Can Texas's workers' comp board approve a settlement that ends an injured worker's right to future medical benefits?

Texas AG Opinion JM-931: Can the Comp Board Settle Away Future Medical Benefits?

Plain-English summary

Texas ran its workers' compensation system in 1988 through the Industrial Accident Board. When a worker was hurt on the job, the board (or a court) eventually decided two things: whether the insurance carrier was liable, and how serious the injury was. Medical care for a work injury can stretch on for years, so a recurring question was what happens to future medical bills once the case is essentially over. The chairman of the board asked the Attorney General a pointed version of that question: can the board approve a settlement that wipes out the carrier's responsibility for all future medical expenses?

The Attorney General said no, and split the analysis into two situations.

The first situation is where there has already been a final award by the board or a final judgment by a court. The board's power to approve a compromise settlement came from section 12 of article 8307, and that section only let the board approve a compromise "where the liability of the association or the extent of the injury is uncertain." That word "uncertain" is the whole ballgame. A final award or judgment, by definition, has already decided who is liable and how bad the injury is. Once those two questions are answered, there is no uncertainty left, so section 12 gives the board nothing to work with. The opinion leaned on an earlier ruling, JM-361 from 1985, which had held that not knowing the future dollar amount of medical costs is not the kind of "uncertainty" section 12 is talking about. What the law does provide, in section 5, is a different tool: the board keeps continuing jurisdiction to issue successive awards covering medical items that were actually furnished to the worker, case by case, until the carrier has fully met its obligation. That is a mechanism for paying real bills as they come in, not for buying out future care in one lump.

The second situation is where the parties had already signed an original compromise settlement agreement that the board approved. Here a 1983 amendment, section 12b, is decisive. It says flatly that the board "shall have no jurisdiction to rescind or set aside any compromise settlement agreement approved by the board or any agreed judgment approved by the court." Approving a brand-new settlement that terminates future medical liability would, in practice, unwind the original settlement at least in part. Since the board cannot rescind or set aside the original, it cannot do indirectly what section 12b forbids directly. Section 12b instead sets up a specific procedure: when a dispute about medical or related expenses arises under an approved settlement or agreed judgment, a party brings it to the board within six months, and the board resolves the dispute. That is the lane the law leaves open, and it is about resolving disputes over owed care, not extinguishing the right to future care.

Underlying both parts is a simple principle the opinion states up front: the Industrial Accident Board is a creature of statute with only the powers the Legislature gave it. Because no statute authorized it to approve a settlement ending future medical liability after a final award, judgment, or approved settlement, it had no such power.

Currency note

This opinion was issued in 1988. Later statutes, court decisions, and AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule mentioned here.

This one matters a great deal, because the entire system this opinion describes was overhauled shortly afterward. Texas enacted a sweeping workers' compensation reform at the end of the 1980s that abolished the Industrial Accident Board, replaced it with a new administering agency, and repealed and recodified the old statutes. The article 8306 and 8307 provisions cited here (sections 5, 7, 11a, 12, and 12b) no longer exist in that form; the governing law is now the Texas Labor Code. The rules on settlements, medical benefits, lifetime medical care, and dispute resolution under the current system are different. Anyone dealing with a Texas work-injury claim today should look to the current Labor Code and the current administering agency, not to the 1988 framework analyzed here.

Who this opinion affected (as of 1988)

Injured workers: The opinion protected the right to future medical care after a case was decided. Once liability and the extent of injury were finally set, the board could not sign off on a deal terminating a worker's future medical benefits; medical claims were instead handled through successive awards for care actually received.

Insurance carriers: The opinion foreclosed a common goal of buying certainty by settling away open-ended future medical exposure once a final award, judgment, or approved settlement was in place. That door was closed.

The Industrial Accident Board itself: The opinion defined the limits of the board's own authority, confirming it could resolve disputes over owed medical expenses but could not approve settlements ending future medical liability.

Common questions

Could an injured Texas worker's future medical benefits be settled away in 1988?
Not after a final award of the board, a court judgment, or an approved compromise settlement that had not been set aside. In those situations the Attorney General concluded the Industrial Accident Board had no authority to approve a settlement terminating liability for future medical expenses.

Why did it matter whether the case was already decided?
Because the board's authority to approve a compromise came from a statute that applied only where liability or the extent of the injury was "uncertain." A final award or judgment resolves both, so there was no uncertainty left to support a compromise.

What could the board do about future medical bills instead?
Under section 5, the board kept continuing jurisdiction to issue successive awards covering medical items actually furnished to the worker, until the carrier fully met its obligation. That handles real bills as they arise rather than extinguishing future care.

What if the parties had already reached an approved settlement?
A 1983 amendment (section 12b) barred the board from rescinding or setting aside an approved settlement or agreed judgment. A later settlement ending future medical liability would effectively undo the original, so it was not allowed; section 12b provided a dispute-resolution procedure instead.

