Texas Exclusive Remedy Provision Does Not Apply to Health Care Providers

The exclusive remedy provision of Tex. Lab. Code Ann. § 408.001(a) does not apply to health care providers, held a Texas appellate court recently, in Hand & Wrist Center of Houston, P.A. v. Maintenance Supply Headquarters, 2014 Tex. App. LEXIS 1236 (Feb. 4, 2014). Reversing a decision that had granted summary judgment to a defendant employer that had been sued by a health care provider attempting to recover payment for medical care provided to an injured worker, the appellate court held that the exclusivity defense could only be raised in suits filed by an employee. 

The employee injured his hand while working for the defendant employer. An assistant operations manager took the employee to a clinic for medical treatment, but they were then directed to another clinic–Hand & Wrist. After they arrived at Hand & Wrist, the manager signed a guaranty form indicating the employer would be responsible for the charges. But after surgery was performed on the employee’s hand, the employer’s workers’ compensation carrier denied the claim due to the employee’s positive drug screen at the time of his treatment. Later, the Texas Department of Insurance Division of Workers’ Compensation determined that the injury was not compensable because of the employee’s intoxication and the workers’ compensation carrier was obsolved from any liability for the claim.

The bill still unpaid, Hand & Wrist sued the employer for breach of contract based on the guaranty form. The employer contended in relevant part that the “exclusive remedies” provision applied not only to injured employees, but to health care providers as well since the term “legal beneficiary” was also included within the wording of the statute. Indeed, Tex. Lab. Code Ann. § 408.001(a) provides that “[r]ecovery of workers’ compensation benefits is the exclusive remedy of an employee covered by workers’ compensation insurance coverage or a legal beneficiary against the employer or an agent or employee of the employer for the death of or a work-related injury sustained by the employee.”

The appellate court disagreed. Observing that § 401.012(a) of the Act defined “employee” as “each person in the service of another under a contract of hire, whether express or implied, or oral or written,” the court said the “plain language” of the provisions evidenced clear legislative intent that the recovery of workers’ compensation benefits was the exclusive remedy of an employee, but not for health care providers. The court also observed that a panel of the court had reached the same conclusion earlier this year [see Hand & Wrist Center of Houston, P.A. v. SGS Control Services, Inc., 409 S.W.3d 743 (Tex. Ct. App. 2013)], although in that case, the court indicated the medical care provider could be required to exhaust all administrative remedies before filing a civil action against the employer.