Opinion ID: 2512536
Heading Depth: 4
Heading Rank: 1

Heading: The board's joinder regulation

Text: Dr. Barrington argued before the board that he should have been joined as a party to Williams's case because he had a right to relief arising out of Williams's claim. The board rejected his argument without analysis. The appeals commission looked at whether Dr. Barrington had to be joined as a party and decided that AS 23.30.030(4), which authorizes healthcare providers to file claims in their own names, and 8 Alaska Administrative Code (AAC) 45.040, the board's joinder regulation, did not compel the employee to join every creditor who may have provided services or treatment of the workers' compensation injury. [19] In essence, the appeals commission determined that Dr. Barrington and Williams had identical interests and that Williams could therefore represent Dr. Barrington's interests adequately before the board. We agree with the appeals commission that AS 23.30.030(4) and 8 AAC 45.040 do not require joinder of every healthcare provider in every case. But we conclude that they required joinder of Dr. Barrington because he potentially had a right to relief, Williams could not adequately advocate for him, and his absence affected his ability to protect his interest. Dr. Barrington's assertion that he had a right to bring an independent claim is rooted in the language of AS 23.30.030(4), which states in part that a workers' compensation insurer will promptly pay to the person entitled to them the benefits conferred by this chapter and that a workers' compensation insurance policy is a direct promise by the insurer to the person entitled to physician's fees ... and is enforceable in the name of that person. [20] We have interpreted this subsection to mean that an employer is directly liable to health-care providers for treatment of work-related injuries. [21] Dr. Barrington reasons that because he provided medical services to Williams for a work-related injury, ACS had a direct liability to him that the board could not extinguish without giving him notice or an opportunity to be heard. ACS denies that Dr. Barrington had an independent claim against it and denies that his services were work related. The board decided that Williams had contractually waived payment for Dr. Barrington's services in the settlement and that Dr. Barrington's recourse was within the civil courts. The appeals commission construed subsection .030(4) as permitting healthcare providers to file claims in their own names, but determined that the real party in interest is the employee, not the provider. It decided that Dr. Barrington was not a party in interest before he filed his claim. There can be more than one real party in interest in a given lawsuit or claim. [22] Whether a person is a real party in interest under the Alaska Civil Rules depends on whether he or she has a substantive right to bring a claim. [23] No one disputes that Dr. Barrington could have filed a workers' compensation claim in his own name before the settlement and joined Williams as a party to his claim. Had he done so, Dr. Barrington's claim presumably would have been joined with Williams's, he would have been a party, and he would have had to consent to a settlement that affected his interest. [24] From this, we conclude that Dr. Barrington had a potential right to relief that arose from Williams's claim. By regulation, in board proceedings a person other than the injured worker shall join the employee as a party. [25] Unlike the Alaska Civil Rules, board regulations do not otherwise clearly distinguish between permissive and compulsory joinder. [26] 8 AAC 45.040(c) states that a person who may have a right to relief in respect to or arising out of the same transaction ... should be joined. This subsection seems to give the board some discretion in deciding whether to allow or require joinder. But the board's discretion is not absolute; in this case, Dr. Barrington was a necessary party whose absence, as we will see, violated due process. [27] Dr. Barrington could have become a party to Williams's claim before settlement either by filing a claim in his own name and joining his claim to Williams's, or by being joined. [28] A physician or other non-party may not intervene in an existing board case; instead, 8 AAC 45.040(f) states that proceedings to join a person are begun either by a party filing a petition to join the person or by the board serving a notice to join the person. [29] ACS is incorrect in implying that Dr. Barrington could be joined only if he took affirmative steps to be joined as a party. ACS could have joined Dr. Barrington as a party, but did not. The regulation lists factors the board is to consider in deciding whether to join someone. [30] For purposes of Dr. Barrington's case, two of the factors are of particular importance: whether the person's presence is necessary for complete relief and due process among the parties; and whether the person's absence may affect the person's ability to protect an interest, or subject a party to a substantial risk of incurring inconsistent obligations. [31] These factors are substantially similar to those in Alaska Civil Rule 19(a), which addresses compulsory joinder. [32] The decision whether joinder is necessary in a civil suit is a practical one. [33] Our analysis in this case turns on practical considerations as well. In a workers' compensation case, there is often a unity of interest between the employee and her physicians. The employee wants benefits, including future medical benefits, and will present providers' past bills to the board so it can order payment. Here, Dr. Barrington testified that Williams's attorney assured Dr. Barrington that the attorney would present Dr. Barrington's bill to the board, and the attorney indeed filed a copy of the bill with the board. In most cases, joinder of all physicians who have provided treatment would be a spectacularly wasteful expenditure of resources and effort. [34] But in some cases the interests of the employee and the healthcare provider differ sufficiently that the employee is adverse to a medical provider or cannot adequately represent the provider's interest. [35] The interests of the healthcare provider and the claimant diverged in this case. No one disputes that Williams and ACS agreed to settle the case for an amount they knew was inadequate to pay all of Williams's outstanding medical bills. No one gave the healthcare providers notice of the pending settlement or tried