PAULA KAY BRUNNER, Employee/Appellant, v. POST CONSUMER BRANDS and GALLAGHER BASSETT SERVS., INC., Employer-Insurer/Respondents, and ALLINA MED. CLINIC, NORTHFIELD HOSP. & CLINICS, and THE HARTFORD, Intervenors.

The employee appeals the compensation judge’s finding that an employee could not seek direct payment of medical expenses paid by a non-intervenor third party for stipulated reasonable and necessary medical treatment for a compensable work-related injury.  We reverse.

Paula Brunner, the employee, worked as a packaging operator for Post Consumer Brands, the employer.  Over the course of her employment, she developed a Gillette-type^[1] injury to her left shoulder culminating on January 11, 2022.  She underwent medical treatment and surgery, lost time from work, and received both short-term and long-term disability benefits.  Following an excellent surgical result, she returned to her pre-injury job on November 27, 2023.

After initially admitting that the employee’s shoulder condition was work related, the employer and its insurer denied the claim following receipt of a medical expert’s opinion that the employee’s shoulder condition was not related to an injury at work.  Thereafter, the employee’s health insurance provider, Anthem Blue Cross Blue Shield (Anthem), paid the medical bills for her shoulder condition.

The employee filed a claim petition seeking wage loss benefits and medical expenses, and also served potential intervenors with notices of their right to intervene, including Anthem. Anthem responded by letter, stating the employee’s health plan had paid $31,374.56 relative to the work-related injury and that the health plan contract contained an “exclusion that does not provide benefits for a condition when benefits are available under the Workers’ Compensation Act or similar laws.”^[2]  (Ex. R.)  Anthem further stated that, “we expect reimbursement … in the event of either a favorable decision at hearing or if settlement is reached through a compromise agreement.”  Id. Anthem did not file a motion to intervene.

The matter went to hearing on April 17, 2024, on the issues of compensability and whether Anthem’s interest should be extinguished for failing to timely file a motion to intervene, or in the alternative, whether the employee could bring a direct claim for medical bills paid by Anthem.  The parties stipulated that the medical treatment was reasonable and necessary.  The compensation judge found that the employee sustained a Gillette-type injury to her left shoulder culminating on January 11, 2022, and that she was entitled to benefits.  The judge also found that Anthem did not file a timely motion to intervene pursuant to Minn. Stat. § 176.361 and ordered that the employee could not bring a direct claim for the medical bills paid by Anthem.^[3]  The judge ordered Anthem’s interest to be extinguished, specifying that Anthem may not collect or attempt to collect the extinguished interest from the employee, employer, insurer, or any government program.^[4]  The employee appeals.

On appeal, the Workers’ Compensation Court of Appeals must determine whether “the findings of fact and order [are] clearly erroneous and unsupported by substantial evidence in view of the entire record as submitted.”  Minn. Stat. § 176.421, subd. 1(3).  Substantial evidence supports the findings if, in the context of the entire record, “they are supported by evidence that a reasonable mind might accept as adequate.”  Hengemuhle v. Long Prairie Jaycees, 358 N.W.2d 54, 59, 37 W.C.D. 235, 239 (Minn. 1984).  Where evidence conflicts or more than one inference may reasonably be drawn from the evidence, the findings are to be affirmed.  Id. at 60, 37 W.C.D. at 240. Similarly, findings of fact should not be disturbed, even though the reviewing court might disagree with them, “unless they are clearly erroneous in the sense that they are manifestly contrary to the weight of evidence or not reasonably supported by the evidence as a whole.”  Northern States Power Co. v. Lyon Food Prods., Inc., 304 Minn. 196, 201, 229 N.W.2d 521, 524 (1975).

A decision which rests upon the application of a statute or rule to essentially undisputed facts generally involves a question of law which the Workers’ Compensation Court of Appeals may consider de novo.  Krovchuk v. Koch Oil Refinery, 48 W.C.D. 607, 608 (W.C.C.A. 1993), summarily aff’d (Minn. June 3, 1993).

On appeal, the employee argues that the compensation judge erred in finding that no direct claim for medical benefits paid by Anthem could be brought.  The employee contends that the judge’s order purporting to extinguish the legal rights of Anthem is invalid and unenforceable.  In response, the employer and insurer assert that the compensation judge was correct to rely on Minn. Stat. § 176.361, subd. 2, which states, “where a motion to intervene is not timely filed, the potential intervenor interest shall be extinguished and the potential intervenor may not collect, or attempt to collect, the extinguished interest from the employee, employer, insurer, or any government program.”  They argue that the compensation judge’s decision should be affirmed because Anthem failed to timely intervene and therefore is not entitled to reimbursement of the paid medical expenses.  Id.  We are not persuaded by the employer and insurer’s argument.

