Texas: Recoupment

Texas: Recoupment

Stuart Colburn   By Stuart D. Colburn, Esq., Shareholder, Downs Stanford
This case [
AP 110692] concerns the carrier’s right to reclassify overpaid TIBs as IIBs.

In this case, the Hearing Officer cited Appeals Panel Decision 033358-S [2004 TX Wrk. Comp. LEXIS 207] to hold a carrier could not redesignate overpaid TIBs as IIBs.  The carrier continued to pay temporary income benefits after the treating doctor certified maximum medical improvement.  The carrier sought to redesignate the post MMI TIBs paid as IIBs. 

APD 033358-S [2004 TX Wrk. Comp. LEXIS 207] has been highly controversial.  Previously, the Appeals Panel stated an injured worker was entitled to income benefits under the Act – “no more, no less.” 

The Division passed new Rule 128.1 which allowed the carrier to recoup from TIBs payments made due to an inaccurate average weekly wage.  The intent of the rule was to expand the situation where a carrier could recoup overpaid benefits.  Previously, the Appeals Panel allowed a recoupment of overpaid income replacement benefits such as TIBs only from IIBs.  New Rule 128.1 expanded recoupment allowing a carrier to recoup overpaid TIBs from TIBs. 

However, APD 033358-S [2004 TX Wrk. Comp. LEXIS 207] stated the new Rule 128.1 overturned all Appeals Panel decisions regarding recoupment.  Appeals Panel and Hearing Officer’s decisions subsequently limited recoupment to Rule 128.1.  Carriers were no longer allowed to reclassify or redesignate overpaid TIBs from IIBs.  (This holding was inconsistent with DWC’s Electronic Data Interchange Guide adopted by DWC Rule which specifically allows a redesignation of overpaid TIBs when there is a previous certification or a change in the certification of IIBs.)

AP 110692 distinguishes “recoupment” and “redesignation” of benefits.  In this case, the Appeals Panel stated TIBs are due until the claimant reaches maximum medical improvement pursuant to Texas Labor Code §408.102(a).  IIBs begin on the day after maximum medical improvement pursuant to Rule 130.8(a).  The claimant became entitled to IIBs on the day after maximum medical improvement.  TIBs paid after this date shall be redesignated as IIBs and therefore the carrier can take credit for benefits paid.

Texas legislature recently passed legislation which specifically allows recoupment of overpaid benefits.  The Division is currently holding informal meetings to develop the rule implementing the statute.

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