Does any of this still apply?
No. See the currency note. Texas replaced this whole system at the end of the 1980s, abolished the Industrial Accident Board, and moved the law into the Labor Code.

Background and statutory framework

The Industrial Accident Board is an administrative body created by statute and possessing only those powers conferred on it by statute (Commercial Casualty Insurance Co., 87 S.W.2d [page not legible] (Tex. 1935); V.T.C.S. art. 8307, section 1). The Attorney General concluded that the board's authority to approve a compromise settlement after a final award or judgment is governed by different statutory provisions than its authority to approve one after an original compromise settlement agreement, and addressed each separately.

After a final award of the board or judgment of a court: Attorney General Opinion JM-361 (1985) had addressed whether the board could approve, while a case was pending, a compromise settlement terminating liability for future medical expenses where the carrier had admitted liability and the injury was conclusively total and permanent under article 8306, section 11a, V.T.C.S. Noting that section 12 of article 8307 authorized the board to approve a compromise settlement "[w]here the liability of the association or the extent of the injury is uncertain," JM-361 concluded that where liability was admitted and incapacity was total and permanent as a matter of law, there was no "uncertainty" as to liability or extent of injury within the meaning of section 12, and that uncertainty as to the amount of future medical expenses was not "uncertainty" of the kind section 12 requires. It follows that after a final award or judgment, the board has no authority to approve a compromise settlement terminating liability for future medical expenses, because the final award or judgment necessarily determined liability and extent of injury, leaving no remaining uncertainty. Section 5 of article 8307 confirms that questions arising under the law, if not settled by agreement, are determined by the board, and that a party unwilling to abide by the board's final ruling must file notice and bring suit within the prescribed periods. Section 5 also makes the only specific provision for the board's handling of medical-expense claims after a final award or judgment: the first final award or judgment is res judicata of liability for medical expenses that could have been claimed up to its date, but not of the association's obligation for such items afterward, and after that first final award or judgment the board has continuing jurisdiction to render successive awards for medical items actually furnished to and received by the employee (not more than six months before each successive award) until the association has fully discharged its obligation, with each successive award subject to suit to set it aside. The board possesses only statutory powers, and no provision authorizes it to approve compromise settlements terminating future medical liability after a board award or court judgment.

After an original approved compromise settlement agreement: the Attorney General found no reported cases addressing a compromise settlement made after an original compromise settlement. Courts have held that once an original compromise settlement is approved by the board, it binds the parties until lawfully set aside by a court (Luersen v. Transamerica Insurance Co., 550 S.W.2d 171 (Tex. Civ. App. - Austin 1977, writ ref'd n.r.e.); Pearce v. Texas Employers Insurance Association, 403 S.W.2d 493 (Tex. Civ. App. - Dallas 1966, writ ref'd n.r.e.), reh'g denied, 412 S.W.2d 647 (Tex. 1967)). Section 12b of article 8307, V.T.C.S. (added by Acts 1983, 68th Leg., ch. 501, section 1), now provides that the board "shall have no jurisdiction to rescind or set aside any compromise settlement agreement approved by the board or any agreed judgment approved by the court," and sets up a specific procedure: whenever a dispute arises concerning payment of medical, hospital, nursing, chiropractic, podiatry, or related services or aids, or medicines or prosthetic appliances under section 7 of article 8306 or under an approved settlement or agreed judgment, any party must first present the dispute to the Industrial Accident Board within six months (absent good cause for delay) for the board's determination. Approving a compromise settlement over medical expenses after an original approved settlement would necessarily have the effect of rescinding or setting aside the original at least in part, and is therefore barred by section 12b, which instead supplies the medical-dispute procedure.

Citations

Statutory authority:

• V.T.C.S. article 8307, section 1 (Industrial Accident Board; body with only statutory powers)
• V.T.C.S. article 8307, section 5 (determination of questions by the board; res judicata effect of first final award or judgment; continuing jurisdiction over successive medical-expense awards)
• V.T.C.S. article 8307, section 12 (board may approve compromise settlement where liability or extent of injury is uncertain)
• V.T.C.S. article 8307, section 12b (board has no jurisdiction to rescind or set aside approved settlements or agreed judgments; medical-dispute procedure) (Acts 1983, 68th Leg., ch. 501, section 1)
• V.T.C.S. article 8306, section 11a (conclusively total and permanent incapacity)
• V.T.C.S. article 8306, section 7 (medical, hospital, and related services)

Cases:

• Luersen v. Transamerica Insurance Co., 550 S.W.2d 171 (Tex. Civ. App. - Austin 1977, writ ref'd n.r.e.) (Texas appellate court; approved settlement binds parties until set aside by a court)
• Pearce v. Texas Employers Insurance Association, 403 S.W.2d 493 (Tex. Civ. App. - Dallas 1966, writ ref'd n.r.e.), reh'g denied, 412 S.W.2d 647 (Tex. 1967) (Texas courts; binding effect of approved compromise settlement)

Prior Attorney General materials referenced: JM-361 (1985).

