Opinion ID: 1058040
Heading Depth: 3
Heading Rank: 1

Heading: Payments made under the medical payment coverage provision

Text: The trial court ordered Dyer Nursing Home to reimburse State Farm for payments totaling $100,000 made by State Farm to the plaintiff's medical providers under the medical payment coverage provision of the policy. The policy in question provides for medical payments coverage for bodily injuries sustained by any person occupying a vehicle covered under the liability section of the policy. Thus, by virtue of being a passenger in the vehicle operated by Scarlet Caton, the plaintiff qualified for medical payments coverage up to the amount of $100,000. However, the policy specifically provides that medical payment coverage benefits are not payable to the extent workers' compensation benefits are required to be payable. State Farm argues that it is entitled to reimbursement for the $100,000 paid to the plaintiff under the medical payment coverage because the workers' compensation law requires that the employer pay for the cost of all reasonable and necessary medical care. See Tenn.Code Ann. § 50-6-204(a)(1) (2005). The defendant responds that not only did the trial court err in requiring the defendant to reimburse State Farm for the $100,000 in medical payments made, but that the court should give the defendant a credit for the full amount of all sums paid to the plaintiff or her healthcare providers by State Farm. The defendant relies upon Tennessee Code Annotated section 50-6-112, which gives an employer who has paid workers' compensation benefits to an employee a right of subrogation against any recovery that the employee obtains from a third-party for the same injury. Tennessee Code Annotated section 50-6-204(a)(1), part of the workers' compensation statutory scheme, makes it crystal clear that the employer is obligated to the employee to pay reasonable and necessary medical expenses for work-related injuries. Moore v. Town of Collierville, 124 S.W.3d 93, 99 (Tenn.2004). Where an employer is liable for such medical expenses, the employer must pay the medical providers directly for the costs of such care, rather than the employee personally. See Staggs v. Nat'l Health Corp., 924 S.W.2d 79, 81 (Tenn.1996) (citing W. Am. Ins. Co. v. Montgomery, 861 S.W.2d 230, 231 (Tenn.1993)). However, where the employee has personally paid for the disputed medical treatment, the employer must reimburse the employee personally. Id.; see also State Auto. Mut. Ins. Co. v. Hurley, 31 S.W.3d 562, 565 (Tenn.Workers Comp.Panel 2000). Similarly, where the employee's health insurance carrier has paid for disputed medical expenses, the employer is required to reimburse the health insurance carrier. See Moore, 124 S.W.3d at 99. As we noted in Moore , The legislature has decided that it is the employer's statutory responsibility to pay reasonable and necessary medical expenses for work-related injuries and that workers' compensation provisions should be construed to achieve their remedial purpose.... [O]nce a finding has been made that the employee's injury is work-related, the health insurer can seek reimbursement from the employer for expenses paid on the employee's behalf because health insurance contracts do not cover work-related injuries. Before such a finding is made, however, employees may have difficulty recovering expenses from either the employer or a health insurer and could ultimately be forced to either pay for their own medical expenses or delay treatment altogether. Clearly, this is not a result envisioned under the workers' compensation statutes. Id. at 99 (internal citations and footnote omitted). In this case, instead of a health insurer paying for the medical expenses, the liability insurer for the driver of the automobile paid $100,000 in medical expenses. When this was paid, the employer was denying that the injury was covered by workers' compensation, thus forcing the plaintiff to seek financial compensation elsewhere. However, as we have determined, the injury was in fact covered under the workers' compensation statute, and therefore, the employer is liable for all necessary and reasonable medical expenses. See Tenn. Code Ann. § 50-6-204(a)(1). The State Farm policy specifically states that medical benefits are not payable under the policy if the medical expenses are covered by workers' compensation. As such, the parties in this case are in a situation almost identical to that in Moore , in that a third-party insurer paid for medical expenses which it was not obligated to pay because those expenses were covered by workers' compensation and were required to be paid by the employer. We therefore hold that State Farm is entitled to reimbursement for the medical payments made to the plaintiff's medical providers.