Westfield Insurance Company v. Michael Gilliam
Misc. No. 4
IN THE COURT OF APPEALS OF MARYLAND
February 8, 2022
September 2021 Term; United States District Court
Motor Vehicle Insurance – Uninsured Motorist Benefits – Statutory Offset for Benefits Recovered Under Workers’ Compensation Claim. When a person injured in an automobile accident during the course of employment is eligible for benefits under both the workers’ compensation law and the uninsured motorist coverage of a motor vehicle insurance policy, Maryland law seeks to avoid a duplication of benefits by means of an offset provision in the statute governing motor vehicle insurance. Under
Motor Vehicle Insurance – Uninsured Motorist Benefits – Statutory Offset for Benefits Recovered Under Workers’ Compensation Claim – Medical Benefits. As part of benefits provided under the workers’ compensation law, a workers’ compensation insurer is to pay medical benefits on behalf of a claimant “in the amount that prevails in the same community for similar treatment of an injured individual with a standard of living that is comparable to that of the covered employee.” Providers must accept those amounts, set by the Fee Guide of the Workers’ Compensation Commission, in satisfaction of the full cost of treatment. An injured person who has received such medical benefits under the workers’ compensation law may also seek benefits under the uninsured motorist coverage of an appropriate motor vehicle insurance policy. Assuming that the fair and reasonable value of the medical treatment exceeds the payments made by the workers’ compensation insurer according to the Fee Guide, that difference is not part of the offset against uninsured motorist benefits under
Opinion by McDonald, J.
Filed: February 8, 2022
The United States District Court for the District of Maryland has certified to this Court, pursuant to statute and rule,1 a question of law regarding the calculation of the damages payable to an injured person under the underinsured motorist provision of a motor vehicle insurance policy (“auto policy“) when a workers’ compensation insurer has paid the injured person‘s medical expenses at rates set by the State Workers’ Compensation Commission. Maryland law permits the auto policy insurer to reduce its payment of benefits under the underinsured motorist coverage to the extent that the injured person has “recovered benefits under the workers’ compensation laws ... for which the provider of the workers’ compensation benefits has not been reimbursed.”2
The case before the federal district court arose after Michael Gilliam was injured in an automobile accident while driving in the course of his employment. He received payments from his employer‘s workers’ compensation insurer and the other driver‘s liability insurer, and now seeks to recover, from the insurance policy covering the vehicle he was driving (issued by Westfield Insurance Co.), the amounts by which the other driver was underinsured. The health care providers who treated his injuries had generated bills in face amounts greater than the amounts set by the Workers’ Compensation Commission, but (as required by Maryland law) accepted payments at those lower amounts in full satisfaction for their services. The question asked of this Court is whether the difference between the amount of those bills – or perhaps more precisely, the fair and reasonable value of those providers’ services – and the payments made by the workers’ compensation insurer constitutes a “benefit” that the injured person has “recovered” under the Workers’ Compensation Act that is to be offset against any recovery the person would obtain from the underinsured motorist coverage of the auto policy.
For the reasons set forth in this opinion, we hold that only the amount that the workers’ compensation insurer actually paid for medical expenses is part of the statutory offset against underinsured motorist benefits. Thus, a difference between a higher face amount billed by a health care provider and the amount actually paid by the workers’ compensation insurer is not part of that offset.
I
Legal Landscape
The question of law certified by the federal district court arises from litigation over insurance coverage for a motor vehicle tort. It concerns damages related to the plaintiff‘s resulting medical treatment and involves the interplay between the State workers’ compensation law and motor vehicle insurance law as they provide compensation for the victim of an automobile accident. It thus arises against the backdrop of tort and contract law. To set the stage for that question – and our answer – we first review its legal context.
