An ongoing hassle for injured workers and their attorneys is what to do when medical providers attempt to collect bills for services that are denied by the workers compensation insurer. Iowa has a statute preventing collection of unpaid medical bills during a pending worker’s compensation case. Nebraska does not. However, injured workers and their attorneys may ask for equitable relief by filing an injunction on collection of bills they claim are related to their workers compensation court. This article will show you the simple steps of how to make your case for equitable relief.

Jurisdiction

Most collections cases related to unpaid medical bills are filed in Nebraska County Courts. However, County Courts cannot grant injunctions because they do not have general equitable jurisdiction possessed by the District Courts (Iodence v. Potmesil, 239 Neb. 387, 476 N.W.2d 554 (1991). But the District Court and County Court have concurrent original jurisdiction in civil matters under $45,000 (Neb. Rev. Stat. §24-517). The County Court is supposed to transfer a case to the District Court when the relief requested is exclusively within the jurisdiction of the District Court (Neb. Rev. Stat. §25-2706).

In my view, not granting a motion to transfer would be an abuse of discretion by the County Court. “No person shall be deprived of life, liberty, or property, without due process of law, nor be denied equal protection of the laws.” (Neb. Rev. Stat. CONST. Art. I, § 3: See also U.S.C.A. Amd. V.)

The essence of procedural due process is simply that fundamental fairness that people have the right to expect – even demand – and receive through our system of law. (Appeal of Levos, 214 Neb. 507, 515, 335 N.W.2d 262, 267 (1983) If equitable relief is available to the defendant in a collections case, it is unconstitutional to deny the right to ask for equitable relief by denying a motion to transfer to District Court. Essentially, the court would be asking the defendant to fight the collections case with one hand behind their back.

Building your equitable case

I think the following facts would lead to a District Court granting an injunction in a collections case related to a worker’s compensation injury.

1. Strong evidence of the unpaid bills being reasonable and necessary because of the work injury. This evidence would come in the form of a causation opinion and an order for treatment from a doctor. Evidence of medical causation allows you to argue that the medical provider has a reasonable expectation of payment.
2. Evidence of payments by private health insurance. This is important because it shows that the medical provider has been paid something for their services.
3. If the worker has no private insurance, present evidence that your worker is willing and able to make installment payments. Even better would be evidence from other medical providers showing they were willing to accept small installment payments.

Another argument to make in an equitable case is to bring up the fact that if your client was on Medicaid and the provider accepted Medicaid, the provider would be paid pennies on the dollar and would be forced to write off the balance. How fair would it be for someone who paid 60 cents on the dollar through their private insurance for services to face a judgment while the person who paid 20 cents on the dollar through Medicaid had their balance written off?

Interaction between Law and Equity

Many workers compensation lawyers in Nebraska defend collections suits by arguing that Neb. Rev. Stat. §48-120 precludes collections for workers compensation bills as a matter of law. I’ve made that argument, but judges seem to agree with collections attorneys when they argue that 48-120 doesn’t apply because if a claim is denied there is probably a factual reason. I’m not going to get into a detailed analysis of the merits of this argument. I think the best approach to defend collections claims stemming from workers compensation accidents claims is to file a legal motion to dismiss paired with a motion to transfer to District Court to ask for equitable relief if the motion to dismiss as a matter of law is overruled.