When a third-party payor, such as a health insurer, pays for medical expenses related to a compensable work injury, the third-party payor is entitled to reimbursement by the employer and insurer.  Minn. Stat. § 176.191, subd. 3.  This section provides, “If a dispute exists as to whether an employee’s injury is compensable under [chapter 176] and the employee is otherwise covered by an insurer or entity pursuant to chapters 62A, 62C, 62D, 62E, 62R, and 62T, the insurer or entity shall pay any medical costs incurred by the employee for the injury up to the limits of the applicable coverage and shall make any disability payments otherwise payable by that insurer or entity in the absence of or in addition to workers’ compensation liability.”  Id.  Once compensability is determined, “the workers’ compensation insurer shall be ordered to reimburse the insurer or entity that made the payments for all payments made under this subdivision by the insurer or entity, including interest at a rate of 12 percent a year.”  Id.

Here, the judge determined compensability and found that the employee suffered a work-related Gillette-type injury culminating on January 11, 2022, that the employee was entitled to benefits and the parties had stipulated that the medical treatment was reasonable and necessary.  Under Minn. Stat. § 176.135, when an employer is liable for a work injury, the employer and insurer shall pay related reasonable and necessary medical expenses.

Despite this statutory provision, the employer and insurer argue that the third-party payor, Anthem, is not entitled to reimbursement by the employer and insurer because Anthem did not timely intervene.  They argue that the statute strictly prohibits these potential intervenors from payment, citing Minn. Stat. § 176.361, subd. 2.  We are mindful that underlying the employer and insurer’s argument is the expectation that they will be relieved of their obligation to pay medical expenses related to the work injury if the health insurer fails to timely intervene.

This court previously addressed the dissonance between Minn. Stat. §§ 176.361 and 176.191 in Polfliet v. Northern Lights Distrib., 71 W.C.D. 197 (W.C.C.A. 2011).  In Polfliet, the third-party health insurer, Blue Cross Blue Shield, failed to timely intervene under Minn. Stat. § 176.361, subd. 2(a).  The employer argued that their interest was properly extinguished.  We disagreed, noting that application of Minn. Stat. § 176.361 would absolve the employer of any liability for the injured worker’s reasonable and necessary medical treatment, and further noted the possibility that the third-party payor would bring a claim against the employee.  We outlined the purposes and intent of chapter 176 in general, and the purposes and intent of Minn. Stat. § 176.191 specifically, which override the essentially procedural provisions of Minn. Stat. § 176.361, subds. 2 and 7.  We concluded that the strict application of Minn. Stat. § 176.361 would offend a basic principle of the Workers’ Compensation Act, to place the burden of economic loss resulting from work injuries upon industry.  Although the third-party payor in Polfliet was assumed to be an ERISA plan, that fact is not dispositive.^[5]  The language of Minn. Stat. § 176.191 is unambiguous and that section was found to prevail over the intervention statute, Minn. Stat. § 176.361, where the two provisions conflict.^[6]  Polfliet, 71 W.C.D. at 213.

Similarly, in Reich v. F&S Constr., No. WC04-133 (W.C.C.A. Oct. 21, 2004), this court held that nothing in the language of Minn. Stat. § 176.361 impairs the employee’s right to seek direct payment of medical expenses.  In Reich, as here, the third-party payors did not intervene, the employee made a direct claim for payment of medical expenses related to the work injury, and the compensation judge denied payment for the payors’ failure to intervene.  This court reversed the compensation judge in Reich, and we reverse the compensation judge’s finding and order here. Moreover, the Minnesota Supreme Court held in Johnson v. Concrete Treatments, 7 N.W.3d 119 (Minn. 2024), that the employee “is entitled to assert a direct claim for medical expenses, regardless of the extinguishment of the Providers’ intervention interests under Minnesota Statutes section 176.361.”  Johnson, 7 N.W.3d at 128-29.

As a qualifying payor of benefits for a compensable injury pursuant to Minn. Stat. § 176.191, subd. 3, Anthem must be reimbursed by the employer and insurer.  We reverse Finding 44 and Orders 4 and 5.  We order the employer and insurer to reimburse Anthem for all payments made to cure and relieve the employee’s left shoulder condition arising out of the work injury culminating on January 11, 2022, including payment of interest at a rate of 12 percent a year.