A. Damages for Health Care Treatment Occasioned by a Tort
An individual who is the victim of a tort may recover compensatory damages
1. The Fair and Reasonable Value of Health Care Services
Determining the fair and reasonable value of health care services is not easy. There are often two readily available benchmarks: (1) the amount billed by health care providers and (2) the amount actually paid – whether by the patient or by some other payor.3 But those two benchmarks seldom align. And neither figure alone may represent the actual value of the services. Higgs v. Costa Crociere S.P.A. Co., 969 F.3d 1295, 1311-14 (11th Cir. 2020). The fair and reasonable value of health care services can be quite distinct from the amounts billed by health care providers or the amounts actually paid to the providers by the tort victim or other payor. Shpigel, 357 Md. at 128-29.
In many instances the nominal list price generated by a health care provider billing service may be a less meaningful indicator of market value than the MSRP4 sticker on a new car in an auto showroom.5 See George A. Nation III, The Valuation of Medical Expense Damages in Tort: Debunking the Myth That Chargemaster-Based “Billed Charges” Are Relevant to Determining the Reasonable Value of Medical Care, 95 Tul. L. Rev. 937 (2021). That is because, among other things, health care billing involves nominal prices seldom actually paid, alternative charges negotiated between providers and insurers, and rates set by government entities. “The complexities of health care pricing structures make it difficult to determine whether the amount paid, the amount billed, or an amount in between represents the reasonable value of medical services.” Stanley v. Walker, 906 N.E.2d 852, 857 (Ind. 2009). And, “[b]ecause this market structure may obscure the real value of medical services, courts have struggled to square tort law with the realities of modern healthcare finance.” Higgs, 969 F.3d at 1309.
Under Maryland law, the amount of a bill or an actual payment is inadmissible without evidence to prove that the bills or payments actually reflect the “fair and
2. Collateral Source Rule
As a general rule, whatever value can be determined for health care treatment required as a result of a tort, “a plaintiff is entitled to but one compensation” for the loss, regardless of whether there are multiple causes of action or multiple tortfeasors. That principle is sometimes called the “one recovery rule.” Beall v. Holloway-Johnson, 446 Md. 48, 70 (2016); Reeves, 474 Md. at 67.6 And, generally, under a sometimes countervailing principle known as the “collateral source rule,” the tortfeasor should be responsible for that recovery, regardless of whether the victim has another source of compensation. Haischer v. CSX Transp., Inc., 381 Md. 119, 132 (2004).7
The label “collateral source rule” actually denotes two related common law “rules“: one is a substantive principle of damages; the other is an evidentiary rule. The substantive principle of damages provides that an injured person is ordinarily entitled to full compensation from the tortfeasor, regardless of any compensation the person has received from sources unrelated to the tortfeasor with respect to the same injury. Haischer, 381 Md. at 132. Such collateral benefits may include insurance payments, negotiated lower rates, statutory benefits, or simply an affluent family member‘s goodwill. See Restatement (Second) of Torts §920A, comment c (providing examples of collateral benefits not subtracted from the plaintiff‘s recovery from the tortfeasor).
The primary purpose of the collateral source rule, as substantive law, is to ensure that a tortfeasor does not escape liability by enjoying a benefit accruing to the injured party. Haischer, 381 Md. at 132; see also Restatement (Second) of Torts §920A, comment b. Thus, a plaintiff may recover damages for a harm for which the plaintiff has already been compensated and, as a result, in some instances be made “more than whole.” Higgs, 969 F.3d at 1310. Given a choice between a windfall for the tortfeasor and a windfall for the tort victim, the law favors the victim. In addition, to the extent that the collateral source is an insurance policy, the rule favors the maintenance of insurance. Haischer, 381 Md. at 132. In that sense, the rule ensures that a plaintiff is not penalized for prudence.
In support of that substantive principle of damages, the evidentiary aspect of the collateral source rule ordinarily renders inadmissible evidence that a plaintiff received compensation from a third party. See Eastern Shore Title Co. v. Ochse, 453 Md. 303, 341-43 (2017) (discussing application of collateral source rule and exceptions to the rule).
