Summary
concluding the § 8's "payments due the employee" does not include payment of bills to medical providers
Summary of this case from DeFILIPPO v. UNIVERSITY OF MASS./AMHERST, NoOpinion
Board No. 03600090
Filed: September 11, 1995
REVIEWING BOARD DECISION
(Judges McCarthy, Fischel and Wilson)
APPEARANCES
John E. Jerzyk, Esq., for the employee.
Douglas F. Boyd, Esq., for the insurer.
Here we respond to appeals from two separate decisions filed by an administrative judge in this disputed case. In the first, the administrative judge ordered payment of weekly incapacity benefits under § 34, together with reasonable and related medical expenses under §§ 13 and 30. The insurer challenges this decision, contending that the judge committed reversible error by allowing leading questions over counsel's objections, and then relying on the medical expert's responses in order to find causal relationship. In its appeal of the second decision, the insurer contends that the judge committed an error of law by assessing a penalty under § 8(1) for the late payment of certain medical bills that were due and owing to medical providers. We affirm the first decision. We reverse the administrative judge in the second, as we find that the Legislature did not intend that § 8(1) penalties be assessed against insurers for the late payment of medical bills to providers.
The employee worked for the employer for eleven years until July 12, 1990, when he became incapacitated due to back, groin and thigh pain related to constant lifting on the job. (July 7, 1992 Decision [Dec. I] at 3) The employee's claim was not accepted by the insurer, and after a conference on May 14, 1991, the judge ordered payment of weekly incapacity benefits under § 34, along with medical benefits under § 30. The insurer appealed from the order and a full evidentiary hearing ensued. (Dec. I, 1)
The employee's treating physician, Dr. Noble Hanson, testified by way of deposition that the employee suffered from pre-existing avascular necrosis of the right hip with deformity of the femoral head, as well as a nondisplaced subchondral fracture, Dr. Hanson was of the opinion that the subchondral fracture started the collapse of the femoral head and accelerated the progress of the necrosis. The subchondral fracture was, in the opinion of Dr. Hanson, the result of lifting and shovelling at work. (Dec. I, 3-4) Dr. Hanson performed a hemi-hip replacement. The administrative judge adopted the opinion of Dr. Hanson with regard to causal relationship, and ordered that the insurer continue to pay benefits under §§ 34, 13 and 30 in a decision filed July 7, 1992. (Dec. I, 6-7)
Although the May 15, 1991 conference order had included the payment of medical benefits, the insurer did not pay for the employee's surgery and related expenses until after the receipt of the hearing decision in July,1992. The employee filed a claim for penalties pursuant to § 8(1), contending that the insurer owed the employee $10,000.00 for its failure to pay the medical bills within ninety days of its receipt of the May 15, 1991 conference order. The parties stipulated that the medical bills had not been paid within ninety days of their receipt by the insurer. (March 30, 1994 Decision [Dec. II] at 1) The judge denied the claim at conference, and it went to hearing on April 29, 1993. The judge found that the insurer had, in fact, violated § 8(1) by failing to pay the medical bills in a timely fashion, and ordered payment of $10,000.00 to the employee. (Dec. II, 4)
G.L.c. 152, § 8(1) provides, in pertinent part:
Any failure of an insurer to make all payments due an employee under the terms of an order, decision, arbitrator's decision, approved lump sum or other agreement, or certified letter notifying said insurer that the employee has left work after an unsuccessful attempt to return within the time frame determined pursuant to paragraph (a) of subsection (2) of this section within fourteen days of the insurer's receipt of such document, shall result in a penalty of two hundred dollars, payable to the employee to whom such payment were required to be paid by the said document; provided, however, that such penalty shall be one thousand dollars if all such payments have not been made within forty five days, two thousand five hundred dollars if not made within sixty days, and ten thousand dollars if not made within ninety days.
As to the case-in-chief, the insurer argues that the administrative judge erred as a matter of law by basing his finding of causal relationship on medical testimony admitted over the objections of the insurer regarding the leading nature of employee counsel's questions. (Dec. I, 8, Hanson Dep., 9-12) Even granting that some or even all of the four overruled objections should have been sustained, there was sufficient evidence which would support a finding of causal relationship in other portions of Dr. Hanson's testimony which were not objected to, including answers to cross-examination questions. (Hanson Dep., 13-15, 20) If the rulings on the admission of evidence were indeed erroneous, the errors were harmless.
