The Supreme Court of Ohio overruled State ex rel. Russell v. Indus. Comm., 82 Ohio St.3d 516, 517, 696 N.E.2d 1069 (1998) and upended over 25 years of precedent in State ex rel. Dillon v. Indus. Comm., Slip Op. No. 2024-Ohio-744. Since 1998, the Industrial Commission has consistently ruled that when temporary total disability (TTD) compensation is terminated based upon a finding of maximum medical improvement (MMI), the appropriate termination date is the date of the termination hearing. Employers have the right to recoup any overpaid amounts after that date.

In Dillon, the Supreme Court ruled that pursuant to R.C. 4123.56(A), a claimant cannot receive TTD after reaching MMI. Dillon’s employer had the right to recoup payments made after the MMI determination even though that was before the date of the termination hearing. The Dillon decision will likely result in a surge of benefit overpayments and recoupments by the Bureau of Workers’ Compensation (BWC) and self-insured employers.

Background

Dillon involved the initial allowance of a claim. The district hearing officer (DHO) allowed the claim for a lumbar sprain and strain, disallowed additionally requested conditions, and required payment of ongoing TTD benefits for the allowed conditions.

Following the DHO, the employer had Dillon examined by a physician who opined that she had reached MMI. On Oct. 28, 2019, a staff hearing officer (SHO) determined that Dillon had reached MMI with regard to the allowed conditions and therefore terminated TTD compensation.

In circumstances where an employer or the BWC tried to terminate an already established right to TTD benefits, Russell required payment up to the date of the hearing (Oct. 28, 2019). Because the right to TTD was already established, any payments up to the hearing were not overpayments. However, here, the SHO terminated TTD compensation as of Aug. 8, 2019, consistent with the date of the MMI report. However, by the time of the SHO’s determination, Dillon had received TTD compensation after Aug. 8, and the BWC therefore issued an order seeking to recoup the $5,549.40 that it had overpaid to her. Dillon appealed this determination.

The Industrial Commission found that the recoupment order was appropriate. Dillon then pursued a writ of mandamus with the Tenth District Court of Appeals seeking to compel the Industrial Commission to vacate the recoupment order and to issue a new order dissolving the overpayment determination. The Tenth District denied the writ.

In a split decision, the Supreme Court affirmed the Tenth District’s verdict and held that by applying the plain language of R.C. 4123.511(K), the BWC correctly ordered the recoupment of TTD compensation payments that Dillon received after she reached MMI from any future benefits she might receive. In doing so, the Supreme Court found that Russell runs counter to the plain language of R.C. 4123.511(K) and R.C. 4123.54(A).

Next Steps for Employers  

The Supreme Court’s decision in Dillon will undoubtedly have a significant impact on TTD compensation. Employers should now argue TTD should be terminated as of the date of the MMI report instead of the termination hearing. If successful, payments of TTD through the date of the termination hearing would be subject to overpayment and recoupment provided by R.C. 4123.511(K).

Employers can also anticipate:

• An increase in overpayment determinations and recoupment orders involving MMI determinations.
• More hotly contested hearings and appeals on MMI determinations.

Lastly, employers should keep in mind that claimants and their counsel will vigorously oppose Dillon. In doing so, they will likely encourage the Ohio Legislature to assess whether the Supreme Court’s decision is at odds with the relevant statutes. Taft will keep you updated on any developments.

If you have questions about the impact of the Dillon decision, please contact a member of Taft’s Workers’ Compensation practice group.