Past Medical Bills and Attorney Fees in Missouri: Who determines? Erwin v. Midway Arms

Note:  While employed as an attorney with my prior firm, McAnany, Van Cleave & Phillips, P.A., I was involved in the appeals process on this case.  Although neither I nor my prior firm were the original attorneys involved in the case and did not try the case before the Administrative Law Judge, I was the lead attorney on the appeal to the Labor and Industrial Relations Commission.  I remained involved in the appellate process until my retirement from the firm on December 31, 2024.  I have tried to remove any bias I may have from this analysis, but please feel free to comment if you think there’s something I misstated or omitted.

On March 4, 2025, the Missouri Court of Appeals for the Western District handed down a decision that addressed two issues that cause contention among attorneys practicing in the workers’ compensation arena.  In Michael Erwin v. Midway Arms, Inc., WD87161, the court addressed two issues, both resolved by the Labor and Industrial Relations Commission in favor of the Employer.  The first was an award of past medical bills from the Administrative Law Judge that was reversed by the Commission.   The second was an award of penalties for an unreasonable defense, again reversed by the Commission.  The Court of Appeals reversed the former but affirmed the latter.

For the most part, the facts of this case were not in dispute.  The Employee, Michael Erwin, suffered a low back injury on January 3, 2017 while lifting a tote while at work.  He reported the injury and was sent to a doctor, where he was diagnosed with a herniated disc at L5-S1.  On June 7, 2017, the doctor released him from care and deemed him to be at maximum medical improvement, although he did provide him with a sixty-day prescription for pain pills and muscle relaxants. 

Three weeks later, his attorney sent a letter to the Employer’s attorney indicating that his client was still having problems and was in need of additional care.  A week later, the attorney followed up, this time indicating his client had become suicidal from the pain.  The Employer’s attorney replied, indicating that they needed to take the Employee’s deposition before a decision on additional care would be made.  A week later, Employee’s attorney sent a third letter demanding immediate medical treatment for back pain and psychiatric symptoms. 

The deposition was taken on August 7, 2017, and, two weeks later, the Employer’s attorney sent a letter advising that the investigation had concluded and that no further treatment would be provided.  The Employer obtained a rating and began trying to settle the case.  At some point, the Employer learned the Employee was treating elsewhere, and it requested, “on numerous occasions,” that the Employer’s attorney provide the treatment records.  Those records were not produced until October 18, 2018, after lumbar surgery had been performed. 

The Employer obtained a follow up report from the treating doctor on August 20, 2020.  In that report, the doctor concluded that – based on imaging studies – the accident was not the prevailing factor in causing the medical condition.  His deposition was later taken, and, although he retracted some of the opinions in his August 20 report, he ultimately stood by his conclusion regarding causation.

The case was tried, and the Administrative Law Judge awarded certain benefits that were not in dispute in this appeal.  In addition, she ordered the Employer to pay past medical bills of $114,950.23, and awarded $59,381.36 in sanctions pursuant to Section 287.560 for an unreasonable defense.  Those two issues were reversed by the Labor and Industrial Relations Commission.  On the medical bills, the Commission found that the Employee’s failure to respond to the “numerous” letters from the Employer’s attorney requesting medical records and status was not enough to “sufficiently notify Employer” of the need for medical treatment.   Regarding the sanctions, the Commission did not believe the Employer’s conduct fit the “unreasonable and outrageous” standard for awarding costs and fees. 

Medical Bills

The Court reversed the Commission’s finding on the medical bills.  It noted that although the Employer generally has control over medical treatment, when “the Employer has notice that the Employee needs treatment, or a demand is made on the Employer to furnish medical treatment, and the Employer refuses or fails to provide the needed treatment,” the Employer loses control of medical and is responsible for any bills that are incurred.   The Court noted that both the ALJ and Commission agreed the treatment was reasonable and necessary, and once that was established, the only issues were whether a demand had been made, whether the demand was refused or ignored, and, as it pertained to this case, “whether Employee was required by law to update Employer on the court of the additional treatment.” 