The matter becomes more complicated when the tort is an automobile accident to which motor vehicle insurance applies – particularly when the tortfeasor‘s liability coverage is inadequate and the tort victim must look to the underinsured motorist coverage under the policy applicable to the
B. Medical Benefits Paid by Workers’ Compensation Insurance
1. Generally
The Maryland Workers’ Compensation Act is intended to ensure that employees receive sufficient and timely compensation for work-related injuries and occupational diseases regardless of fault. As amended and recodified since its initial enactment more than a century ago,8 the law is now codified in
The Workers’ Compensation Commission (“Commission“) administers the law. Benefits under the Act are generally paid by an insurer with whom an employer contracts or by a self-insured employer.9 For simplicity, in this opinion, we shall refer to a payor of workers’ compensation benefits as the “WC insurer.”
2. Medical Benefits
As part of the compensation provided by the law, the WC insurer may be required to provide and pay for health care services for the injured employee occasioned by the work-related injury or occupational disease.
The fees and other charges for medical services approved by the Commission are to be limited to “the amount that prevails in the same community for similar treatment of an injured individual with a standard of living that is comparable to that of the covered employee.”
A health care provider that treats an injured individual as part of the individual‘s benefits under the Act may not charge more than the amounts set by the Commission in the Fee Guide without the Commission‘s approval.
3. Coordination of Workers’ Compensation Benefits with Other Benefits
When an employee covered by the law incurs a work-related injury, the WC insurer is to pay benefits under that law to the covered employee. However, the workers’ compensation law “neither excuses third-parties from their own negligence nor limits their liability.” Great Atl. & Pac. Tea Co. v. Imbraguglio, 346 Md. 573, 583 (1997).
If an injured employee brings an action against a tortfeasor related to the incident underlying the employee‘s workers’ compensation claim, the collateral source rule excludes evidence that the plaintiff previously received workers’ compensation benefits.11 Restatement (Second) of Torts §920A, comment c; Ochse, 453 Md. at 341-42. However, the WC insurer is subrogated to the employee‘s claim against the tortfeasor and has a statutory lien on any recovery with respect to that claim in an amount equivalent to the workers’ compensation benefits paid.
It is sometimes in the WC insurer‘s interest to accept less than the full amount of a lien in satisfaction of the lien as part of the employee‘s settlement of a claim against a culpable tortfeasor. See Richard Gilbert, et al., Maryland Workers’ Compensation Handbook, §15.07[7]; Clifford Sobin, 2 Maryland Workers’ Compensation (Sept. 2021 update) §25:21 (“Many employer/insurers will agree to reduce their lien to less than the statutory lien if there is a significant issue which may impair the ability to successfully prosecute the third party claim.“); cf.
The WC insurer‘s statutory lien does not apply, however, to a particular source of recovery of the tortfeasor‘s liability
C. Underinsured Motorist Coverage
1. Generally
In Maryland, an owner of a registered motor vehicle must carry prescribed minimum levels of liability and other types of auto insurance.
UM/UIM coverage aims to “provide an injured insured with resources equal to those which would have been available had the tortfeasor carried liability coverage equal to the amount of uninsured motorist coverage which the injured insured purchased from his own insurance company.” Connors, 442 Md. at 475 (quoting Waters v. U.S. Fidelity & Guar.Co., 328 Md. 700, 714 (1992)).14 It is often referred to as a form of “first-party coverage,” based on the insurance contract under which the UM/UIM insurer directly covers the injured insured person when “third-party coverage” is inadequate – i.e., “the at-fault tortfeasor has no liability insurance or insufficient insurance funds.” TravCo Ins. Co. v. Williams, 430 Md. 396, 403 (2013). However, this coverage also has aspects of third-party coverage, as it is based not only on the insurance contract, but also on a showing of fault of the alleged tortfeasor. See Andrew Janquitto, Maryland Motor Vehicle Insurance §8.5 at 323-24 (3d ed. 2011).
