July 25, 1988

JIM MATTOX ATMRNEY O&NERAL

Mr. Joseph C.Gagen Opinion No. JM-931 Chairman Texas Industrial Accident Re:Authority of the Board Accident Board to Industrial approve a that would settlement agreement terminate liability for future medical expenses (RQ-1353) 200East Riverside Austin, Texas 78704

DearMr. Gagen:

You ask:

Does the authority of the Industrial Accident Board overmedical expenses incurred after a final award, judgment, or settlement, extend to approving compromise settlement agreements thatwould terminate all liability for futuremedical expenses?

The Industrial Accident Board (the "board") isan administrative body created by statute and possessing only those powers conferred on itby statute. mmercial Casualty Insurance V.T.C.S. artf)'8:;7,§ 1.' 87 'S.W.2d ::81 (Tex. 1935).

We believe that the determination of the board's authority to approve a compromise settlement agreement subsequent to a final award of theboard ora judgment of a court is governed by different statutory provisions than those apposite to thedetermination of theboard's authority to approve compromise settlement agreements subsequent to an original compromise settlement agreement. Wewill therefore treat these two elements ofyour question separately.

AUTHORITY OF BOARD TO APPROVE COMPROMISE SETTLEMENT AGREEMENT REGARDING FUTURE MEDICAL EXPENSES SUBSEQUENT TO FINALAWARD OF BOARD ORJUDGMENT OF COURT.

Attorney General Opinion JM-361 (1985)dealt with the question ofwhether theboard may approve, while acase is

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pending before theboard, acompromise settlement agreement which terminates liability for futuremedical expenses, if the carrier had admitted liability and the injurywas one conclusively held tobe total andpermanent pursuant to article 8306, section lla,V.T.C.S.
Noting that section 12 'of article 8307, V.T.C.S., authorized the board to approve a compromise settlement agreement ll[w]herethe liability of the association or the extent of the injury isuncertain," JM-361 concluded that where the carrier had admitted liability and where the injurywas one forwhich as amatter of law incapacity was total and permanent, there was no Wncertaintyl@ as to liability or extent of injurywithin the meaning of section 12. The opinion ruled that uncertainty as to amounts of future medical expenses was not "uncertainty" within the meaning of section 12 such that the board would be authorized to approve a compromise settlement agreement regarding only futuremedical expenses, where liability and extent of injury hadbeen established.

Inour opinion, it follows from the ruling in JM-361 that the board has no authority to approve a compromise settlement agreement that would terminate liability for futuremedical expenses after a final award of the board or a judgment ofa court, because theproceedings of the board
ora court in rendering a final award or judgment would necessarily have determined "liabilityql and "extent of injury" such that there would beno remaining "uncertainty" within themeaning of section 12which would authorize the board to approve acompromise settlement agreement regarding futuremedical expenses.. That a final award by theboard or a judgment ofa court1 would have resolved uncertainty as to liability or extent

### ofinjury isapparent from areading of pertinent parts of section 5ofarticle 8307:

fillquestions arisins under this law. if not settled bv aoreement of the varties interested therein andwithin the vrovisions of this law, shall. extent as otherwise provided. be determined **by** the Board. Any interested party who isnotwilling and does not consent to abide by the final ruling and decision of said Board shall,within twenty

1. Of course, anaward or judgment isnot final until all appellate remedies have been exhausted.

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(20)days after the rendition of said final ruling anddecision by said Board, file with said Board notice that hewill not abide by said final ruling anddecision. And he shall within twenty (20) days after giving such notice bring suit in the county where the injury occurred, or in the county where the employee resided at the time the injury occurred (or,if such employee is deceased, then in the county where the employee resided at the time ofhis death), to set aside said final ruling and decision, and said Board shall proceed no further toward the adjustment of such claim, other than hereinafter provided.
. . . Whenever such

rouoht. . *

the riohts and liau of thenarties thereto shall b bv the orovisions of this la:. determined (Emphasis added.)

The liability of the association and the extent of the injury are the two key issues tobedetermined by the board
orby acourt ina worker's compensation case. We find no provision of law relieving the board ora court from the duty todetermine liability and extent of injury in renderinga final award or judgment. Once liability and extent of injury are finally determined by theboard orby a court, there would remain nouncertainty as to the liability or extent of injury that would authorize the board under section 12 to approve a subsequent compromise settlement agreement regarding futuremedical expenses.

Moreover, section 5makes the only specific provision forthe board's handling of medical expense claims after a final award by theboard ora judgment of acourt.

