Question: What is the amount of a worker’s compensation lien relating to third party injury case?
Answer: In order to establish its lien, the insurance carrier must prove a causal nexus between the injury claim and its payments.
Worker’s compensation insurance carriers are not entitled to a lien on third-party cases merely because it paid workers’ compensation benefits. Rather, the worker’s compensation carrier must establish that its payments were connected to the injury for which the employee recovered from the third party. The trial courts require medical evidence to adjudicate these liens which establishes a nexus between the payments and the settlement injury.
Thus, it is clear that insurance carriers need to prove through expert medical testimony that there is a causal nexus between the third-party claims and any claimed payment to and/or on behalf of a plaintiff for worker’s compensation. This medical evidence must clearly establish the causal nexus, since a mere possibility of cause or which lacks reasonable certainty or probability is not sufficient evidence by itself to support its lien in this case. Note, Indiana’s public policy is to put the employer/insurance carrier paying worker’s compensation benefits in a neutral position by repayment of medical costs it incurred, to make the injured employee whole and to place the cost of the injury on the wrongdoer.