(The opinion also cites a 1935 Texas Supreme Court case, Commercial Casualty Insurance Co., 87 S.W.2d, for the point that the board has only statutory powers; the scan left its page number and the second party's name illegible, so the full citation is not reproduced here.)

Source

• Landing page: https://www.texasattorneygeneral.gov/opinions/jim-mattox/jm-931
• Original PDF: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1988/jm0931.pdf

Original opinion text

Best-effort transcription from a scanned PDF. Minor OCR errors may remain; the linked PDF is authoritative. A case name and page number the scan rendered illegible are marked in brackets.

July 25, 1988

Mr. Joseph C. Gagen
Chairman
Texas Industrial Accident Board
200 East Riverside
Austin, Texas 78704

Opinion No. JM-931

Re: Authority of the Industrial Accident Board to approve a settlement agreement that would terminate liability for future medical expenses (RQ-1353)

Dear Mr. Gagen:

You ask:

Does the authority of the Industrial Accident Board over medical expenses incurred after a final award, judgment, or settlement, extend to approving compromise settlement agreements that would terminate all liability for future medical expenses?

The Industrial Accident Board (the "board") is an administrative body created by statute and possessing only those powers conferred on it by statute. Commercial Casualty Insurance Co. [v. name not legible], 87 S.W.2d [page not legible] (Tex. 1935). V.T.C.S. art. 8307, section 1.

We believe that the determination of the board's authority to approve a compromise settlement agreement subsequent to a final award of the board or a judgment of a court is governed by different statutory provisions than those apposite to the determination of the board's authority to approve compromise settlement agreements subsequent to an original compromise settlement agreement. We will therefore treat these two elements of your question separately.

AUTHORITY OF BOARD TO APPROVE COMPROMISE SETTLEMENT AGREEMENT REGARDING FUTURE MEDICAL EXPENSES SUBSEQUENT TO FINAL AWARD OF BOARD OR JUDGMENT OF COURT.

Attorney General Opinion JM-361 (1985) dealt with the question of whether the board may approve, while a case is pending before the board, a compromise settlement agreement which terminates liability for future medical expenses, if the carrier had admitted liability and the injury was one conclusively held to be total and permanent pursuant to article 8306, section 11a, V.T.C.S.

Noting that section 12 of article 8307, V.T.C.S., authorized the board to approve a compromise settlement agreement "[w]here the liability of the association or the extent of the injury is uncertain," JM-361 concluded that where the carrier had admitted liability and where the injury was one for which as a matter of law incapacity was total and permanent, there was no "uncertainty" as to liability or extent of injury within the meaning of section 12. The opinion ruled that uncertainty as to amounts of future medical expenses was not "uncertainty" within the meaning of section 12 such that the board would be authorized to approve a compromise settlement agreement regarding only future medical expenses, where liability and extent of injury had been established.

In our opinion, it follows from the ruling in JM-361 that the board has no authority to approve a compromise settlement agreement that would terminate liability for future medical expenses after a final award of the board or a judgment of a court, because the proceedings of the board or a court in rendering a final award or judgment would necessarily have determined "liability" and "extent of injury" such that there would be no remaining "uncertainty" within the meaning of section 12 which would authorize the board to approve a compromise settlement agreement regarding future medical expenses. That a final award by the board or a judgment of a court would have resolved uncertainty as to liability or extent of injury is apparent from a reading of pertinent parts of section 5 of article 8307:

All questions arising under this law, if not settled by agreement of the parties interested therein and within the provisions of this law, shall, except as otherwise provided, be determined by the Board. Any interested party who is not willing and does not consent to abide by the final ruling and decision of said Board shall, within twenty (20) days after the rendition of said final ruling and decision by said Board, file with said Board notice that he will not abide by said final ruling and decision. And he shall within twenty (20) days after giving such notice bring suit in the county where the injury occurred, or in the county where the employee resided at the time the injury occurred (or, if such employee is deceased, then in the county where the employee resided at the time of his death), to set aside said final ruling and decision, and said Board shall proceed no further toward the adjustment of such claim, other than hereinafter provided. . . . Whenever [suit is] brought, the rights and liabilities of the parties thereto shall be determined by the provisions of this law. (Emphasis added.)

The liability of the association and the extent of the injury are the two key issues to be determined by the board or by a court in a worker's compensation case. We find no provision of law relieving the board or a court from the duty to determine liability and extent of injury in rendering a final award or judgment. Once liability and extent of injury are finally determined by the board or by a court, there would remain no uncertainty as to the liability or extent of injury that would authorize the board under section 12 to approve a subsequent compromise settlement agreement regarding future medical expenses.