Whether a § 8(1) penalty should have been assessed against the insurer in the second decision before us is an issue of first impression. We are asked to decide whether medical benefits paid directly to providers on behalf of an employee are "payments due an employee" for the purposes of assessing penalties pursuant to G.L.c. 152, § 8(1). For the reasons set out below, we believe the answer is no.
The result we reach should not be read as condoning the insurer's apparently dilatory handling of the medical benefits portion of this case.
The language of the statute together with our review of the legislative history of St. 1991, c. 398, § 23, which amended G.L.c. 152, § 8(1) by adding the penalties here at issue, leads us to conclude that the Legislature did not intend that the § 8(1) penalties apply when an insurer fails to pay reasonable and necessary medical bills to a medical provider within the § 8(1) time constraints. We make this determination as a result of finding that medical benefits payable to the providers are not "payments due an employee."
The first proposed version of c. 398, § 23 was contained in 1991 H.B. 2789, § 5. It read, in pertinent part:
The insurer remains at all times obligated to pay all benefits due to the employee under this Chapter within fourteen days of the receipt of an order, decision, arbitrator's decision, lump sum approval requiring the payment of benefits, the filing of a memorandum of payment, the execution of an agreement to pay compensation or the receipt of a certified letter notifying the insurer that the employee has left work after an unsuccessful attempt to return within the time frame determined by the Department pursuant to Section 8(2)(a).
(Emphasis added.) This first version of c. 398, § 23 then goes on to set out a different schedule of penalties than that which was finally enacted. Of relevance is the fact that the underlined segment in this first draft of § 8(1) was dropped when the Legislature reworked the draft and came up with the following version:
Any failure of an insurer to make all payments due under the terms of an order, decision . . . [etc.] . . . within fourteen days of the insurer's receipt of such document, shall result in a penalty of two hundred dollars, payable to the party to whom such benefits or other payments were required to be paid by the said document. . . .
1991 H.B. 6357, § 23. (Emphasis added.) Finally, the Legislature made two small, but important, additions to this second draft when it added the language highlighted below in 1991 H.B. 6410, § 23:
Any failure of an insurer to make all payments due an employee under the terms of an order, decision . . . [etc.] . . . within fourteen days of the insurer's receipt of such document, shall result in a penalty of two hundred dollars, payable to the employee to whom such payments were required to be paid by the said document. . . .
Id. (Emphasis added.) This version became law.
We infer from the evolution of the language emphasized in the three versions of § 8(1) quoted above, that the Legislature intended to change the scope of the penalty provisions therein. We conclude that the Legislature was narrowing the scope of benefits to which penalties would attach in the event of delays in payment.
The use of unenacted, proposed legislation as a tool in the aid of statutory construction is wholly sanctioned by the courts of the Commonwealth. It is appropriate to read the elimination of a clause or section as probative of the Legislature's intent to exclude the subject matter therein from the scope of the statute. See Ferriter v. Daniel O'Connell's Sons, Inc., 381 Mass. 507, 524-525, n. 20 (1980) (Court followed strict interpretation of exclusivity provision of G.L.c. 152, § 24, citing to two unenacted draft bills that contained broader provisions, stating: "Our Legislature chose the narrower version.");Miller's Case, 244 Mass. 281, 285 (1923) (Court refused to read "legally bound to support" as inclusive of civil liability, where element of civil liability had been proposed, and then expressly eliminated from statute prior to enactment). In other cases, proposed amendments to statutes are defeated, and the Court draws inferences from the attempts. SeePereira v. New England LNG Co., Inc. 364 Mass. 109, 122 (1973) (two attempts to insert language requiring municipal approval for gas storage facility indicative of Legislative intent that such approval was not required in unamended statutes). Even more broadly the Court inAmerican Mutual Liability Insurance Co. v. Commonwealth, 379 Mass. 398 (1979) used the background of a decade of defeated legislation attempting to expand the function of the Second Injury Fund as a clear policy undergirding to its holding that the amendment of § 37 finally enacted in 1973 should be applied retroactively. See id. at 403-405 and n. 11 (Court took judicial notice of legislative history, which showed attempts "almost every year" to enact the more expansive version of § 37). See generally, Locke, Workers' Compensation, § 30 (2d. ed. 1980).