to join them so they could introduce evidence that their services were reasonable and necessary and therefore payable by the employer. [36] The board did not try to join them either, but it is unclear whether the board was aware of the lack of unity of interests between Williams and her providers. ACS asserts that the board knew that Williams was settling for an amount that would not cover her bills, but we cannot determine the accuracy of this assertion from the appellate record. The board's awareness of any difference between the amount of the settlement and the total of the unpaid provider bills is relevant to whether Williams was able to protect Dr. Barrington's interest and whether the settlement was in Williams's best interest. [37] The board held no hearing and made no specific findings why the settlement was in Williams's best interest. Settlements that waive medical benefits are presumed not [to be] in the employee's best interest, and will not be approved absent a showing by a preponderance of the evidence that the waiver is in the employee's best interest. [38] This settlement agreement waived medical benefits, so it was presumed not to be in Williams's best interest. ACS asserts that the board was aware that Williams had outstanding medical bills exceeding the settlement amount, but the language of the settlement is ambiguous. The agreement states or implies that all providers will be paid. Thus, the agreement first states, Except as otherwise provided in this Agreement, the parties agree that the employer has paid all compensation and medical benefits which are due as of the date the employee signs this Settlement Agreement. It also states that the settlement amount reflects payment of disputed past medical expenses as well as a waiver of future medical expenses. It then provides that the parties anticipate that the settlement monies are more than sufficient to cover the costs of any future medical treatment that may be necessary. The agreement never specifies the amount of Williams's unpaid bills or which past medical expenses were disputed. [39] The board could reasonably have concluded from the quoted language that ACS was paying Williams enough money to cover all of her past medical bills in addition to some future medical treatments. Given these provisions in the agreement, the board may not have been aware that Williams's and Dr. Barrington's interests diverged; the agreement's quoted representations may have influenced the board's assessment of Williams's best interest as well. Dr. Barrington's absence from the board proceeding affected his ability to protect his interest. The appeals commission determined that Dr. Barrington's common law cause of action against Williams survived the settlement, but text of the pertinent statute does not seem to support this conclusion. Alaska Statute 23.30.097(f) states, An employee may not be required to pay a fee or charge for medical treatment or service provided under this chapter. [40] The appeals commission construed subsection .097(f) as applying while the treatment is not controverted (or a controverted claim has not been decided by the board). The parties appear to agree that if the board determines that a claim is compensable, subsection .097(f) prohibits a healthcare provider from bringing a civil action against an injured worker for covered services. The parties agree that, if the board determined that an injury was not work related, subsection .097(f) would not apply because medical services or treatment would not have been provided under the workers' compensation act. But no board decision establishes that Dr. Barrington's services were not work related. Absent a board determination that the injuries were not work related, subsection .097(f) could well foreclose Dr. Barrington's ability to sue Williams for payment. The appeals commission did not determine whether a settlement decides a controverted claim and, if it does, how it resolves the claim. Language in the commission's decision suggests that a settlement dismisses a workers' compensation claim. Although an approved settlement discharges an employer's liability, it is enforceable as a board order or award, so the settlement does not dismiss a claim. [41] Approval of the settlement here could be construed as deciding that Williams had a covered injury, for there was no other reason for ACS to pay her benefits. If so, Williams's pre-settlement medical care would have been, in the words of subsection .097(f), provided under this chapter, and Dr. Barrington could not sue her for his unpaid services. [42] Apart from the statutory bar, the settlement may also prevent Dr. Barrington from establishing that his services were reasonable and necessary. An employer is only responsible for paying for an injured employee's reasonable and necessary medical expenses. [43] Williams had many unpaid medical bills at the time of the settlement; information Williams later provided the bankruptcy court suggests that the unpaid total was about twice the amount of the workers' compensation settlement. According to ACS, the parties intended Williams to use the settlement money to pay these bills. Some of Williams's medical expenses were for chiropractic care that exceeded the board's frequency standards; the excess treatments were presumptively not reasonable and necessary. [44] The board, in approving the settlement, in effect let Williams decide which treatments were reasonable and necessary. By not giving Dr. Barrington notice of the proposed settlement and an opportunity to present his claim, the board denied him the opportunity to show that the medical care he provided was reasonable and necessary and that other medical care was not. Failure to join Dr. Barrington also made it harder for the board to provide complete relief to the parties and subjected ACS to the risk of incurring inconsistent obligations. [45] As this appeal demonstrates, ACS was not afforded complete relief by the settlement. The board's failure to join Dr. Barrington also exposed Williams and ACS to litigation regarding payment for Dr. Barrington's services. Depending on the outcome of litigation, ACS was at risk of inconsistent obligations. The board has interpreted 8 AAC 45.040 as permitting it to join persons on its own. [46] Because the settlement was ambiguous, the board erred in failing to join Dr. Barrington when there was a real risk that he would be unable to protect his interest and that the existing parties might not be afforded complete relief.