ALJ: Claimant Lacks Standing to Challenge Direct Payment of Medical Benefits

Claimant sustained shrapnel injuries in Iraq.  His right to Defense Base Act (“DBA”) benefits was undisputed.  Eventually, Claimant settled the indemnity portion of his DBA claim, but he left his medical benefits open.  Once the settlement was approved, Employer and Carrier requested reimbursement and the direct payment of benefits in accordance with the provisions of the War Hazards Compensation Act (“WHCA”).  See 42 U.S.C. § 1704 and 20 C.F.R. § 61.105.  The Division of Federal Employees’ Compensation (referred to here as “Director”) accepted the WHCA claim.  Further, the Director notified Claimant that his medical benefits would be paid by the WHCA. 

Claimant, however, did not want his medical benefits paid by the Director, but instead by Employer and Carrier.  He demanded a hearing to adjudicate his right to additional medical benefits paid by Employer and Carrier instead of the Director.   Employer and Carrier moved for summary judgment, stating that  they owed no further medical benefits. 

The issue for the summary judgment was whether a claimant can demand an employer and carrier to pay for medical benefits in an accepted WHCA/direct payment case when the Director has already agreed to pay benefits pursuant to WHCA regulations.  To put it in even simpler terms: can a claimant choose the source that funds his benefits?

In a well-reasoned decision, the Administrative Law Judge determined that Claimant cannot challenge the source of funding.  When only the source of funds is an issue, “a claimant has no standing to challenge the applicability of the statutory provision that determines the funding source.”  Just like the Second Injury Fund, see 33 U.S.C. § 908(f), the WHCA “provides only a source of benefits.”  Smith v. Director, 17 BRBS 89 (1985).  To be sure, Claimant’s substantive right to benefits is determined by the DBA; but the ministerial act of paying the benefits (including the medical treatment) is outside the scope of Claimant’s standing.

Cathey v. Service Employees Int’l, Inc., 2012-LDA-00064 (OALJ 01/18/12).