Municipality of Anchorage v. Adamson

Notice: This opinion is subject to correction before publication in the P ACIFIC R EPORTER .
Readers are requested to bring errors to the attention of the Clerk of the Appellate Courts, 303
K Street, Anchorage, Alaska 99501, phone (907) 264-0608, fax (907) 264-0878, email
corrections@appellate.courts.state.ak.us.
THE SUPREME COURT OF THE STATE OF ALASKA
MUNICIPALITY OF ANCHORAGE )
and NOVAPRO RISK SOLUTIONS, ) Supreme Court Nos. S-14621/14622
Adjuster, ) (Consolidated)
)
Petitioners, ) Alaska Workers’ Compensation
) Appeals Commission No. 11-017
v. )
) OPINION
JOHN E. ADAMSON, )
) No. 6780 - May 3, 2013
Respondent. )
)
)
CALLI E. OLSEN, )
) Alaska Workers’ Compensation
Petitioner, ) Appeals Commission No. 12-001
)
v. )
)
CITY & BOROUGH OF )
JUNEAU, )
)
Respondent. )
)
Petition for Review in File No. S-14621 from the Alaska
Workers’ Compensation Appeals Commission, Rebecca C.
Pauli, Chair pro tem. Petition for Review in File No. S-14622
from the Alaska Workers’ Compensation Appeals
Commission, Laurence Keyes, Chair.
Appearances: Trena L. Heikes, Assistant Municipal
Attorney, and Denise A. Wheeler, Municipal Attorney,
Anchorage, for Petitioners Municipality of Anchorage and
NovaPro Risk Solutions. Eric Croft, The Croft Law Office,
Anchorage, for Respondent Adamson. Joseph A.
Kalamarides, Kalamarides & Lambert, Anchorage, for
Petitioner Olsen. Richard L. Wagg, Russell, Wagg, Gabbert
& Budzinski, P.C., Anchorage, for Respondent City and
Borough of Juneau.
Before: Fabe, Chief Justice, Carpeneti, Winfree, and
Stowers, Justices. [Maassen, Justice, not participating.]
CARPENETI, Justice.
I. INTRODUCTION
What standard should apply to stays on appeal of future medical benefits
when the Alaska Workers’ Compensation Board has ordered an employer to pay for
medical treatment or benefits? In these two cases the Alaska Workers’ Compensation
Appeals Commission applied different standards to evaluate motions to stay future
medical benefits, and the losing party in each case petitioned for review of the
Commission’s stay decision. We granted review to decide what standard applies to stays
of future medical benefits. We hold that to stay future medical benefits, the employer
must show the existence of the probability that the appeal will be decided adversely to
the compensation recipient.
II. FACTS AND PROCEEDINGS
A. Municipality of Anchorage v. Adamson
John Adamson worked as a firefighter for the Municipality of Anchorage
for more than 20 years, retiring in 2011. He was diagnosed with prostate cancer on
August 7, 2008, and applied for workers’ compensation benefits for the cancer.
Adamson’s application was based on AS 23.30.121, which establishes a special
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presumption analysis in workers’ compensation cases for firefighters who develop certain
cancers; the statute became effective on August 19, 2008. The Municipality raised a
number of procedural defenses to Adamson’s claim as well as a constitutional challenge
to the firefighter presumption statute.
After a hearing the Alaska Workers’ Compensation Board decided that
Adamson’s cancer was compensable and ordered the Municipality to pay past and future
medical benefits, some past temporary total disability (TTD) benefits, and costs and
attorney’s fees. The Board did not consider whether Adamson was eligible for
permanent partial impairment (PPI) at that time because Adamson had neither been
evaluated nor included a claim for it.1 One Board member dissented and would have
found the claim not compensable.
The Municipality appealed the decision to the Alaska Workers’
Compensation Appeals Commission and asked for a stay of the Board’s decision. The
Municipality explained that “future periodic medical expenses [might] be incurred” while
the appeal was pending, and argued that these benefits should be stayed under the
probability of success on the merits standard. Adamson agreed to stay past benefits, but
he did not want to stay future medical benefits, including a biannual examination. He
argued that he, not the Municipality, would likely prevail on the merits.
