Court Upholds C&R Allowing for Closure of Meds with an MSA Years After Original Settlement

The claimant in this case, Joseph Bosco, suffered a low back sprain/strain and a disc herniation at work. Lehigh Specialty Melting v. Workers’ Comp. Appeal Bd. Bosco, 2021 Pa. Commw. Unpub. LEXIS 355 His claim was settled by a Compromise and Release Agreement (C&R) which was approved by a Workers’ Compensation Judge on May 19, 2014. An amended order was entered on June 10, 2014 ordering the employer to continue paying for medical expenses until an MSA was approved by Medicare.

On September 24, 2018, the employer filed a petition seeking approval of a C&R along with other petitions. The employer alleged that it had obtained approval for an MSA but the claimant refused to execute paperwork necessary to finalize the same.

The claimant responded that the MSA failed to take into account all of the treatment being prescribed for the claimant at that time, namely medical marijuana, and that waiting four years to secure CMS approval of an MSA had prejudiced the claimant. At a prior hearing, however, the claimant testified that he was aware that the employer could wait to exercise its right to seek approval for an MSA for years and that, once that was done and the MSA was funded, the medical benefits would end.

The Worker’s Compensation Judge held in favor of the employer, finding that the claimant was attempting to essentially re-write the prior C&R to include payment for services that Medicare does not cover. The claimant appealed that decision.

On appeal, the Workers’ Compensation Board agreed with the claimant and determined that, as a result of a change in circumstances, there was no meeting of the minds with regard to the C&R and, as such, it was unenforceable. The circumstance that changed was the fact that medical marijuana has become approved in Pennsylvania subsequent to the approval of the initial C&R and was being prescribed for the claimant. Because Medicare does not pay for medical marijuana, funds for the same could not be included in an MSA. The employer appealed the Board’s decision.

Finding that there was no evidence that the initial C&R had been entered into as a result of fraud, duress, mutual mistake or unilateral mistake caused by an opposing party, the Pennsylvania Court overturned the Board’s decision and reinstated the decision of the Workers’ Compensation Judge upholding the initial C&R.

Ensuring that settlement documents include the necessary and proper language with regard to Medicare Secondary Payer issues is extremely important. If you have questions or would like us to review settlement documents for you in this regard, please let us know. We will be happy to assist.