Notwithstanding any other provision of this law, asamended, no award ofthe Board, andno judgment of the court, having jurisdiction of a claim against the association for the cost or expense of items of medical aid, hospital services, nursing, chiropractic services, medicines orprosthetic appliances furnished to an employee under circumstances creating a liability therefor on thepart of the association under theprovisions of this law, shall include in such award or judgment any cost or expense of any such items not actually furnished to and received by the employee prior to the date of said award or

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judgment. The first such final award or judgment rendered on such claim shall be res judicata of the liability of the association for all such cost or expense which could have been claimed up to thedate of said award or judgment and of the issue that the injury of said employee is subject to theprovisions of this law with respect to such items, but shall not be res judicata of the obligation of the association to furnish orpay for any such items after the date of said award or nt. After the first such final award oment. the Board shallhave continuinq iurisdiction in the same case to render successive awards to determine the liabilitv gf the association forthe cost or exoense of
w such items actuallv furnished to and received bv said emulov e notmore than (6)months orior to tzedate of each six such successive award, until the association shall have fullv discharaed its oblicration under this law to furnish all such medical aid, hosnital services. nursina. ChirODraCtiC

. . services. medicines or DrOSthetiC aDDliance $0 hich said emulovee mav be entitled: provyded, each such successive award of the Board shall be subject to a suit to set aside said award by a court of competent jurisdiction, inthe samemanner as provided in the case of other awards under this law. (Emphasis added.)

The board possesses only those powers conferred on it by statute. We have foundnoprovisions authorizing the board to approve compromise settlements subsequent toboard awards
or court judgments, or to take other action regarding future medical expenses. Section 5provides aprocedure the board may utilize for the disposition of claims for medical expenses incurred subsequent to aboard award or court judgment.

AUTHORITY OF THE BOARD TOAPPROVE COMPROMISE SETTLEMENT AGREEMENTS REGARDING FUTURE MEDICAL EXPENSES SUBSEQUENT TO AN ORIGINAL COMPROMISE SETTLEMENT AGREEMENT.

We note at the outset thatwe have found no reported
cases dealing with a compromise settlement agreement made subsequent to an original compromise settlement agreement. Many courts have stated that once an original compromise

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settlement agreement isapproved by theboard, the agreement isbinding on the parties until the original settlement agreement is lawfully set asideby acourt. See. e.cr.,

-.. Luersen v. Trawerica Insurance Co, 550 S.W.2d 171 (Tex.

Civ.App. -Austin 1977,writ ref'd n1r.e.); Pearce v. Texas EmoloversJnsurance Association 403 S.W.2d 493 (Tex. Civ. APP. -Dallas 1966,writ ref'd' n.r.e.), reh*a denied, 412 S.W.Zd 647 (Tex. 1967), and the authorities cited therein.

In this vein, section 12b

### of article 8307, V.T.C.S.,
now specifically provides that the board "shall have no jurisdiction to rescind or set aside any compromise settlement agreement approved by theboard or any agreed judgment approved by the court." Acts 1983, 68th Leg., ch. 501, section 1.

Section 12bnow also provides a specific procedure for the board's resolving disputes as to'medical expenses arising pursuant to compromise settlement agreements approved by the board oragreed judgments approved by the court:
Whenever in any compromise settlement

agreement approved by the board or in any agreed judgment approved by the court, any dispute arises concerning the payment of medical, hospital, nursing, chiropractic or podiatry services oraids or treatment, or formedicines orprosthetic appliances for the injured employee asprovided in Section 7, Article 8306, Revised Statutes, amended, or asprovided in such compromizi settlement agreements or agreed judgments, all such disputes concerning the payment thereof shallbe firstpresented by anyparty to the Industrial Accident Boardwithin six months from the time suchdispute has arisen (exceptwhere 'goodcause' isshown for any delay) for theboard's determination.
. . .

It is our opinion that approval of a compromise settlement agreement regarding medical expenses subsequent to an original approved compromise settlement agreement would necessarily have the effect ofrescinding or setting aside, at least to some extent, the original compromise settlement agreement andwould thus be barred by section 12b. Section 12b provides aprocedure for the board's dealing with questions of medical expenses pursuant to a compromise settlement agreement oragreed judgment approved by a court.

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SUMMARY

After a final award of theboard, court judgment, or compromise settlement agreement which has not been lawfully set aside, the Industrial Accident Board has no authority to approve acompromise settlement agreement to terminate liability for future medical expenses.

JIM MATTOX Attorney General of Texas

MARYRELLER First Assistant Attorney General

MU MCCREARY Executive Assistant Attorney General

JUDGE ZOLLIE STBARLBY Special Assistant Attorney General

RICK GILPIN Chairman, Opinion Committee
Prepared byWilliam Walker Assistant Attorney General

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