Nebraska Supreme Court Rules Employer Must Pay for Medical Care It Denied as Non-Compensable

Keri Clark worked as a nurse for Alegent Health Nebraska in Omaha. She suffered a work-related injury and filed a workers' compensation claim seeking payment for her medical treatment. Alegent denied that the injury was compensable, meaning it refused to accept liability and declined to direct or cover her care.

Because Alegent denied the claim, Clark arranged her own treatment with the physicians she chose, including doctors outside any referral network the employer might have established. She designated Dr. Nystrom as her primary treating physician on the required court form. Other doctors she saw during treatment were not formally referred through Dr. Nystrom.

The Nebraska Workers' Compensation Court found Clark's injury compensable but then refused to order payment for medical services provided by physicians outside the referral chain from Dr. Nystrom. The trial court interpreted the statutory physician-selection rules under Nebraska Revised Statute section 48-120 to require proof that each treating doctor had been referred by the designated treating physician. Under that reading, Clark bore responsibility for the gap in referral documentation.

Richard J. Rensch and Sean P. Rensch of Rensch and Rensch in Omaha represented Clark on appeal. They argued that the chain-of-referral provisions in section 48-120 did not apply when an employer denied compensability in the first place. The Nebraska Supreme Court agreed.

In its January 18, 2013 opinion, the court held that once an employer denies a claim and the injury is later found compensable, the employee cannot be penalized for having made independent medical arrangements during the denial period. The court stated that an employer who has sufficient knowledge of an injury has an affirmative duty to provide prompt and adequate medical treatment; if it refuses, the employee may seek independent care at the employer's expense. Because Alegent had denied compensability entirely, Clark was not subject to the chain-of-referral rules. The Supreme Court reversed the trial court's ruling on that issue and remanded for further proceedings consistent with its holding.

The decision is reported at 285 Neb. 60, 825 N.W.2d 195 (2013) and has been cited in subsequent Nebraska workers' compensation decisions, including Fentress v. Westin Inc. LM (2019), for the principle that denial of compensability frees an injured worker to select physicians independently.