### IN THE SUPREME COURT OF TENNESSEE AT JACKSON Novem ber 13, 200 3 Session
ROBERT TERRY MOORE v. THE TOW N OF COLLIERVILLE, ET AL 

### . An Appeal from the Supreme Court Special Workers’ Com pensation Appeals Panel Circuit Court for Shelby County No. CT-001919-01 John R. McCarroll, Jr., Judge

No. W2002-02647-SC-R3-CV - Filed January 20, 2004

In this workers’ compensationappeal, we must determinewhether an employ

er is liab le to a he alth insurer who paid necessa

ry and rea sonable

medical e

xpenses inc

urred by an employ

ee but did not intervene in the workers’ compensation claim to protect its interest. Although the trial court found that the treatment was necessary and reasonable, it further found that the employ er was not liable

for the medic al expense s paid by the employ

ee’s health insurer because the insure r failed to intervene and prove its interest . The emp loy ee appe aled to the Specia l Workers’ Compensa

tion Appeals P anel, which transfe

rred the case for full Court review without a recommendation. After reviewing the record and applicable authority , we have determined that the employ er is liable to the employee ’s health in surer for all reasonable and nec essary medic al expenses and that the health insurer is no t required to intervene in the workers’ compensation suit. Beca use the record does not fully develop the nature and extent of

the expenses paid by the hea lth insurer, we remand

to the trial court for that purpose and further action consistent with this opinion. Tenn. Code Ann. § 50-6-225(e) Appeal as of Right; Judgment of the Circuit Court

Reversed; Case Remanded to the Cir cuit Court

E. R IL EY A NDERSON , J., deliver ed the opinion of the

court, in which F RANK F. D ROWOT A , III, C.J., and A DOLPHO A. B IRCH , J R ., J ANICE M. H OLDER , and W IL LI AM M. B ARKER , JJ., joined. Steve Taylor, Memphis, Tenne ssee, for the Appellant, Robert Terry Moore.

W. Timothy Hay

es, Jr., Memphis, Tennessee, for the Appellees, The Town of Collierville and Tennessee Municipal Lea gue, Inc.-2- OPINION
BACKGROUND

At all times pertinent to this appeal, the employee , Robert Terry Moore, age 52, worked as
an electrical inspector for the Town of Collierville in ShelbyCounty, Tennessee. O n October 21, 1999, August 10, 2000, and Novembe

r 20, 2000 , Moore su stained in juries to his neck a

nd back in the course and scope of his employ ment. The first injury re sulted from a fall from a ladder, t he secondoccurred while inspecting a swimming pool electrical box, and the thi rd, a nec k i nj ur y, resulted from a fall off a porch while inspecting a home.

The employer, the Town of Collierville, treated these injuries as compensable and authorized medical tr eatment fo r Moore by Dr . Edward Pratt, an orthopaedic surgeon, a nd Dr. Fereidoon Parsioon, a neuros urgeo n, both of w hom trea ted him conserv atively . Dissatis fied with his treatme

nt, Moore, withoutthe autho rization of

his employ

er, saw his family phy sician, Dr. Aram Hannissian, who referred him to Dr. David McCord, an orthopae dic surgeon, who performed fusion surgery on his neck. The employ

er ref used to pa

y th e unautho rized medi cal expen ses. Moor e then fi led suit against the employ er for the unauthorized medical expenses and permanent disability

. The follo wing is a

summary of the re levant pr oof at tri al:
On June 29, 2000, Moore saw Dr. Edward Pr att, an orthopaedic surgeon authorized by the employer a fte r the fir st work-r

elated in jury but befor

e the sec ond and th

ird injuri es. Dr. Pr

att diagnosed

a smal l dis c bulge at C5-6 and facet irritability at C4-5 and C5-6. He did not think Moore
was a surgical candidate and starte d him on a conservative course of treatment, including medication and phy sical the

rapy . Moore showed no im proveme nt over the approximately two months of treatme nt. Dr. Pratt testified that Moore’s sy mptoms were mechanically inconsistentwit h the bulging disc at C5 and 6, andth at th er e w as a p syc ho lo gi ca l c om po ne nt to hi s i nj ur y. Dr. Pratt found
no pe rm an en t d is ab il it y, recommended no work restrictions, and discharg ed Moore from his care on August 22, 2000. He conceded that if Moore suffered a separate an d new inju ry in November

