MO: SIF Owes Interest on Medical Bills After an Award

MO: SIF Owes Interest on Medical Bills After an Award

If the Second Injury Fund must pay medical bills because an employer lacks insurance, when is the claimant allowed interest when the bills are not paid promptly?  Eason v Adams Towing Inc., DOLIR 7-19-11, is a Commission case of first impression to indicate when payments are "due" to trigger any interest.

Claimant fell about 15 feet off of a car carrier and required ORIF for a tibia fracture, resulting in $46,802 in medical bills.  The employer went into bankruptcy.  The employer's Oklahoma insurance policy did not apply to the accident which occurred in Missouri, and the administrative law judge found the second injury fund liable for unpaid bills pursuant to 287.220(5) because the employer was uninsured.  The administrative law judge awarded the medical bills with open medical but denied interest, a decision affirmed unanimously by the Commission.

The claimant asserted that 408.020 required the Fund to pay interest.  The Commission denied interest for two reasons:  the Fund was not a "debtor" until after an award, when the administrative law judge found that a debt was owed.  Second, the Fund's statutory obligation to pay medical bills was not mandatory, unlike employers.  The employer "shall" pay the bills under the mandate of 287.140.1.  The second injury fund, however, is not obligated by similar mandatory language and 287.220(5) provides that funds "may" be withdrawn.  The commission noted it was well-established that the Fund could owe for interest under certain circumstances, State ex rel Otte v State Treasurer, 182 S.W.3d 638 (Mo. App. 2005) but Eason addresses when the obligation arises:  an unpaid medical  bill is a debt "owed" only after an award.

Source: Martin Klug, Huck, Howe & Tobin. Read Martin Klug's Mo. Workers' Comp Alerts.

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