The Commission refused to stay future benefits. It found that the
Municipality would suffer “irreparable harm” because it would have no way to recoup
benefits paid if it prevailed on appeal. And the Commission further decided that the
Municipality had raised serious and substantial questions going to the merits of the case.
But the Commission refused to stay future benefits because the Municipality had not
1
At oral argument before us, the Municipality said that Adamson has since
received an award of PPI. The Municipality did not say whether it had appealed this
decision or asked the Commission for a stay of PPI awarded by the Board.
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shown that “it [was] more likely than not that the [Municipality would] prevail on the
merits.” The Commission cited AS 23.30.125(c) as the source of law for the stay
standard. The Municipality petitioned for review of the denial of the stay.
B. Olsen v. City & Borough of Juneau
Calli Olsen worked as a wastewater utility operator for the City and
Borough of Juneau (CBJ). According to the Board’s decision in her case, she filed
reports of injury for two different injuries, one to her right knee in May 2009 and one to
her lower back and right leg in September 2009. After a hearing the Board found that her
knee injury, but not her back and leg injury, was compensable, and it ordered CBJ to pay
for completion of a specific medical treatment (autologous chondrocyte implantation) as
well as past medical care related to the right knee.2 The Board denied other claims she
made and deferred ruling on PPI because she was not yet medically stable.
CBJ appealed to the Commission and asked for a stay of future medical
benefits. CBJ’s motion for stay argued that it was probable that the merits of the appeal
would be decided adversely to Olsen. CBJ contended that because Olsen’s claim was an
aggravation claim and because the statutory standard had changed from “a substantial
factor” to “the substantial cause,” the Board had evaluated the claim using the incorrect
standard. Olsen countered that the Board had properly evaluated the claim. In an
affidavit filed with her opposition, Olsen stated that she had undergone the first part of
2
Autologous chondrocyte implantation is a two-part medical procedure in
which a small amount of cartilage is first removed from the knee in an arthroscopic
procedure. The tissue is sent to a lab, which grows more of the patient’s cells. The lab
initially freezes the tissue and does not begin the culturing process until after “all the
paperwork for insurance has been done.” After growing a sufficient number of cells, the
lab ships them back for implantation in the patient. The second surgery is an open
procedure in which the cells are placed under a membrane patch. According to Olsen’s
surgeon, the procedure is generally successful and avoids the need for knee replacement
surgery. Olsen had completed the first part of the procedure before the Board hearing.
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the implantation procedure in June 2010 and had no funds to pay for the second surgery;
she further stated that she was “not able to find suitable work in [her] field due to [her]
injury.”3
At the hearing on the stay, the Commission directed the parties to address
which regulatory standard for a stay applied. At the time of the hearing, the
Commission’s regulation about stays on appeal contained two standards depending on
the type of benefit at issue. To stay “continuing future periodic compensation payments”
the appellant was required to demonstrate irreparable damage and “the existence of the
probability that the merits of the appeal [would] be decided adversely to the
compensation recipient”; for “lump-sum payments” the appellant had to show irreparable
damage and “the existence of serious and substantial questions going to the merits of the
case.”4
CBJ said it would suffer irreparable damage without the stay because it
would have no way to recoup the payments if it were to win on appeal. CBJ argued that
the benefits at issue were not continuing future periodic compensation payments, so the
serious and substantial question standard should apply. Olsen argued that CBJ was
required to show a probability of success on the merits; she told the Commission that no
case had expressly decided whether future medical benefits were “continuing future
periodic compensation payments.”
The Commission granted the stay, using the serious and substantial question
test to evaluate the request. The Commission found that CBJ had no way of recovering
payment for the medical treatment if CBJ won the appeal, and it decided that CBJ had
3
Olsen was still working for CBJ at the time of the first surgery, but the
workers’ compensation carrier did not pay for it. Her employment with CBJ ended in
July 2010.