2. Coordinating Workers’ Compensation Benefits and UM/UIM Benefits
An employee who receives workers’ compensation benefits as a result of an automobile accident during the course of employment may also have a claim against the alleged tortfeasor and, if the tortfeasor‘s liability coverage is inadequate, a claim for UM/UIM coverage under the relevant motor vehicle insurance policy. In that case, the benefits provided by the WC insurer may overlap those provided by the
As noted above, the WC insurer has a statutory lien against any recovery from the tortfeasor or the tortfeasor‘s liability insurer. However, as also noted earlier, the statutory lien under the workers’ compensation law does not extend to a recovery based on UM/UIM coverage. Instead, the State insurance law provides that UM/UIM benefits are reduced as a result of the claimant‘s receipt of worker‘s compensation benefits. The statute provides for an offset against UM/UIM benefits as follows:
Benefits payable under the coverages described in ... [IN §] 19-509 [uninsured motorist coverage] of this subtitle shall be reduced to the extent that the recipient has recovered benefits under the workers’ compensation laws of a state or the federal government for which the provider of the workers’ compensation benefits has not been reimbursed.
D. Some Principles to Apply
The discussion above yields the following principles, some in tension with each other, pertinent to our decision in this case:
- Although the victim of a tort is entitled to only one recovery for the injuries incurred, a wrongdoer – i.e., a tortfeasor – should be responsible for the damages caused by the tortfeasor‘s conduct and should not benefit from the victim‘s prudence.
- The workers’ compensation and UM/UIM laws are to be liberally construed to compensate an injured person, but any construction of those laws must be consistent with the statutory language and legislative purpose.
- Under UM/UIM coverage in a motor vehicle insurance contract, the insurer steps into the shoes of the tortfeasor and, subject to policy limits, is to provide the remedy that would otherwise be provided by a similarly-insured tortfeasor.
- Consistent with the one recovery rule, duplication of benefits is avoided through subrogation, liens, and offsets.
The certified question in this case concerns the application of the offset provided by
Background
A. The Accident and Insurance Claims
On January 6, 2017, while driving a vehicle provided by his employer, Mr. Gilliam was rear-ended by another vehicle. The driver of the other vehicle had a motor vehicle insurance policy with a liability coverage limit of $30,000.17
As the driver of a company vehicle, Mr. Gilliam was covered by his employer‘s motor vehicle insurance policy with Westfield. The Westfield policy included UM/UIM coverage with a policy limit of $1,000,000. Mr. Gilliam‘s employer also carried workers’ compensation insurance.18
Mr. Gilliam filed a workers’ compensation claim with his employer‘s WC insurer. Mr. Gilliam‘s health care providers billed Mr. Gilliam a total of $243,399.33 for services related to his care following the January 6 incident. In accordance with the Fee Guide of the Workers’ Compensation Commission, the WC insurer paid $118,369.15 to the health care providers for the health care services provided to Mr. Gilliam.19 As indicated earlier, the health care providers were required to accept those amounts as full compensation for their services unless they sought an exception to the Fee Guide; apparently, none of the providers did so. Thus, neither Mr. Gilliam, nor his employer, nor the WC insurer was responsible for paying any additional sums to the health care providers.
In addition to the medical benefits, the WC insurer paid Mr. Gilliam $510,316.47 in other benefits related to the accident.20 In sum, the WC insurer paid a total of $628,685.62 ($118,369.15 medical payments + $510,316.47 other benefits). The WC insurer asserted a statutory lien under the workers’ compensation law in that amount against any compensation related to the accident that Mr. Gilliam might recover from a third-party tortfeasor.
In fact, Mr. Gilliam did recover some compensation from the tortfeasor. The tortfeasor‘s motor vehicle insurer paid Mr. Gilliam a settlement award of $30,000.00 – the policy limits.21 The WC insurer accepted one-third of that amount – $10,000.00 – in satisfaction of its statutory lien.22
Mr. Gilliam also made a claim against Westfield under the UIM portion of his employer‘s motor vehicle insurance policy with Westfield. As indicated earlier, any recovery Mr. Gilliam might obtain from
Mr. Gilliam and Westfield were apparently unable to resolve his UIM claim informally. Litigation ensued.
