Eastern District of Louisiana Finds Jones Act Employer Does Not Receive Benefit of Write Downs Negotiated by Third-Party Financier with Plaintiff’s Medical Providers

In Howard v. Offshore Liftboats, LLC, C/A 13-4811, 2016 WL 232252 (E.D. La. Jan. 1, 2016), plaintiff filed suit against Offshore Liftboats (OLB) claiming injuries arising from a failed personnel basket transfer and demanding payment of maintenance and cure. A dispute arose between OLB and the plaintiff as to the cost of the medical care being provided to the Plaintiff and cross-motions for summary judgment were filed on the issue. By the time of the decision on the motions, all of the disputed medical costs had been resolved except for a $56,561.72 bill owed to Diagnostic Management Affiliates (DMA). DMA is a third-party medical financier often used by the plaintiff’s bar to secure medical treatment for their clients. DMA operates by negotiating discounted rates with medical providers. In exchange for arranging and paying for the plaintiff’s medical care, DMA will charge the plaintiff for the full retail value of the medical care once the case has been successfully tried or settled.

A Jones Act employer’s maintenance and cure obligation encompasses the duty to reimburse medical expenses actually incurred by the Plaintiff. OLB argued that the amount actually incurred by the Plaintiff was the discounted rate DMA paid for the treatment, $24,443.20, as opposed to the $56,561.72 being charge by DMA to the Plaintiff. Judge Susie Morgan disagreed, holding that the $56,561.72 being charged to Plaintiff by DMA is the amount Plaintiff actually incurred because that is the amount the Plaintiff was ultimately obligated to pay.

The Howard decision highlights the value of coordinating a Jones Act seaman’s medical care through an experienced local claims adjuster wherever possible. If the seaman and his employer are able to agree on coordination and payment of medical care through a claims adjuster for the employer, the defense will be in a better position to negotiate and control the cost of care with medical providers before charges are incurred. Though bargaining power of an employer over a medical provider furnishing care pursuant to a cure obligation is limited, it is certainly better than the alternative of the Plaintiff contracting with third-party financiers who may ultimately charge back to the employer double the actual price paid for medical treatment.

Author: Tripp DuBose