of 2000, “all betswere off” and that Dr. McCord “could have been correct in performing cervical fusion surgery .” During the course of Dr. Pratt’s conservative treatment, Moore requested a second opinion. The employer then r

eferred him to Dr. Fereidoon Parsioon, a ne urosurgeon, whom Moore saw on
a single occasion on August 11, 2000, i.e. , after the swimming pool injury but before the November 2000 por ch f all in

ju ry. M oor e re por ted in ten se c erv ica l p ain . Dr . P ars io on o rde red a ne w MR I, which sh owed a c entral d isc bulg e at C4 an d a disc pr otrusion a t C5 and C6 of

the cer vical s pin e which, in his opinion, were not larg e e nough to put pressure on the spinal cord or nerve r oot. Dr. Parsioon concurr

ed with Dr . Pratt tha

t the emplo ye e was not

a candid ate for

surger y. He also testified that Moore seemed depressed and that this depression could be related to the employee’s complain ts of pain. Dr. Parsioon determined that there was no new injury an d h e f ou nd no di sa bi li ty.-3-

Following the accident on November 20, 2000, M oore con sulted his f amily physician, Dr. Aram Hannissian, without the authorization of his employer. Dr. Ha

nnissian referred Moore

to Dr. McCord, an orthop aedic su rgeon . Dr. McCo

rd first s aw Moor e on December 5, 2000. Moore described his work- place in

juries, and Dr. McCord found decreased nec k motion and pain. Moore’s
x- ra ys showed a previous fusion surgery at C6 and 7 for a work-related injury he sustainedin 1996 and a disc protrusion or

herniation a t C4-5 and

C5-6. Dr. McCord the

n perfor med a disc ogram, which demonstrated disc herniation which was painful and sy mptomatic at C4-5 and C5-6. After Dr. McCord discussed surgical and non-surgical options, Moore elected surgery

. On January 30, 2001, Dr. McCord perfor med su rgery . The fusion surgery consisted of removal of the cervical discs which were re placed with b one taken from Moore’s hip secured by plates and screws. Accord ing to Dr . McCord: “On his first postoperative visit on March 8th, 2001[,]

. . . [Moore] stated he was doing exceptionally w e ll, that he . . . [had] stopped taking [pain] medicati on. . . . He was very happy. His neck motion was improve d . . . . His stre ngth . . . ha d returned.” Dr. McCord opined that Moore’s work-re lated inju ries ca used his condition

and that h

is permanent

disability was twe nt y percent (20%) to the body as a whole. He was placed on work restrictions.

Alth ough Moore suffered an automobile accident in Mar ch of 2 001 which

aggr avated h is sym ptoms, Dr. McCord testified that his assessment of Moore’s condition and permanent dis ability did not take into consideration how that accident affected Moor e’s condition.

Becau se th e e mp lo yer re fu se d t o p ay t he unauthorized med ical expe nses, Bl ue Cross, Moore’s personal health insurer, paid the vast majority of the medica l expenses associated with the medical t reatmen t provide d by

Dr. McCor

d. Moore w as, however, billed for sma ll co-pa yme nts.

Dr. Joseph Boals, an orthopaedic surgeon, evaluated Moore on March 11 , 2002. Dr . Boals testified that his examination revealed loss of neck motion. Dr . B oals opined that Moore’s neck condi tion was caused by

work-related injuries and that his permanent disability to the body

as a whole was thirty-four pe

rcent (34%) based upon the anatomic chang e resulting from the fusion surgeries and the disc excision. Dr. Boals also testified that the medical treatment provided by Dr. McCord and the a ssociate d medic al expenses were reasonable, nece ssary and r elated to the employee’s w ork injuries. After his employer

refused to pay

for the unauthorizedmedical e xpenses, Mo ore file d suit agains tthe employer a

lleging that his work-related injury caused him to incur medic al expenses and to su ff er pe rm an en t p ar ti al di sa bi li ty.
After considering the evidence outlined above, the tria l court determined that

as a result of his work-re

lated inju ries, Moo re susta in ed a permanent medical impairment of thirty -five percent (35%) to the body as a whole and ordered the workers’ compensa tion disability award

to be paid

in
a lump sum. De spite find ing that M oore’s u nauthorized medical treatment was reasonable and-4-

ne ce ss ar y, the trial court held in ab ey ance the issue of w

hether B lue Cross w as entitle d to reimbursement from the employ er for the unauthorized medical expenses.