B. The Lawsuit
On October 29, 2019, Mr. Gilliam filed a one-count complaint in the Circuit Court for Baltimore City asserting a breach of contract claim against Westfield. Westfield removed the case to the federal district court on the basis of the parties’ diversity of citizenship. Although Mr. Gilliam‘s complaint is not in the record before us, we understand that he seeks, as one element of damages in the case, the fair and reasonable value of the medical treatment necessitated by the accident.23
Mr. Gilliam‘s counsel has indicated that he intends to argue at trial that the health care providers’ bills represent the fair and reasonable value of the health care services Mr. Gilliam received. Westfield‘s counsel in turn indicates that Westfield intends to challenge “as appropriate” whether those amounts represent the fair and reasonable value of necessary and appropriate treatment resulting from the accident.
In federal court, the parties filed cross-motions for partial summary judgment concerning the offset based on workers’ compensation benefits. The parties agree that the terms of the Westfield policy and the UM/UIM statute allow Westfield to deduct the amount paid by the tortfeasor‘s insurer ($30,000.00) from the policy limits of UIM coverage provided by the Westfield policy. See
What the parties do not agree on – and the matter at issue in the cross-motions for summary judgment – is whether the statute permits Westfield to deduct the difference between the face amount of the bills submitted by the health care providers ($243,399.33) and the amount paid by the WC insurer ($118,369.15) to the providers – that is, $125,030.18. In Westfield‘s view, that amount is a “recovered benefit” for purposes of
The resolution of this dispute turns on the proper interpretation of
For that purpose, the federal district court has certified a question of law concerning the interpretation of the statute that we rephrase as follows
For purposes of determining the reduction of a plaintiff‘s underinsured motorist benefits required by
IN § 19-513(e) , does Maryland law treat a difference between the amount of medical bills submitted by a workers’ compensation claimant‘s health care providers and a lower amount actually paid to the providers by a workers’ compensation insurer to satisfy those bills, pursuant to the Fee Guide, as a benefit recovered by the plaintiff under the Maryland Workers’ Compensation Act?
The certification order designated Westfield as the appellant in this Court and, accordingly, Mr. Gilliam is to be treated as appellee.
Neither the Maryland workers’ compensation law nor the UM/UIM statute includes the phrase “write down.” Nor does the workers’ compensation law necessarily contemplate that medical bills that exceed payments under the Fee Guide represent the fair and reasonable value of medical services. Accordingly, we have rephrased the question as indicated in the text, as permitted by the statute governing certified questions.
III
Discussion
A. Certified Questions of Law
Under the Maryland Uniform Certification of Questions of Law Act,
We note that the premise of the question before us is that the fair and reasonable value of the medical services, as ultimately determined in the action by Mr. Gilliam against Westfield in federal court, will exceed the amount actually paid by the WC insurer to Mr. Gilliam‘s health care providers. Perhaps that is a reasonable assumption; perhaps it is not. It is not our role to resolve that factual question in answering a certified question of law. But we will accept that premise in answering the legal question.26
B. The TravCo Case
Nearly a decade ago, in a case that also arose from an automobile accident and that also resulted in a workers’ compensation claim by the injured person,27 the
In answering that question, this Court assumed that the applicable workers’ compensation law treated “write-downs” as “benefits,” that the claimant received such benefits, and that the WC insurer had not been reimbursed for those benefits. 430 Md. at 412. In those circumstances, the Court concluded that the offset under
Because the workers’ compensation claim in TravCo was governed by the law of the District of Columbia, not the law of Maryland, this Court essentially answered the certified question of law with another question of law – are “write-downs” benefits under the workers’ compensation law of the District of Columbia? And that was a question that this Court could not answer in the context of a certified question of Maryland law.