4
8 Alaska Administrative Code (AAC) 57.100(d)-(e) (am. 3/24/12).
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raised a serious and substantial question, specifically how “the statutory standard for
compensability . . . requiring that employment be the substantial cause of the need for
medical treatment . . . appl[ied] in the context of [Olsen’s] case.” The Commission did
not consider whether CBJ had shown the existence of the probability the merits of the
appeal would be decided adversely to Olsen.
Olsen then moved for reconsideration, arguing that the probability of
success on the merits was the appropriate standard. She further contended that medical
benefits could not be stayed at all if the Commission interpreted “compensation” as
excluding medical benefits. The Commission responded to Olsen’s motion by explaining
that it interpreted AS 23.30.125(c) as “restating the criterion in Olsen [Logging Co. v.
Lawson5] for stays of ongoing periodic disability payments on which an employee relies
as a salary substitute.” The Commission also quoted the standard for lump sum
payments from Olsen Logging and said that whether Olsen’s implantation procedure
would be paid incrementally or [as] a lump sum was not the
critical consideration . . . . The compensation is clearly not
ongoing periodic disability payments on which Olsen would
rely as a salary substitute. . . . [T]he compensation, in terms
of the language in AS 23.30.125(c), is not continuing future
periodic compensation payments.
Olsen petitioned for review of the stay decision.
We granted review of both petitions and consolidated the cases for oral
argument and decision.
III. STANDARD OF REVIEW
We interpret statutes “according to reason, practicality, and common sense,
considering the meaning of the statute’s language, its legislative history, and its
5
832 P.2d 174 (Alaska 1992).
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purpose.”6 When interpreting a statute, “we adopt ‘the rule of law that is most persuasive
in light of precedent, reason, and policy.’ ”7 We apply our independent judgment to
questions of law that do not involve agency expertise.8 If the issue involves agency
expertise or fundamental policy questions, we apply the reasonable basis standard of
review and “defer to the agency if its interpretation is reasonable.”9 But when the issue
is one of “statutory interpretation requiring the application and analysis of various canons
of statutory construction,” as it is here, we apply our independent judgment.10
IV. DISCUSSION
Future Periodic Compensation Payments Can Include Medical Benefits.
A. The Language Of AS 23.30.125(c)
These two petitions require us to construe AS 23.30.125(c), which the
legislature repealed and reenacted in 2005 as part of the legislation creating the
6
Parson v. State, Dep’t of Revenue, Alaska Hous. Fin. Corp., 189 P.3d 1032,
1036 (Alaska 2008) (citing Grimm v. Wagoner, 77 P.3d 423, 427 (Alaska 2003)).
7
Lewis-Walunga v. Municipality of Anchorage, 249 P.3d 1063, 1067 (Alaska
2011) (quoting L.D.G., Inc. v. Brown, 211 P.3d 1110, 1133 (Alaska 2009)).
8
Marathon Oil Co. v. State, Dep’t of Natural Res., 254 P.3d 1078, 1082
(Alaska 2011) (quoting Matanuska-Susitna Borough v. Hammond, 726 P.2d 166, 175
(Alaska 1986)).
9
DeNuptiis v. Unocal Corp., 63 P.3d 272, 277 (Alaska 2003) (citing
O’Callaghan v. Rue, 996 P.2d 88, 94 (Alaska 2000); Lakosh v. Alaska Dep’t of Envtl.
Conservation, 49 P.3d 1111 (Alaska 2002)).
10
Tesoro Alaska Petroleum Co. v. Kenai Pipe Line Co., 746 P.2d 896, 903-04
(Alaska 1987); see also Alaska Pub. Offices Comm’n v. Stevens, 205 P.3d 321, 324
(Alaska 2009) (“When reviewing an agency decision involving statutory interpretation
and determination of legislative intent, we apply the substitution of judgment standard.”).
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Commission.11 The statute currently provides, in pertinent part:
The payment of the amounts required by an award may not be
stayed pending a final decision in the proceeding unless, upon
application for a stay, the commission, on hearing, after not
less than three days’ notice to the parties in interest, allows
the stay of payment, in whole or in part, where the party filing
the application would otherwise suffer irreparable damage.
