Most recently, two new decisions have been announced that impact the recovery of overpayments for respondents in  Colorado Workers' Compensation.  This article is a brief summary of  these two recent decisions that serve as reminders of additional tools to reduce indemnity liability and seek repayment of any overpaid funds from claimants. 

Reopening to Recover an Overpayment. 

C.R.S. Section 8-43-303(2)(a) provides within two-years after the date the last temporary or permanent disability benefits become due or payable, the director or administrative law judge ("ALJ") may review and reopen an award on the ground of fraud, overpayment, error, mistake, or change in condition.  This statute along with recent case law interpreting it, provides a reminder of the mechanism of reopening a claim in order to recover an overpayment after favorable pre-existing medical history on a claimant is discovered or when respondents mistakenly calculate a benefit award. 

Krauth v. Great West Life and Annuity

In the context of learning about favorable pre-existing medical history on a claimant, the Industrial Claim Appeals Office recently upheld an ALJ's reopening of the claim to award an overpayment to respondents.  Here, prior to closing the claim, the Division IME awarded seven percent whole person impairment for a 2007 low back injury.  Respondents filed a Final Admission of Liability admitting to the seven percent whole person impairment.  After the claim closed, respondents learned that claimant received a seven percent whole person rating for a low back injury occurring in 2000.  Respondents filed a petition to reopen  based on fraud and mistake, and proceeded to hearing arguing (1) the Division IME's opinion as to impairment was incorrect and (2) an entitlement to an overpayment for the payment of the seven percent whole person impairment.  The ALJ denied respondents' reopening attempt on the basis of fraud, but granted the reopening on the basis of mistake and ordered claimant to repay respondents $20,152.72 for overpaid permanent partial disability benefits.

Claimant appealed, arguing in part, that the ALJ erred in reopening the claim because respondents did not prove a statutory mistake that supports reopening.  ICAO disagreed and noted that a mistake under the reopening includes mistakes of law and fact.  ICAO further found that substantial evidence in the record existed to support the ALJ's order and his findings that the claimant was not honest in the disclosure of the prior low back injury that was subject to the mistake of fact.  Consequently, ICAO affirmed the reopening and the ALJ's ordering of claimant to repay respondents the $20,152.72.    

Simpson v. Indus. Claim Appeals Office

In this case, the employer discovered that it had overpaid claimant for temporary total disability and permanent partial disability benefits.  When claimant applied for and received a lump sum award for permanent total disability benefits, the employer credited the lump sum amount against the overpayment.  Claimant objected and pursued a hearing arguing that the permanent total disability rate was wrongfully calculated and alleged penalties.  The ALJ determined and ICAO affirmed the decision that the employer was entitled to the overpayment.  The Colorado Court of Appeals similarly affirmed the ordering of the overpayment based on the application of C.R.S. Section 8-43-303(2)(a).  

Summary

Both of these recent cases from ICAO and the Court of Appeals seem to suggest that the courts are permitting respondents to reopen claims to recover overpayments and specifically have the claimant ordered to repay overpaid monies that either resulted from mistakes from the non-disclosure of prior medical histories or improper calculations.  As such, these cases serve as a reminder of this available mechanism.

It should be further noted that the Colorado Workers' Compensation Act now mandates that any attempts to collect overpayments must be asserted by respondents within one-year after the time respondents knew of the existence of the overpayment. (C.R.S. 8-42-113.5 (1)(b.5)).  Therefore, if respondents wish to pursue a reopening for purposes of recovering an overpayment, such filing must be made one-year after the time respondents knew of the existence of the overpayment.