After leaving his job working with silica sand, the Employee suffered irreversible end stage renal disease and kidney failure. He subsequently underwent significant medical treatment and claimed medical benefits at the time of the hearing in excess of $1.5 million. The Employee’s own treating physicians differed on whether or not the Employee’s kidney failure was causally related to his previous work with silica sand. However, his nephrologist Dr. Canas did feel that the kidney failure was related to his employment. The Employer and Insurer acquired an independent medical examination with Dr. Brown who opined that the work with silica sand was not a substantial contributing factor to the Employee’s condition.
At hearing the Compensation Judge found that the kidney failure was a result of the Employee’s work duties and that the claim was compensable. The Employer and Insurer asked the Compensation Judge to find that the intervening medical providers who were partially paid by Medicaid, could not demand payment in full (Spaeth) according to the contractual obligations under federal law. The Compensation Judge ruled that she had no jurisdiction to consider federal law and ordered that the intervenors be paid according to fee schedule. The Employer and Insurer appealed to the W.C.C.A., and the W.C.C.A. affirmed the Findings and Order of the Compensation Judge.
On appeal to the Minnesota Supreme Court, the Employer and Insurer argued that there was no medical foundation for the compensability of the claim and that federal law is clear and unambiguous that medical providers must accept partial payments from Medicaid as payment in full for the treatment rendered. The Minnesota Supreme Court first affirmed the Compensation Judge in her finding that there is substantial evidence supporting the decision that the Employee suffered kidney failure as a result of his employment.
The more interesting question is whether the Employer and Insurer are liable to the medical providers for the remainder of Medicare’s partial payment, the “Spaeth balance claim.” The Minnesota Supreme Court found that federal law was clear and unambiguous in that medical providers who accept partial payments from Medicaid must accept said funds as payment in full for the medical treatment rendered. This federal law preempts any state law. Therefore, the Minnesota Supreme Court expressly declined to expand the Spaeth decision to medical benefits paid for by Medicaid.
This decision is extremely important to insurers. It will eliminate any and all claims for medical benefits that have already been partially paid by Medicaid.