Continuing future periodic compensation payments may not
be stayed without a showing by the appellant of irreparable
damage and the existence of the probability of the merits of
the appeal being decided adversely to the recipient of the
compensation payments. The order of the commission
allowing a stay must contain a specific finding, based upon
evidence submitted to the commission and identified by
reference to the evidence, that irreparable damage would
result to the party applying for a stay and specifying the
nature of the damage.
Among the changes the legislature made to AS 23.30.125(c) in 2005 was
the addition of the second sentence in the text quoted above: “Continuing future periodic
compensation payments may not be stayed without a showing by the appellant of
irreparable damage and the existence of the probability of the merits of the appeal being
decided adversely to the recipient of the compensation payments.”12 This sentence is
11
Ch. 10, § 40, FSSLA 2005.
12
Former AS 23.30.125(c) (1990) provided:
The payment of the amounts required by an award may not be
stayed pending final decision in the proceeding unless upon
application for an interlocutory injunction the court on
hearing, after not less than three days’ notice to the parties in
interest and the board, allows the stay of payment, in whole
on in part, where irreparable damage would otherwise ensue
to the employer. The order of the court allowing a stay shall
contain a specific finding, based upon evidence submitted to
(continued...)
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similar, but not identical, to language in Olsen Logging Co. v. Lawson, where we
interpreted former AS 23.30.125(c) as incorporating the balance of hardships standard
used in preliminary injunctions.13 In Olsen Logging we looked at the balance of
hardships to employers and employees in stays of disability benefits and decided that the
balance of hardships “would almost invariably result in application of the ‘probability
of success on the merits’ standard when the award consists of ongoing periodic disability
payments on which an employee relies as a salary substitute.”14 In contrast, we decided
that “the lesser ‘serious and substantial questions’ standard [should] be used where a
lump sum award is sought to be stayed” because an employer will often have limited or
nonexistent means to recover the money paid if it wins the appeal and the employee is
“usually not dependent on lump sum awards for his daily living expenses.”15 Our
decision in Olsen Logging established a two-tier system for evaluating stays of disability
benefits in workers’ compensation cases, but it did not consider medical benefits. Before
the legislature amended AS 23.30.125, we had not been presented with the question of
which standard applied to stays of awards of future medical benefits.
12
(...continued)
the court and identified by reference to it, that irreparable
damage would result to the employer, and specifying the
nature of the damage.
13
832 P.2d 174, 175-76 (Alaska 1992).
14
Id. at 176.
15 Id.
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B. The Commission’s Interpretation Of AS 23.30.125(c)
In the time since AS 23.30.125(c) was amended, the Commission has
interpreted the statute in a number of ways.16 For purposes of evaluating stays of future
medical benefits, the Commission has at times engaged in a detailed weighing of the
balance of hardships to the parties, looking at a number of factors before deciding the
issue.17 In Adamson’s case, there was apparently no dispute before the Commission that
the probability of success on the merits was the applicable standard. In Olsen’s case, the
Commission interpreted the legislature’s addition of the sentence about continuing future
periodic compensation payments as signaling a legislative intent to apply the probability
of success on the merits only to ongoing disability payments that the employee used as
a salary substitute. In arriving at this decision, the Commission did not examine the
meaning of the words contained in the phrase “continuing future periodic compensation
payments” and did not discuss the legislative history or purpose of the statute. Instead,
it interpreted the phrase “as restating the criterion in Olsen [Logging] for stays of ongoing
periodic disability payments on which an employee relies as a salary substitute.”
Because the Commission did not consider medical benefits to be “ongoing periodic
disability payments on which Olsen would rely as a salary substitute,” it decided that the
medical benefits, “in terms of the language in AS 23.30.125(c), [were] not continuing
future periodic compensation payments.”
16
In addition to the decisions it has made about stays, it has promulgated a
regulation about stays, which it has modified several times. The most recent change in
the regulation became effective in March 2012, after these cases were decided. 8 AAC
57.100, am. 3/24/12, Register 201.