Moore filed a motion to compel the employer to pay the unauthor

ized medic al expense s to Blue Cross and attorney f ees. The trial court denied the motion, holding that the health insurer was required to intervene in the worker’ compensation suit before the e mployer woul d be req uired to reimbur se it for the medical expenses. Moore appealed to the Special Workers’ Compensa tion Appeals Panel, which transferred the appe al to this Court for review without a recommendation.
STANDARD

OF REVIEW

Our standard of review of factual issues in a w orkers’ compensation case is de novo upon the record of the trial court, accompanied by a presumption of

correctness of the trial court’s factual finding s, unless the preponderance of the evidenc e is otherwise. Tenn. Code Ann. § 50-6-225(e)(2) (Supp. 2003); see also Houser v. Bi-Lo, I nc. , 36 S.W.3d 68, 70-71 (Tenn. 2001). When the trial court has seen the witnesses an d h ea rd th e t es ti mo ny, especially whe re issues of credibility a

nd the weight of testimony are involved, the appe llate cou rt must exte

nd conside

rable de ferenc e to the trial court’s factual findings. Houser , 36 S.W.3d at 71.

Our standard of

review o f lega

l issues, su ch as sta

tutory interpre tation, is de novo. Tucker
v. Foamex, LP , 31 S.W.3d 241, 242 (Tenn. 2000). Moreover, we must interpret workers ’ compensation sta tutes “to p romote a nd adher e to [their

] purposesof secur

ing benefits to th ose workers who fall within its coverage.” Allen v. City of Gatlinburg , 36 S.W.3d 73, 75 (Tenn. 2001) (quoting Lindsey

v. Smith & Johnson, Inc. , 601 S.W.2d 923, 925 ( Tenn. 198 0)); see also Tenn. Code Ann. § 50-6-116 (1999).
ANALYSIS

The question o f first imp

ression p resente d by

this appeal is whethe

r an empl oye

r is liable to a health insurer

who paid necessary

and reasonable medical expenses incurred by an employee

as the result of

a work- related

injury but did not i ntervene in the wo rkers’ compensa

tion suit to seek reimbursement.

The employ

ee conte nds that the employ

er is lia ble for unauthorized medical expenses dee med to be rea sonable a nd nece ssary , that an a

ward of such expen ses should

result in th e employee’sattorney collecting the statutory a ttorney fee , and that a thir d-party insurer that has p aid the medical expenses need not intervene in a workers’ c ompensation c laim for a court to order reimburs ement.
Co nv er se ly, the emplo ye

r contends first th at i t is not liable for the unauthorized medical expenses at all and that the employee’s a ttorney is not entitled to a statutory attorney fee based on the recove

ry of the me dical expe

nses. Ne xt, the employer c ontends that even if it is responsible for-5-

the unauthorized medical expenses, the third-p ar ty health in surer mu st interve ne in the c laim to secure reimbursement from the employ er.
We begin our

analy sis by

reviewing the p

rovisions of the wo

rkers’ compensation statute that state an “empl oye

r . . . shall furnish f

ree of c harge to t he employee

such medical and surgical treatme nt, medicine, m edical a

nd surgical supplies . . . as ordered by the attending phy sician and hospitalization, . . . made r easonab ly necessa

ry by a ccident as he rein defined,” namely a work-related in ju ry. Tenn. Cod

e Ann. § 50 -6-204( a)(1) ( Supp. 2003) . We have p reviousl y held that

when an employee receives medical care

fo r a work-related injury that has not been authorized by the employer, the employee must establish the nec essity and rea sonableness of the charges bef ore the employer is responsible. See Baggett v. Jay Garment Co. , 826 S.W.2d 437, 439 (Tenn. 1992).