The question posed in TravCo thus differs from the question in this case in two respects. First, the question posed in TravCo assumed that the difference between a medical bill and the amount paid under a workers’ compensation law – what was referred to as a “write-down” – could be a benefit under the applicable workers’ compensation law. By contrast, that is the essence of the question in this case. Second, the issue in that case ultimately turned on whether the law of the District of Columbia recognized a “write-down” as a benefit under its workers’ compensation law. By contrast, in this case, Maryland law governs Mr. Gilliam‘s workers’ compensation claim and we do not assume that a “write down” – however defined – necessarily has any standing as a benefit under that law. The question posed by the federal district court in this case is resolved solely by reference to Maryland law – in particular,
C. Statutory Construction of IN § 19-513(e)
Longstanding principles of statutory construction guide the interpretation of
1. Text in Context
Under
The statutes governing UM/UIM coverage – of which
In ordinary parlance, the word “benefit” could mean any number of things besides a monetary payment.28 However, statutory interpretation does not occur in the silo of a single word; the context of a word or phrase in a statute, and other language that relates to the word or phrase, is critical to understanding its meaning. Nationstar, 476 Md. at 169. In the context of
Related language in
Second, the statute refers to benefits “for which the provider of the workers’ compensation benefits has not been reimbursed.”
While the Workers’ Compensation Act also does not define “benefit,” the use of the term in that statute supports the same reading. Subtitle 6 of the Act (entitled “Benefits“) identifies the different types of workers’ compensation benefits available to a claimant (e.g., temporary partial disability, temporary total disability, wage reimbursement, death benefits, vocational rehabilitation benefits). See
There is no reference in the workers’ compensation law to “write-downs” or discounts of medical bills – much less any characterization of such a thing as a “benefit” under that law. Moreover, it is impossible for Mr. Gilliam to “reimburse” the WC insurer for an amount it never paid – i.e., the $125,030.18 difference between what the health care providers billed and what they accepted as full payment for their services. The face amount of a bill generated by a provider simply has no role under the workers’ compensation law governing medical benefits. The fact that a “reimbursement” cannot occur – even if Mr. Gilliam for some reason decided to make a voluntary payment of that amount to the WC insurer – indicates that it is not a “workers’ compensation benefit” for purposes of
2. Legislative History
The legislative history of the statute confirms that the phrase “workers’ compensation benefit” does not include the amount by which the face amount of a health care provider‘s bill may differ from the charge allowed by the Fee Guide. For our purposes, there are three key episodes in the legislative history of
1972 – Enactment of compulsory insurance law including benefits coordination. The predecessor of
1996 – Recodifying coordination provision as
2001 – Amendment of
The legislative history of the compulsory insurance law, and of
3. Consequences of Alternative Constructions
To compare the alternative interpretations proposed by Westfield and Mr. Gilliam, we consider three simplified scenarios in which a person injured in an automobile accident in the course of the person‘s employment seeks compensation for those injuries. For that purpose, a little math is helpful. To make the computations easier, we use round numbers.
For each scenario, we assume that the injured person‘s total damages equal $1,000,000. The WC insurer pays $150,000
The three scenarios are:
(1) an accident involving a fully insured tortfeasor against whom the injured person obtains a judgment of $1,000,000 (i.e., no UIM claim);
(2) an accident involving an underinsured tortfeasor whose insurance covers only $100,000 of the injured person‘s damages. The injured person makes a UIM claim against a policy with a $1,000,000 policy limit. In this scenario, the offset under
(3) the same facts as scenario 2, except that, in this scenario, the offset under
(1) WC claim and fully insured tortfeasor (no UIM claim).
The injured person obtains a judgment against the tortfeasor for $1,000,000. The WC insurer has a statutory lien against that judgment in the amount of $750,000. Assuming the WC insurer obtains the full amount of its lien, the injured person nets $250,000 from the judgment against the tortfeasor. This can be represented as follows:
| Net Recovery From Fully Insured Tortfeasor (no UIM Claim) | |
|---|---|
| Damages Award | $1,000,000 |
| WC Insurer Statutory Lien | ($750,000) |
| Net Recovery | $250,000 |
(2) WC claim and UIM claim; x part of offset (Westfield‘s position).