17
See Anchorage Sch. Dist. v. Delkettie, AWCAC Dec. No. 022 at 9 (Oct. 19,
2006) (refusing to stay payment of future medication copayments because employer
could recover money); S&W Radiator Shop v. Flynn, AWCAC Decision No. 005 at 5
(Feb. 24, 2006) (evaluating balance of hardships using factors including delay in
treatment and ability of employer to recover payment).
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C. “Continuing Future Periodic Compensation Payments”
Central to resolution of these cases, then, is the meaning of the phrase
“continuing future periodic compensation payments.”18 “We interpret statutes according
to reason, practicality, and common sense, considering the meaning of the statute’s
language, its legislative history, and its purpose.”19 Words in statutes are construed using
their common meanings unless they have “acquired a peculiar meaning, by virtue of
statutory definition or judicial construction.”20
Of the words in the phrase “continuing future periodic compensation
payments,” only “compensation” is defined in the workers’ compensation act.21 We have
also interpreted the term “compensation” to include medical benefits in most instances;
as we stated in Childs v. Copper Valley Electric Ass’n, we “generally construe
‘compensation’ to include medical benefits, [but] we occasionally will reach the opposite
result if statutory language strongly suggests a narrower reading.”22 The Commission
acknowledged that medical benefits are compensation when it said that the Board
“awarded Olsen compensation in the form of future medical benefits.” No party disputes
that the medical benefits awarded in these cases are “compensation” for purposes of a
18
The parties raised and discussed the additional issue of whether the
legislature intended to alter the two-tier analysis in Olsen Logging, particularly the
standard for stays of lump-sum awards, through the addition of the sentence about stays
of continuing future periodic compensation payments. Because Olsen Logging did not
address medical benefits, we do not need to decide this issue.
19
Pestrikoff v. Hoff, 278 P.3d 281, 283 (Alaska 2012) (citing In re Estate of
Maldonado, 117 P.3d 720, 725 (Alaska 2005)).
20
State v. Jeffery, 170 P.3d 226, 232 (Alaska 2007) (quoting Div. of Elections
v. Johnstone, 669 P.2d 537, 539 (Alaska 1983)) (internal quotation marks omitted).
21
AS 23.30.395(12).
22
860 P.2d 1184, 1192 (Alaska 1993) (citations omitted).
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stay, and nothing in the statutory language suggests that the legislature intended to treat
medical benefits differently from other compensation in this statutory subsection.23
Subsection .125(c) permits the Commission to set aside a “compensation order,” which
is a Board order deciding a workers’ compensation claim.24 Because a claim can include
a request for medical benefits, a compensation order can also include medical benefits,
as these two cases illustrate. As a result “compensation” in “continuing future periodic
compensation payments” includes medical benefits.25
The parties here dispute the meaning of “continuing” and “periodic.” The
Municipality argues that medical benefits do not fit the definition of “continuing.”
Adamson responds that payments for his examinations are unquestionably continuing.
The Municipality’s argument that medical benefits are not continuing is based on the idea
that each separate doctor visit or procedure is a discrete event that renews the employer’s
obligation; it does not consider a course of medical treatment that may extend over a long
period of time and encompass a number of visits.
“Continue” has several meanings:
1. To go on with a particular action or in a particular
condition: PERSIST . 2. To exist over an extended period:
23
The legislature used the phrase “continuing future periodic compensation
payments” rather than “ongoing periodic disability payments,” as we did in Olsen
Logging Co. v. Lawson, 832 P.2d 174, 176 (Alaska 1992).
24
AS 23.30.110(e).
25
See Jonathan v. Doyon Drilling, Inc., 890 P.2d 1121, 1123 (Alaska 1995)
(“There is a presumption that the same words used twice in the same act have the same
meaning.” (quoting Kulawik v. ERA Jet Alaska, 820 P.2d 627, 634 (Alaska 1991))
(internal quotation marks omitted)).
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LAST .3. To remain in the same state, capacity, or place. 4.
To go on after an interruption: RESUME .[26]
Black’s Law Dictionary has two definitions of “continuing,” both of which are similar
to general usage: “1. Uninterrupted; persisting . 2. Not requiring
renewal; enduring .”27 The medical
benefits at issue in both of these cases fall within a definition of “continuing.” The
treatment the Board ordered for Olsen would have completed (or gone on with) the first
procedure. Adamson’s medical care will persist over an extended period of time.
