Ohio Supreme Court Denies Self-Insured Employer Reimbursement of Underpaid PTD Compensation from Overpayment of DWRF Benefits

Manor Care, a self-insured employer, paid and continues to pay permanent total disability (“PTD”) compensation to two claimants, beginning in the mid-1990s.  The claimants also received Disabled Worker Relief Fund (“DWRF”) benefits, which is a benefit designed to supplement the monthly income of PTD recipients, whose combined PTD benefits and social security disability compensation fall below the minimum set forth in R.C. 4123.413.  The Bureau of Workers’ Compensation pays DWRF benefits from earmarked funds from the state fund.  While state fund and self-insured employers contribute to the DWRF fund in different ways, the Bureau makes DWRF payments irrespective of an employer’s self-insured or state-fund status.  In this case, the two claimants received PTD benefits from Manor Care and DWRF benefits from the Bureau.

Pursuant to a 2014 audit, the Bureau determined Manor Care had been underpaying the claimants based on an incorrect rate.  Consequently, the Bureau had overpaid the DWRF benefits.  In 2015, the Bureau demanded that Manor Care make lump sum payments to the claimants as restitution for the underpaid PTD benefits.  Manor Care made the lump sum payments under protest, arguing its reimbursement to the Bureau for overpaid DWRF benefits should offset its underpayment of PTD benefits.  Manor Care then moved the Commission to vacate the DWRF overpayment orders and order the Bureau to reimburse manor Care for the lump sum PTD compensation payments.  The Commission  vacated the orders, but, declined to order reimbursement from the Bureau.  Manor Care requested reimbursement from the Bureau directly, which the Bureau ultimately rejected after a hearing before the Self-Insured Review Panel.  Thereafter, Manor Care filed a petition for a writ mandamus in the 10th District Court of Appeals to order the Bureau to reimburse Manor Care.

The court of appeals denied the writ, finding Manor Care had no right to reimbursement.  Manor Care appealed to the Ohio Supreme Court, which affirmed the court of appeals’ decision.  The Court reasoned there  is no provision in the workers’ compensation law providing for payments to employers from the DWRF fund.  Manor Care also argued the Bureau should have made an “equitable adjustment” because of its accounting error. However, the Court rejected this argument also on the ground that PTD compensation and DWRF benefits are “separate and distinct statutory creatures serving different purposes.”  Ultimately, because there is no statutory authority requiring the Bureau to construe overpaid DWRF benefits as PTD compensation, there was no basis to order the Bureau to provide the relief requested by Manor Care.

While the Supreme Court denied Manor Care’s appeal in State ex rel. Manor Care, Inc. v. Bur. of Workers’ Comp., Slip Opinion No. 2020-Ohio-5373, the Court wrote that Manor Care was not completely without a remedy.  The Court sympathized with Manor Care’s plight and suggested Manor Care may seek equitable relief in another court.



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