Moreover, section 5 makes the only specific provision for the board's handling of medical expense claims after a final award by the board or a judgment of a court.

Notwithstanding any other provision of this law, as amended, no award of the Board, and no judgment of the court, having jurisdiction of a claim against the association for the cost or expense of items of medical aid, hospital services, nursing, chiropractic services, medicines or prosthetic appliances furnished to an employee under circumstances creating a liability therefor on the part of the association under the provisions of this law, shall include in such award or judgment any cost or expense of any such items not actually furnished to and received by the employee prior to the date of said award or judgment. The first such final award or judgment rendered on such claim shall be res judicata of the liability of the association for all such cost or expense which could have been claimed up to the date of said award or judgment and of the issue that the injury of said employee is subject to the provisions of this law with respect to such items, but shall not be res judicata of the obligation of the association to furnish or pay for any such items after the date of said award or judgment. After the first such final award or judgment, the Board shall have continuing jurisdiction in the same case to render successive awards to determine the liability of the association for the cost or expense of any such items actually furnished to and received by said employee not more than six (6) months prior to the date of each such successive award, until the association shall have fully discharged its obligation under this law to furnish all such medical aid, hospital services, nursing, chiropractic services, medicines or prosthetic appliances to which said employee may be entitled; provided, each such successive award of the Board shall be subject to a suit to set aside said award by a court of competent jurisdiction, in the same manner as provided in the case of other awards under this law. (Emphasis added.)

The board possesses only those powers conferred on it by statute. We have found no provisions authorizing the board to approve compromise settlements subsequent to board awards or court judgments, or to take other action regarding future medical expenses. Section 5 provides a procedure the board may utilize for the disposition of claims for medical expenses incurred subsequent to a board award or court judgment.

AUTHORITY OF THE BOARD TO APPROVE COMPROMISE SETTLEMENT AGREEMENTS REGARDING FUTURE MEDICAL EXPENSES SUBSEQUENT TO AN ORIGINAL COMPROMISE SETTLEMENT AGREEMENT.

We note at the outset that we have found no reported cases dealing with a compromise settlement agreement made subsequent to an original compromise settlement agreement. Many courts have stated that once an original compromise settlement agreement is approved by the board, the agreement is binding on the parties until the original settlement agreement is lawfully set aside by a court. See, e.g., Luersen v. Transamerica Insurance Co., 550 S.W.2d 171 (Tex. Civ. App. - Austin 1977, writ ref'd n.r.e.); Pearce v. Texas Employers Insurance Association, 403 S.W.2d 493 (Tex. Civ. App. - Dallas 1966, writ ref'd n.r.e.), reh'g denied, 412 S.W.2d 647 (Tex. 1967), and the authorities cited therein.

In this vein, section 12b of article 8307, V.T.C.S., now specifically provides that the board "shall have no jurisdiction to rescind or set aside any compromise settlement agreement approved by the board or any agreed judgment approved by the court." Acts 1983, 68th Leg., ch. 501, section 1.

Section 12b now also provides a specific procedure for the board's resolving disputes as to medical expenses arising pursuant to compromise settlement agreements approved by the board or agreed judgments approved by the court:

Whenever in any compromise settlement agreement approved by the board or in any agreed judgment approved by the court, any dispute arises concerning the payment of medical, hospital, nursing, chiropractic or podiatry services or aids or treatment, or for medicines or prosthetic appliances for the injured employee as provided in Section 7, Article 8306, Revised Statutes, as amended, or as provided in such compromise settlement agreements or agreed judgments, all such disputes concerning the payment thereof shall be first presented by any party to the Industrial Accident Board within six months from the time such dispute has arisen (except where 'good cause' is shown for any delay) for the board's determination. . . .

It is our opinion that approval of a compromise settlement agreement regarding medical expenses subsequent to an original approved compromise settlement agreement would necessarily have the effect of rescinding or setting aside, at least to some extent, the original compromise settlement agreement and would thus be barred by section 12b. Section 12b provides a procedure for the board's dealing with questions of medical expenses pursuant to a compromise settlement agreement or agreed judgment approved by a court.

SUMMARY

After a final award of the board, court judgment, or compromise settlement agreement which has not been lawfully set aside, the Industrial Accident Board has no authority to approve a compromise settlement agreement to terminate liability for future medical expenses.

Very truly yours,

JIM MATTOX
Attorney General of Texas

MARY KELLER
First Assistant Attorney General

LOU MCCREARY
Executive Assistant Attorney General

JUDGE ZOLLIE STEAKLEY
Special Assistant Attorney General

RICK GILPIN
Chairman, Opinion Committee

Prepared by William Walker
Assistant Attorney General