Where an employ

er is liab le for su ch medic al expense s, the employer must pay the medical providers directly for the

costs of such care, rather than the employ ee personally

. See Staggs v. Nat’l Health Corp. , 924 S.W.2d 79, 81 (T enn. 1996) (construing Tenn. Code Ann. § 50-6-204(a) (1))

. Where the employee ha s personally paid for the disputed medical treatment, however, the employ er shallreimburse the employee personally. See id. ; see also State Auto Mut. Ins. Co. v. Hurley , 31 S.W.3d 562, 565 (Tenn. Workers’ Comp. Panel 2000). Additionally, where medic al expenses are contes ted and the employee prevails, the amount awarded in compensation for those expens e s become part of the be nefits upo n which attorney’ s fees are calculated. Wilkes v. Res. Auth. of Sumner County , 932 S.W.2d 458, 463 ( Tenn. 199 6); see also Tenn. Code Ann. § 50-6-226 (Supp. 2003) (providing for the pay ment of attorney’ s fees in workers’ compensation cases).

As previous ly s tated, it i s well-se ttled that an emp lo yer ma y b e liable for an injured employee’sunauthorized medical expenses when the employ ee proves that the treatment was
reasona ble and medically ne cessary
. See Bagg ett , 826 S.W.2d at 43 9. Accor dingly , the firs tissue raisedby t

he employ

er is ea sily

resolve d. It i s clear that the employee he re proved the disputed treatment was reasonable and medically necessary ; therefore, the trialcourt correctly found that the employer wa s liable for the unauthorized medical expenses and attorney ’s fees.

The more difficult issue of first impression is whether the employ er is liable for unauthorized medical expenses established as reasonable and necessary when the expenses were

paid by a thirdparty health insurer that did not intervene in the workers’ compensation cla im to see k reimburs ement. It is undisputed that the medical providers of this treatment were compensated by the employee’s he alth insurer, rather than by the employer or

any directpayment by

the employee, except perhaps, for small co-pay ments. It is also undisputed that thehealth insurer did not intervene in the workers’ compensation claim to seek reimbursement.

Alth ough this Court has not addressed this specific issue, two Wor kers ’ Compensation Appeals Panels ha ve done so and reached opposite results. I n Brack ins v. Sevie

r County , No. 038S01-9607-CV-00083, 1997 WL 198783 (Tenn. Workers’ Comp. Panel April 2 2, 1997) (no motion for full court review filed), the Panel stated tha t “[w]e are

not persu aded by

the [employ

er’s] argument that the g roup hosp italization

insurer ’s failur

e to requ est

reimburs ement in

this case affec ts1 Presumably, in a case where nei ther the employ ee’s pers onal heal th i nsur er nor the employ er wou ld pay for medical expe nses, the emp loyee c ould brin g a claim against the employer and interplead the heal th insurance carr ier. See Tenn. R. Civ. P. 22. This, however, may li kewise create a barri er that i s inconsistent with t he policy of providing complete and early access to reasonable and necess ary medic al treat ment, a s wellas th e payment of medical expenses to hea lth care pro vider s. -6- the [employer’s] liability

under Tennessee Workers’ Compensation Law.” Id. at *3. In Prosser v. Bedford County Bd. of Educ. , No. M2000 -02424-WC -R3-CV, 2 001 WL 1 006078 (T enn. Worke rs’ Comp Panel September 4, 2001) (motion for full court review denied), however, the Panel held that
an employ

er shall not be held

lia ble to reimburse health insurance carrier s who have paid workinjury related medical expenses in cases where the carriers have not become par ties to the claim and where the total extent of the reasonable and necessary medical expenses has not been proved. Id. at *5.

Tennessee Code Annotated s ection 50-6-204(a)(1), part of the worke rs’ compensation statut ory scheme, makes it cry stal clear that the employ er is obligated to the employ ee to pay reasona ble and necessary

medical expenses for work-related injuries. The work ers’ compensation statutes, however , do not p rovide fo r or proh ibit employ

er reimbursemen

t of medic al expense s to a th ir d- pa rt y he al th in su re r for tr ea tm en t w hi ch wa s r ea so na bl e a nd ne ce ss ar y, and they do not address the question of intervention.