The injured person recovers $100,000 from the tortfeasor‘s liability insurer. The injured person also makes a claim against the applicable UIM coverage. Pursuant to
| | |
|---|---|
| Tortfeasor Liability Coverage | $100,000 |
| UIM Policy Limits | $1,000,000 |
| Reduction of UIM Limits by Liability Recovery | ($100,000) |
| WC Insurer‘s Statutory Lien | ($100,000) |
| Offset for WC Benefits: | ($650,000 + x) |
| WC Non-Medical Payments | ($600,000) |
| WC Medical Payments and Discount | ($150,000 + x) |
| Reimbursed WC Benefits (Lien) | $100,000 |
| Net Recovery | $250,000 – x |
(3) WC claim and UIM claim; x not part of offset (Mr. Gilliam‘s position).
The injured person recovers $100,000 from the tortfeasor‘s liability insurer. The injured person also makes a claim against the applicable UIM coverage. Pursuant to
| Net Recovery From Tortfeasor and UIM Claim After WC Offset | |
|---|---|
| Tortfeasor Liability Coverage | $100,000 |
| UIM Policy Limits | $1,000,000 |
| Reduction of UIM Limits by Liability Recovery | ($100,000) |
| WC Insurer‘s Statutory Lien | ($100,000) |
| Offset for WC Benefits: | ($650,000) |
| WC Non-Medical Payments | ($600,000) |
| WC Medical Payments | ($150,000) |
| Reimbursed WC Benefits (Lien) | $100,000 |
| Net Recovery | $250,000 |
As explained above, the goal of the UM/UIM coverage is to place the injured person in the same position as if the person had been injured by a tortfeasor with liability insurance equivalent to the UIM coverage. Including x as part of the offset under
4. Summary
In this case, we do not know what the fact finder in the trial in federal court will determine to be the fair and reasonable value of the health care services Mr. Gilliam received as a result of the accident and therefore to what extent, if at all, that value exceeds the $118,369.15 paid by the WC insurer. In short, we do not know the value of x in this case.33 Mr. Gilliam will apparently argue that it equals $125,030.18 – the difference between the face amount of the provider bills ($243,399.33) and the amount paid by the WC insurer ($118,369.15); Westfield may argue otherwise. For purposes of answering the question of law presented to us, the value of x does not matter. Whatever it is, it is not part of the offset under
This result places Mr. Gilliam in the same position as if he had been injured by a tortfeasor with insurance coverage equivalent to that of the UIM coverage of his employer‘s motor vehicle insurance policy. This outcome not only interprets “workers’ compensation benefit” consistently with its usage in the UM/UIM statutory scheme, but also serves the legislative purposes of both the workers’ compensation law and the UM/UIM law: compensating the employee, see Podgurski, 374 Md. at 148; placing the claimant of UIM coverage in the same position as if the tortfeasor had been sufficiently insured, see Waters, 328 Md. at 714; and avoiding double recovery by the employee from both the WC insurer and the UIM insurer, see State Farm, 283 Md. at 675. We hold that the difference between the amount nominally billed for Mr. Gilliam‘s health care and the amount the WC insurer actually paid is not a “recovered benefit” under
IV
Conclusion
The federal district court has asked whether a positive difference between (1) the fair and reasonable value of health
For the reasons set forth in this opinion, the answer to that question is “no.”
CERTIFIED QUESTION OF LAW ANSWERED AS SET FORTH ABOVE. COSTS TO BE DIVIDED EQUALLY BETWEEN THE PARTIES.
Notes
For purposes of determining the reduction of a plaintiff‘s underinsured motorist benefits required by
The injured employee was covered by a Maryland motor vehicle insurance policy issued by TravCo and made a claim under that policy for UM benefits. The administrator of workers’ compensation benefits for the District of Columbia asserted a subrogation right – presumably under the workers’ compensation law of the District – against any UM benefits recovered by the employee. TravCo conceded that the injured employee was entitled to UM benefits under the policy, but the parties disagreed as to whether the “write-downs” should be included as part of the offset against UM benefits under