Attorneys for Injured Workers Can Get 20% of Medical Bills

The standard fee agreement in Pennsylvania workers’ compensation is 20% of the benefits obtained or awarded to an injured worker.  PA Courts have found this amount to be reasonable, and it remains the standard charged.  Historically, this pertained just to wage loss, or what we call “indemnity” benefits.

This was somewhat changed by a 2020 decision by the Commonwealth Court of Pennsylvania in the case of Neves v. Workers’ Compensation Appeal Board (American Airlines).  Here, the Court found that an attorney for the injured worker could obtain 20% of the medical bills, as well as 20% of the wage loss benefits.  While some attorneys immediately started using this ability, others, our firm among them, hesitated to do so.  We were unsure how that 20% fee would be dealt with by the healthcare provider.  More specifically, we were concerned that our client could potentially be liable for the 20% we would be taking as a fee.  This, of course, was a risk we would never place on our clients.

However, the Commonwealth Court of Pennsylvania has now clarified that risk in the recent case of Williams v. City of Philadelphia (Workers’ Compensation Appeal Board).  In that case, the Workers’ Compensation Judge (WCJ) refused to grant a 20% fee on the medical benefits, despite it being requested by the attorney and agreed upon by the injured worker.  While the Workers’ Compensation Appeal Board (WCAB) affirmed, the Commonwealth Court reversed, finding that the 20% fee on the medical benefits should have been granted.

In the underlying litigation, the WCJ refused to allow the fee, because the medical treatment was ongoing (meaning bills continued to accrue), so the injured worker could not knowingly agree to the risk that was being taken.  The WCAB agreed with that analysis.

This was disagreed upon by the Commonwealth Court of PA.  First, the Court noted that medical treatment is almost always ongoing, so this reasoning would preclude a fee on the medical benefits in nearly all cases.  Second, and more importantly, the Court held that a healthcare provider cannot bill an injured worker for the 20% deducted as a fee.  Therefore, the WCJ and the WCAB were considering a risk to the injured worker which did not exist.

Specifically, in interpreting the Section of the PA Workers’ Compensation Act which prohibits a healthcare provider from billing the patient (the injured worker) for treatment related to a work injury, the Court found:

“Thus, Section 306(f.1)(7)’s prohibition on “balance billing” is not limited to only the difference between a provider’s normal fee and the Medicareapproved reimbursement rate. Rather, it prohibits a provider from billing a claimant for any costs related to care provided under the Act and any amounts reflecting the difference between the provider’s charge and the amount paid.”  [Emphasis in original]

Given this clarification by the Court, we can now seek payment for medical bills without causing any risk to our clients.  This will be very helpful for injured workers who have little wage loss (either due to low wages or a short time out of work), as they will now be able to obtain legal representation.  In the past, this marginalized group of injured workers had great difficulty finding attorneys willing to pursue those cases.