The legisla

ture hasdecided

that it is the employer’s statutory responsi bility to pay reasona ble and necessa

ry medical e xpenses fo

r work-r elate d injuries and that workers’ compensation provisions should be construed to achievetheir remedial purpose. See Tenn. Code Ann. § 50-6-116 (1999) & § 50-6-204

(Supp. 200 3). Acc ordin gl y, where an employer doe s not authorize or pay for me dical expenses and instead forces an employ ee who seeks ea

rly treatment to use personal health insurance benefit s to pay for

expenses that are later determined to be necessary and reasonable, a health insurer should not b e required to i ntervene to be reimbursed for the medical e xpenses it paid, and the
em pl oye e should not be required to force such intervention. I ndeed, allowing health insure rs t o receivereimburs ement wit hout formally

interve ning in w orkers’ compensa tion claim s is consistent withthe remedial nature of the workers’ c ompensation statutes because it may result in employ

ees having earlier acces s to medica l treatme nt and the

full rang e of wor

kers’ c ompensat

ion benef its. Co nv er se ly, requiring healt h insurer s to interv ene in

worker s’ compensa

tion claim s to prote ct their potential reimbursement

interests may have

a chilling effect on

health insurers’ willingness to pay claims that could ultimately be deeme d “work-related” and thus outsi de their contractual oblig ations.

Our holding supports the remedial policy goals of the workers’ compensation statutes on a practical level as well. As noted, once a finding has been made that the employee’ s injury is workrelated, the heal

th insure r can se ek reimb ursement from th e employer f or expenses paid on the empl oyee ’s behalf because health insurance c ontracts do not cover work-related injuries. Be fore such a finding is made, however, employ ees may ha

ve difficulty rec overing expenses from either the employer or a health insurer and could ultimately be forced to either pay

for their own medical expenses 1 or delay

treatme nt altog ether. Cl early , this is not a result envisioned under the worker s’ compensa tion statut es.2 Sinc e th e la nguag e of Tenn esse e Code Annot ated section 50-6-204 do es not address this problem, we have

craft ed thi s solu tion. The legis latu re may l ikewi se wis h to address these iss ues to es tabli sh a st atut ory procedure.
-7- Ac co rd in gl y, the la nguage and the remedial policy of the workers’ compensation statutes do notrequire that a third-party health insurer intervene to obtain reimbursement for medica l expenses from the employer. 2 We therefore hold that the employer i s l iable to the health insurer for unauthorized but reas onable a nd nece ssary

medical e

xpenses inc

urred in the cour se of treatment

of the employee’s w ork-related injuries and paid for by the health insurer . Because the record does not fully reflect the medical expenses paid by the health insurer

or th e e mp lo yee , i f a ny, this case must be rema nded to the

trial cou rt. Upon r eman d, the tria

l court sh ould dete

rmine whe

ther and to what exte

nt a third- party

health insurer paid medical expenses on behalf of the employee whic h were reasonable, necessa ry and on account of the wo

rk-rela ted injuri es in this c laim. The trial cou rt shall then order

the emplo ye

r to pay the third-party he alth insurer that amount as reimbursement and to pay the employee for

medical expenses incurre d for co- pay ments, if a

ny. The emplo ye e’s attor

ney shallbe entitled to the statutory attorne y’ s fee ba sed on the se additio nal rec overed m edical e xpenses.
CONCLUSION

After reviewing the record

and applicable authority , we conclude that the employer is liable for all medical expenses deemed reasonable and nec essary a s the result of the work-place injury and shall be required to reimburse the employ ee’s health insurer

who has pa

id those expenses without the necessity of the insure r intervening in the workers’ compensation cla im. We therefore modify the trial cou

rt’s judgment and r

emand to t

he Circuit Court for fur

ther ac tion consi stent with this opinion. Costs on appeal are taxed to the defendant, the Town of Collierville.

___________________________________ E. RIL EY ANDER SON, JUSTI CE