The instant case fits exactly the Ferriter/Miller model of legislative construction noted above. The Legislature started with a statute that attached penalties to the late payment of "all benefits due to an employee under this Chapter." This is unequivocal language. It can only mean every aspect of "compensation" to which an injured employee in entitled. As stated in Boardman's Case, 365 Mass. 185 (1974):
Textually, [medical] costs, dealt with in § 30, are the first in the list of benefits described in the sections following § 28. As was said of medical costs when the statute was in simpler and shorter form, "The collocation of § 5 [the old provision for medical services] and its subject matter show that its benefits are a part of the compensation to which the workman is entitled." Panasuk's Case, 217 Mass. 589, 592 (1914).
Boardman at 192-193. Contrasted with the phrase, "all benefits due to the employee under this Chapter," and its necessary inclusion of medical costs, is the phrase, "all payments due an employee," found in the enacted version of the section. The use of the different term — "payments" for "benefits under the Chapter" — implies a change in meaning. The only two possibilities are, of course, a broader, more inclusive meaning, or a narrower, less inclusive one. It can be seen at the outset that there cannot be a broader definition of an injured employee's entitlements under the Act than either term, "benefits" or "compensation." Since there is nothing else within the Act for which an insurer conceivably could be held responsible (other than attorney's fees), it is a logical necessity that "payments due an employee" has a more limited meaning. The Boardman Court recognized that "payments" made to the employee were a distinct subset of "compensation:"
It is true that the costs of medical services are customarily paid not to the employee but to those furnishing the services [footnote omitted], so that in mode of payment, at least, the employee is not being compensated.
Boardman at 192. (Emphasis added.) Therefore, the holdings in Boardman and its predecessors, Panasuk's Case, 271 Mass. 589 (1914) and Bruso's Case, 295 Mass. 531 (1936) — that medical benefits are "compensation" within the meaning of G.L.c. 152 — supports the outcome we reach today. Certainly if the Legislature intended § 8(1) penalties to attach to the late payment of all "benefits"/"compensation" contemplated under the Act, it would not have excised the phrase, "benefits due the employee under this Chapter" in its first draft and replaced it with "payments due an employee." See Ferriter, supra and Miller, supra.
Even more convincing in this analysis is the evolution of the second part of emphasized language in the bills quoted above, that which regards to whom the § 8(1) penalty is to be paid. In the enacted version, the penalty is payable to the employee to whom such payments were required to be paid by the said document. In the draft that preceded that version, the penalty was to be payable to the party to whom such benefits or other payments were required to be paid by the said document. "The party" would have included medical providers, but that language was amended out of the bill.
The enacted language regarding the recipient of the penalty removes any doubt as to the distinction between "benefits due to the employee" and "payments due an employee." The "payments" in the enacted form of § 8(1) are "due the employee" within the narrow meaning of that phrase — they are "required to be paid" to that employee. The medical benefits that are to be paid directly to medical providers pursuant to a conference order, as in the instant case, are simply not "required to be paid by the said document [to the employee]."
We read the phrase contained in the first draft of § 8(1), "all benefits due to the employee under this Chapter," to mean "due" in the broad sense of the word, i.e. something "owed by right." American Heritage Dictionary, 403 (1st ed. 1978)
In instances when the employee has personally paid for reasonable and necessary treatment expenses out of his own pocket (e.g. prescription medications), and the insurer is in possession of those bills with the substantiation of payment and their appropriate coverage under the provisions of § 30 at the time it receives the § 8(1) "document," non-payment of those bills would certainly invoke the application of § 8(1) penalties.
We recognize this difference in treatment afforded under § 8(1) to employees who pay medical bills out-of-pocket as opposed to those who cannot as an unfortunate result of the statute as it is written. Injured employees, who "may be presumed commonly to be somewhat needy[,]" Ahmed's Case, 278 Mass. 180, 187 (1932), should not be forced to pay for what they are entitled to receive under the Act, in order to gain leverage in situations such as that outlined in the instant case. Nonetheless, we may not presume that the legislature, in making an important first step in addressing the problem of delayed payments, as it did in enacting § 8(1), intended to cover all of the issues that arise within that context.
We reverse the decision of the administrative judge awarding the employee a § 8(1) penalty, and affirm the judge's decision in the case-in-chief.
So ordered.
Judges Fischel and Wilson concur.
_____________________________ Administrative Law Judge
_____________________________ Administrative Law Judge
_____________________________ Administrative Law Judge
Filed: September 11, 1995