Missouri: Court Finds No Automatic Attorney’s Fee When a Comp Carrier Pays a Disputed Medical Bill

Is an attorney automatically entitled to a fee when disputed medical bills are paid after a comp claim is filed but before a hearing? The court of appeals affirmed a denial of attorney's fees for the bills but relied upon the limited evidentiary record in the case. Sterling v. Mid America Car, 2014 Mo. App. Lexis 1441 (lexis.com), 2014 Mo. App. Lexis 1441 (Lexis Advance) (Dec. 23, 2014).

Claimant incurred $38,462.07 in medical bills when he sought treatment for a burn injury and infection from hot slag. The employer eventually paid the bills directly to the provider at a 50% discount and agreed to hold claimant harmless but did not pay any attorney's fee.

The Commission adopted the opinion of the ALJ without a separate opinion.

An attorney is allowed a fee only to the extent allowed by the Commission. The Commission may award attorney's fees under 287.260.1 and 8 C.S.R. 50-2.010(15) for disputed medical bills. "If the services of an attorney are found to be necessary in proceedings for compensation, the administrative law judge shall set a reasonable fee considering relevant factors which may include, but are not limited to, the nature, character and amount of services rendered, the amount in dispute, and the complexity of the case and may allow a lien on the compensation due to the claimant."

The court noted that litigation undoubtedly led to securing payment of the medical bills. The court noted, however, the facts in the case did not establish an abuse of discretion. "The record before us does not establish, as a matter of law, that limiting Counsel's lien to 25% of the compensation award was so inadequate and so unreasonable as to constitute an abuse of discretion.... There is no evidence in the record, however, detailing Counsel's specific efforts to recover payment from Employer for Appellant's medical bills. Therefore, based upon the limited record before us and the amount of deference owed to the Commission, we cannot say that the denial of a 25% lien on the undiscounted medical bills amounted to an abuse of discretion." (emphasis added).

The court distinguished the case from Crowell v Hawkins, 68 S.W.3d 432 (Mo. App. 2001) in which the court awarded fees and costs based on a confession of judgment when the employer originally voluntarily paid benefits before a hearing. The award in Crowell was supported by statutory authority in 287.203 which authorized an attorney's fees when an employer had previously paid benefits and then terminated them.

Missouri comp is not governed by a statutory fee schedule. The original prices for medical services vary widely. The absence of a statutory medical fee schedule creates a strong disincentive for employers to deny cases and face potential liability for original charges which are routinely negotiated in accepted cases. Attorneys have less chance of high returns for taking the risk of a denied case if they cannot leverage medical bills at ‘original’ pricing. The court chastised the carrier to “escape liability” from the original charges by negotiating directly with the providers and depriving the “attorney’s ability to collect attorney’s fees…"

Missouri allows original bills to be awarded in disputed cases unless the employer can demonstrate personal liability has been extinguished. Farmer-Cummings v Personnel Pool of Platte County, 110 S.W.3d 818 (Mo. 2003). This rule creates numerous awards for the 'original' bills which workers can receive widely different awards. Sterling involves a novel situation in which personal liability has been extinguished but the attorney sought fees based upon payment of the original undiscounted charges. The Commission affirmed a finding that the claimant had not established entitlement in this case to fees from the original charges. The court of appeals did not address the issue.

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

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