Medical benefits generally meet the definition of “continuing”: An employer may be
required to provide medical benefits over an extended period of time to ensure that the
worker completes the process of recovery.28
We turn now to the meaning of “periodic payment.” The Municipality
contends that the definition of the term “periodic payment” shows that medical benefits
are not “periodic compensation payments.” “Periodic payment” is defined as “[o]ne of
a series of payments made over time instead of a one-time payment for the full amount”;
it is contrasted with “lump-sum payment,” which is defined as “[a] payment of a large
amount all at once, as opposed to a series of smaller payments over time.” 29 The
Municipality asserts that “medical benefits are paid as a ‘one time payment for the full
amount’ due and are incurred on an intermittent, irregular basis.” But this depends on
how one views medical benefits. Each doctor visit or procedure may be paid in full when
the bill is presented, but an employer is responsible, at least initially, for the full course
26
W EBSTER ’S II NEW COLLEGE DICTIONARY 250 (3d ed. 2005).
27
BLACK ’S LAW DICTIONARY 363-64 (9th ed. 2009).
28
See AS 23.30.095(a) (requiring employer to provide medical treatment for
up to two years depending on nature of injury).
29
BLACK ’S LAW DICTIONARY 1244 (9th ed. 2009).
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of medical treatment the worker needs to recover from injury.30 Payment for the course
of treatment is not usually made as a lump sum, particularly when a worker must see
specialists on referral to receive appropriate treatment.
The parties here focus their arguments on the meaning of “periodic.” CBJ
and the Municipality rely on a definition of “periodic” that is limited to regular intervals.
Adamson counters that “periodic” can also mean “recurring intermittently.” “Periodic”
has several dictionary meanings, two of which are relevant here: “Occurring or appearing
at regular intervals” and “[t]aking place now and then: INTERMITTENT .”31 Because either meaning is plausible, we conclude that the statute is
ambiguous.
D. Legislative Purpose And History
When statutory language is ambiguous, we look to the purpose of the
legislation and the legislative history for indications of legislative intent.32 Legislative
intent does not clarify how the phrase “continuing future periodic compensation
payments” should be interpreted. The legislature intended that the workers’
compensation statute “be interpreted so as to ensure the quick, efficient, fair, and
predictable delivery of indemnity and medical benefits to injured workers at a reasonable
cost to the employers who are subject to [it].”33 Interpreting “continuing future periodic
compensation payments” to include future medical benefits is consistent with ensuring
30
AS 23.30.095(a).
31
W EBSTER ’S II NEW COLLEGE DICTIONARY 838 (3d ed. 2005).
32
Alyeska Pipeline Serv. Co. v. DeShong, 77 P.3d 1227, 1234 (Alaska 2003).
33
AS 23.30.001(1).
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the quick and predictable delivery of benefits to injured workers, but it could be costly
to employers because of their limited means to recover payments if they win on appeal.34
There is very little legislative history specifically about the stay standard.
As Adamson points out, the amendment to AS 23.30.125(c) was part of a package of
amendments related to creation of the Commission. The only versions of the bill that
amended AS 23.30.125(c) were those versions that included establishment of the
Commission.35 The governor, who sponsored the legislation, indicated in his transmittal
letter that one reason he proposed the bill was to “address medical costs” in the workers’
compensation system by reviewing the system and proposing solutions.36 But the letter
did not suggest a desire to change the process for appealing a Board decision beyond
creating a commission whose decisions would be precedential and speedy.37
The parties only mention one specific reference to the stay standard in the
legislative history: The Department of Law, comparing versions of the bill for the Free
Conference Committee, said the amendment to AS 23.30.125 “[p]ermits [the]
commission to issue a stay, but continuing future payments may not be stayed without
a showing by the appellant of irreparable harm and the existence of the probability of the
merits being decided adversely to the compensation recipient. (current case law
standard).” This small piece of legislative history does not illuminate whether the
34
See Croft v. Pan Alaska Trucking, Inc., 820 P.2d 1064, 1066-67 (Alaska
1991) (holding that AS 23.30.155(j) is exclusive means to recover overpayments of
compensation).
