Wash. court upholds recoupment of vocational school overpayments

The Washington Department of Labor and Industries could recoup more than $147,000 in overpayments plus interest from a vocational school that trained injured workers, holding that the agency was not bound by the one-year statute of limitations that applies to repayment of workers compensation benefits, a state appeals court ruled Tuesday.

In Office Careers v. State Labor & Industriesthe Washington Court of Appeals said the one-year limit in state law applies only to “benefits” paid to injured workers or their beneficiaries — not to payments made to vocational rehabilitation providers such as Office Careers.

Office Careers, a private vocational school approved by the department since 2010, provided retraining programs for injured workers unable to return to their prior jobs. After audits covering billing and job placement practices, the department found the school had overbilled for students who never started programs or left early and failed to provide required refunds.

The first audit identified $25,434.50 in overbilling, while a second audit found an additional $122,069.50. With interest, the department sought more than $200,000 in recoupment and also terminated Office Careers’ provider number, ending its eligibility for new referrals.

Office Careers argued that the department could recover only overpayments made within one year under the state law that governs mistaken benefit payments.

The appeals court disagreed, finding that tuition payments to vocational schools are “costs,” “reimbursements,” or “fees,” not statutory “benefits.”

“The worker is the recipient of the vocational rehabilitation benefit, not the provider of vocational rehabilitation services,” the court wrote.

The court also upheld summary judgment affirming the termination of Office Careers’ provider number, noting the school had filed a notice of non-opposition to the department’s motion and failed to show any genuine dispute of fact.

The opinion said Office Careers demonstrated only a 3.9% job placement rate during the first audit period, far below the 50% placement rate required under Washington regulations for vocational training providers.