Employer Not Entitled to Reimbursement for Overpayment of Indemnity Benefits
An employee is entitled to 50% waiting time penalties on all indemnity benefits not paid after 30 days’ notice if no reasonable factual or legal controversy exists. Neb. Rev. Stat. §48-125(1). For this reason, employers are often tempted to pay indemnity benefits immediately. However, if an employer pays indemnity benefits and later it is determined that benefits were overpaid, it will likely not be refunded the amount of the overpayment, as evidenced in Akers v. Pratt Audio Visual, Doc. 213 No. 1019 (August 2014).
In Akers, the employee injured his low back and left shoulder when he slipped and fell on ice. After Akers underwent an arthroscopy, his physician, Dr. Strasburger, determined that he had a 12% permanent partial impairment of his left shoulder. The employer paid Akers permanent partial disability benefits based on the 12% impairment rating. Later, Akers was examined by Dr. Gammel, who determined he only had a 1% permanent partial impairment of the shoulder. While the Court noted that it is generally more persuaded by the opinions of the treating physician, the Court found Dr. Gammel’s opinion to be more persuasive because Dr. Strasburger’s report “did not discuss his reasoning or any foundation for the assignment of the 12 percent rating.” The Court therefore found that Akers had a 1% impairment rating to his left shoulder rather than 12%.
The employer argued that it was entitled to reimbursement from Akers for the overpayment of the impairment rating. The Court declined to order such a repayment, finding that it did not have authority to do so. The Court noted that the payment to Akers for the 12% impairment rating “was made and accepted based upon the rating provided by his then treating physician. It was not until more than three years later that the defendant obtained a contrary opinion. Again, the Court declines to order the plaintiff to repay any of the indemnity benefits he has been paid to date.” Instead, the Court determined the employer was entitled to a credit for medical and indemnity expenses paid to and on behalf of Akers.
This case demonstrates that it is not always the best course of action to pay indemnity benefits immediately based on an impairment rating. However, as mentioned above, the employer must also not wait too long to pay indemnity benefits, as that may entitle the employee to a waiting time penalty. For more information and advice on paying indemnity benefits based on impairment ratings, please contact Sara Hughes at firstname.lastname@example.org or any of the Baylor Evnen workers’ compensation attorneys at (402) 475-1075.