35
Compare S.B. 130, C.S.S.B. 130(FIN) am, C.C.S. S.B. 130, C.C.S. S.B. 130
(fld H), F.C.C.S. S.B. 130, and F.C.C.S. S.B. 130 (efd pfld H), with C.S.S.B. 130(L&C),
C.S.S.B. 130(JUD), C.S.S.B. 130(FIN), H.C.S. C.S.S.B. 130(L&C), H.C.S. C.S.S.B.
130(JUD) and H.C.S. C.S.S.B. 130(JUD) am H.
36
2005 Senate Journal 466.
37
Id. at 465-68.
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legislature intended “continuing future periodic compensation payments” to include
future medical benefits because there was no case law standard for future medical
benefits.
E. Precedent, Reason, And Policy
Because AS 23.30.125(c) is ambiguous and because of the paucity of
legislative history, we construe “continuing future periodic compensation payments” “so
as to adopt [the] rule of law that is most persuasive in light of precedent, reason, and
policy.”38 Although we agree with the Municipality that “pertinent court decisions may
be consulted in the interpretation of statutes which restate decisional law,” we disagree
with the Municipality’s analysis of how the legislation should be interpreted in light of
our prior decisions. The Municipality, like the Commission, interprets the legislature’s
use of language similar to Olsen Logging as limiting the probability of success on the
merits standard to stays of disability benefits on which the employee relies as a salary
substitute. But the legislature did not restrict this standard to disability payments when
it rewrote AS 23.30.125(c).
Our decision in Childs v. Copper Valley Electric Ass’n supports interpreting
“continuing future periodic compensation payments” to include future medical benefits
that the Board has awarded.39 In Childs we construed a part of the statute that refers to
“installment[s] of compensation” as including medical benefits.40 We held there that
“compensation” in AS 23.30.155(e) included medical benefits; at the time subsection
.155(e) provided that “[i]f any installment of compensation payable without an award is
38
State v. Pub. Safety Emps. Ass’n, 93 P.3d 409, 416 (Alaska 2004) (quoting
Pub. Safety Emps. Ass’n v. State, 799 P.2d 315, 319 (Alaska 1990)) (internal quotation
marks omitted).
39
860 P.2d 1184 (Alaska 1993).
40
Id. at 1192.
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not paid within seven days after it becomes due, . . . there shall be added to the unpaid
installment an amount equal to 20 percent of it.”41 We rejected the view from states
“exclud[ing] medical benefits from ‘compensation,’ on the grounds that medical benefits
are not typically paid by means of installments.”42 “Installment” is defined as “[a]
periodic partial payment of a debt.”43 In addition, AS 23.30.155(a) also uses the word
“periodic,” providing that “[c]ompensation under this chapter shall be paid periodically,
promptly, and directly to the person entitled to it, without an award, except where
liability to pay compensation is controverted by the employer.”
Other states consider future medical compensation payments to be like other
ongoing compensation payments. In construing its workers’ compensation statute, the
Maine Supreme Judicial Court held that an employer was required to pay ongoing
medical benefits while an appeal was pending even if the employer had no way to
recover the benefits if it were successful on appeal.44 The Maryland Court of Special
Appeals, in a case concerning payment of past medical benefits, indicated that ongoing
medical benefits should be treated like other ongoing benefits: The court said the
purpose of the anti-stay provision of its workers’ compensation statute was “to prevent
a cessation of the weekly compensation benefits and ongoing medical care that are
necessary for a claimant’s survival and well-being while an appeal is pending.”45
41
Id. The legislature amended subsection (e) in 1988 to increase the penalty
award to 25 percent. Id. at 1192 n.8.
42
Id. at 1192 (citing Int’l Paper Co. v. Kelley, 562 So. 2d 1298, 1302 (Miss.
1990)).
43
BLACK ’S LAW DICTIONARY 868 (9th ed. 2009).
44
Ryerson v. Pratt & Whitney Aircraft, 495 A.2d 808, 811-12 (Me. 1985).