The first two issues were basically admitted. The Court then analyzed several cases dealing with the latter issue, and concluded that once the demand had been made and refused (or ignored), there was no requirement that the Employee notify or otherwise inform Employer of the status of treatment:  “Once an Employee has made a demand and that demand has been refused, the claimant is free to choose their own medical provider and is no longer required by law to keep their Employer informed of their care.”   

The Court of Appeals ultimately reinstated the ALJ’s decision as to the Employer’s financial responsibility for the medical bills, and found the Employer should have been liable to the Employee for the “full cost of the treatment.”  It is unclear why the case was not remanded back to the LIRC to determine the mechanism of payment, especially given the Western District’s prior opinion in State ex Rel. Peters v. Fitzpatrick, a 2023 Western District case, and Helmig v. Springfield R-12 School District, a Southern District opinion from 2024. In Peters, which involves an insolvent Employer and the Second Injury Fund, the appellate court held that the Fund’s decision to pay the providers directly, thus limiting the amount paid directly to the claimant, (and therefore, to his attorney), was appropriate because “the language of the Award never explicitly ordered the Fund to pay Peters directly.”  The Western District acknowledged that the Award could have ordered the Fund to make payments directly to the Employee, tacitly admitting that the discretion to award medical benefits lies with the Commission. 

Helmig appears to be clearer.  There, the Southern District was faced with a somewhat similar situation as Erwin.  The claim was initially accepted as compensable, and medical treatment was provided.  The Employee was released from care, but continued to complain of pain and asked for additional care.  That was denied, so she sought treatment on her own using her health insurance.  Several years later, she was finally diagnosed with thoracic outlet syndrome, and had surgery.  The ALJ awarded the full cost of the medical bills to the Employee, and a 25% fee to her attorney.  The Commission modified that portion of the award, and ordered the Employer to resolve the bills with the provider directly.  It also reduced the attorney fee accordingly. 

The Court of Appeals reversed, but only because the Commission modified that portion of the Award “without giving Claimant or her attorney appropriate notice and an opportunity to be heard on these issues.”  It remanded the case back to the Commission.  After briefing and oral argument, the Commission – citing the Peters case and strict construction – affirmed its earlier opinion.  Specifically, the Commission concluded its earlier awarded allowing the Employer/insurer to pay the providers directly was “within our authority.”  Although that decision was appealed to the Southern District, the appeal was dismissed.

Notably, the Commission found in Helmig that the Employer’s action were “in good faith and consistent with its responsibility to provide treatment to cure and relieve the Employee’s injuries…”  For practitioners, this appears to be an issue that should be addressed at trial and certainly on appeal to the Commission.  If past medical bills are an issue, this Commission certainly believes it has the authority to determine how they are to be paid, and if an attorney fee should be awarded on those bills.

Penalties

The Commission’s decision on penalties was upheld.  First, the Court noted that “the commission should only exercise its discretion to order the cost of proceedings under section 287.560 where the issue is clear and the offense egregious.”  Second, the Court focused on its standard of review.  Because the Commission’s power to award sanctions is discretionary, the Court’s review was only to determine if the Commission abused its discretion when rendering its decision. 

Here, the ALJ awarded sanctions because the Employer refused to consult with its own doctor once the demand for treatment was made.  Further, she found it egregious that the Employer, at trial, denied the compensability of the case despite initially accepting it as compensable.  The Commission found those reasons lacking because 1) the Employee had been deemed to be at MMI, and that was a valid basis for denying treatment, 2) The Employer attempted to follow up on the claimant’s treatment status, but the Employee refused to cooperate, and 3) although the doctor’s sudden reversal was not credible, it was still a medical opinion that the Employer was entitled to rely on at trial.

The Court reviewed several cases where penalties were awarded, but distinguished them from this case.  It noted that prior instances where penalties were awarded involved situations where the Employer had no evidence to support a denial:  “In contrast [to those decisions], Employer presented some medical evidence supporting its defense.”  Although it found that the treating doctor’s opinions were “a moving target,” they were formal medical opinions from a licensed medical doctor and, therefore, the Employer was entitled to rely upon them.  As to the ALJ’s finding on medical care, the Court agreed that both parties acted unreasonably.  As such, the Commission did not abuse its discretion in denying sanctions.

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