is to protect employees by providing them with prompt and fair compensation for work-related injuries, regardless of fault. Medical providers cannot file suit to collect interest on late payment of medical bills even though the payment obligations of Section 8.2(d) were to be made to medical service providers and no one else. The appellate court held that the trial court erred in awarding the statutory interest and vacated the trial court’s judgment.
Although some medical providers are becoming aggressive in pursuing payment of their bills and seeking interest for late payment, the Appellate Court, First District, has now made it clear that they are not a protected class under the Workers’ Compensation Act and medical providers cannot file separate suit for interest for late payment. While this decision does not mean that medical providers are not entitled to interest for late payment, it is clear that they are not able to file suit to collect that interest. The interest must be awarded in the underlying workers’ compensation claim and the petitioner must seek the interest. Based on this decision, we can expect that more petitioner’s attorneys will seek interest for late payment of medical bills during workers’ compensation trials and we expect medical providers to be urging the petitioner’s bar to do so.