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Addressing an issue of apparent first impression, a Delaware Superior Court held that an employer and the state insurance guaranty fund were responsible for all of an injured employee’s medical expenses, even though Medicare had already paid a substantial portion of the worker’s bills. “The issues of Medicare making the payments and Medicare as a secondary payor are entirely irrelevant to the decisions of the [Industrial Accident] Board and this Court,” Judge William L. Witham Jr. wrote in Porter v. Insignia Management Group. “Medicare is not a party to this action and thus the right to reimbursement is not an issue before this Court.” Because Insignia’s former insurer, Reliance Insurance Co., entered liquidation in October 2001, employee Dorothy Mitchell Porter’s claim was assigned to the Delaware Insurance Guaranty Association, the opinion said. Under Delaware law, the DIGA is therefore responsible for the full $102,719.70 awarded to Porter. The case came to the Superior Court on appeal from the Industrial Accident Board’s decision to award disability benefits and medical expenses to Porter. According to Witham’s Sept. 26 opinion, Porter in 1991 was working as an apartment manager for Insignia Management Group when she fell and injured her back. She underwent two back surgeries following the accident and returned to work after she recovered. In 1994, Porter re-injured her back after tripping over a wire at an Insignia apartment complex, the opinion said. She underwent a spinal fusion and again returned to work following her recovery. Porter stopped working for Insignia in 1996. In 1998, Porter was employed as a cashier for Eckerd Drug Store when her back began hurting again, the opinion states. By May 2001, the claimant could no longer work due to severe back pain. At the end of May 2001, Witham said, Porter underwent another back surgery in which metal devices were implanted into her spine. The devices, called Ray cages, provide stability during the spinal fusion process, the opinion said. In June 2001, one of the cages slipped, causing Porter to lose control of her leg. She underwent yet another surgery and remained in the hospital for 30 days while she relearned how to walk. Porter incurred medical bills of $102,719.70 as a result of her 2001 surgeries and aftercare, the opinion said. Additionally, the claimant was unable to return to work, and it was unknown at the time of the April 2002 board hearing when she would be able to work again. Applying the last injurious exposure rule, the board had concluded that as Insignia’s insurer at the time of Porter’s second work-related fall, Reliance was fully liable for Porter’s disability benefits, the opinion said. The board also looked to information provided by the parties’ medical experts and determined that Reliance was responsible for the $102,719.70 in medical bills, Witham said. Following the board’s decision, Insignia filed a motion for a rehearing or clarification. It informed the board that Reliance was in liquidation, and that Porter’s claim had been assigned to the DIGA. Insignia claimed that only $3,726.49 in medical expenses remained outstanding at that time because Medicare had already paid Porter $98,993.21, the opinion states. Accordingly, the employer argued that the DIGA was required to pay only the $3,726.49 in unpaid bills rather than the full amount. The board disagreed, reasoning that because Delaware’s Workers’ Compensation Act provides that it is the exclusive remedy for industrial accidents, and no statutory provision required that the board reduce its award by the amount Medicare had already paid, its decision would stand. Before the Superior Court, Insignia contended that Porter would receive a windfall if the DIGA were to tender the full amount of her medical claim. By the time the case reached the court in March, only $2,346.55 of the expenses remained due, the opinion said. Insignia asserted that in combination, Medicare, Medicare write-offs and Porter’s private insurer had taken care of all but the remainder due, and that the claimant should not have been permitted to recover for medical bills she had not paid. Porter, on the other hand, argued that the issue of Medicare coverage was not considered by the board as it was irrelevant, and that workers’ compensation law holds employers liable for medical expenses arising out of industrial accidents. The court looked to Delaware’s workers’ compensation statute and determined that under Title 19 of the Delaware Code, an employer is responsible for all reasonable medical costs associated with an industrial accident. Porter had presented medical bills totaling $102,719.70, Witham said. The court rejected Insignia’s reliance on the state Supreme Court’s decision in Guy J. Johnson Transportation Co. v. Dunkle, 541 A.2d 551 (1988). In that case, the high court ruled that an employer had discharged its statutory duty to pay an employee’s medical expenses by providing a group insurance plan to its employees and paying the premiums for that plan. The Superior Court said Dunkle was distinguishable from Porter because, unlike the employer in Dunkle that paid the premiums for the insurance policy covering its employee, Insignia “did not have anything to do with the Medicare payments.” Witham viewed Adams v. Delmarva Power & Light Co., 575 A.2d 1103 (Del. 1990), as more analogous to the case before him. In Adams, the Supreme Court concluded that an employer was not entitled to an offset for underinsured motorist benefits that claimant received from his automobile insurance carrier following a work-related car accident. The court focused on the fact that the employee, and not the employer, had purchased the underinsured motorist insurance. “Like the Adams case,” Witham wrote, “[the] employer here did not pay for the coverage claimant received from Medicare. Medicare’s payment of claimant’s medical bills is comparable to Adams’ underinsured motorist insurer paying his medical bills. Therefore, employer is not entitled to an offset of the medical expenses and the decision of the [board] awarding claimant $102,719.70 for her medical expenses is affirmed.” James Perry and Michael Sensor of Perry & Sensor in Wilmington handled the appeal for Insignia. Sensor said his firm did not serve as counsel at the board hearing. Walt Schmittinger of Schmittinger & Rodriguez in Dover represented Porter. He could not be reached for comment prior to press time.

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