45
Univ. of Maryland Med. Sys. Corp. v. Erie Ins. Exch., 597 A.2d 1036, 1041
(Md. App. 1991).
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There are policy arguments on both sides of this issue. Medical treatments
can be expensive, and the Municipality points to a report by the Division of Workers’
Compensation showing that medical costs account for about three-fourths of workers’
compensation costs in Alaska.46 Because the probability of success on the merits is a
high threshold, and because the employer cannot recover overpaid benefits in all cases,
there are reasons to be cautious about construing “continuing future periodic
compensation payments” to include all medical benefits. On the other hand there are also
good reasons to treat medical care, especially medical care sought in the first two years
following an injury,47 as similar to “periodic disability payments on which an employee
relies as a salary substitute.”48 Both Adamson and Olsen discuss the necessity of medical
care to an injured worker, and Olsen’s case illustrates the difficulty an employee can face
if she has no other health insurance and cannot otherwise pay for a needed procedure.49
In addition, when an employee cannot get medical treatment, she can face a prolonged
period of unemployment or underemployment, and her condition may worsen while she
46
It is not clear from the report whether the medical costs include evaluations
like second independent medical evaluations as well as direct care for injured workers.
47
See AS 23.30.095(a) (requiring the employer to provide medical care as
needed for recovery for time period not to exceed two years).
48
Olsen Logging Co. v. Lawson, 832 P.2d 174, 176 (Alaska 1992).
49
The difficulty she faces in completing treatment undermines the
Municipality’s assertion that injured workers still have access to reasonable and
necessary medical treatment, even when their Board-ordered treatment has been stayed.
Olsen’s doctor testified that the lab does not begin to grow cells for future implantation
until “all the paperwork for insurance is done.”
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waits for the appeal. Delaying treatment can also delay the date of medical stability,50
which delays an assessment of any permanent impairment.51
In discussing the balance of hardships approach in Olsen Logging, we said
that “[w]here the injury which will result from . . . the preliminary injunction is not
inconsiderable and may not be adequately indemnified by a bond, a showing of probable
success on the merits is required.”52 In many cases involving medical care, that standard
is met. A bond may ensure payment of the cost of treatment at a later date, but an injured
worker who has to delay treatment while an appeal is pending is not able to recover
anything for continuing pain and may have a reduced income for a considerable period
of time while waiting for medical care. Moreover, when the Commission is considering
a request to stay future medical benefits, the Board has already conducted a hearing,
evaluated the evidence, and determined compensability. In other words, when an
employer seeks a stay of future medical benefits, “the employer has just lost on the merits
in a competent forum.”53
Olsen Logging essentially set up a system in which the balance of hardships
was determined in advance. If the stay involved ongoing benefits that an injured worker
would use as a salary substitute, then the balance of hardships tipped in favor of the
injured worker; on the other hand, when the issue involved a lump sum, the balance of
50
See AS 23.30.395(27) (defining medical stability).
51
See AS 23.30.185 (providing that TTD cannot be paid after medical
stability).
52
832 P.2d at 176 (quoting State v. United Cook Inlet Drift Ass’n, 815 P.2d
378, 379 (Alaska 1991)).
53
See 8 ARTHUR LARSON & LEX K. LARSON , LARSON ’S W ORKERS ’
COMPENSATION LAW § 130.08[4] (2012) (discussing legal standards for stays on appeal
of workers’ compensation benefits).
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hardships favored the employer. We recognize that medical benefits are different from
disability payments in that they are not fixed — there is substantial variation in the type
of treatment an employee seeks as well as the cost and effectiveness of treatment. But
they are more like disability payments that an employee relies on as a salary substitute
than lump sums; like benefits an employee needs as a salary substitute, the hope of future
medical treatment “is a meager substitute” for needed care.54
V. CONCLUSION
For the foregoing reasons, we AFFIRM the Commission’s order in
Municipality of Anchorage v. Adamson. We VACATE the Commission’s order in
Olsen v. City & Borough of Juneau and REMAND to the Commission for further
proceedings consistent with this opinion.
54
Olsen Logging Co., 832 P.2d at 176.
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