Allen & Gooch Blog

Maritime Casualty

Determining the Amount of Cure Owed to Your Seamen–Employees

Cure Is Paid Only for Incurred Medical Expenses

“Cure” is a shipowner’s obligation to pay necessary medical expenses for seamen injured while in service of its ships.  Seamen are only entitled to recover cure for medical expenses actually incurred rather than the amount charged.  (Medical bills are frequently charged/billed at a certain rate and then paid at a discounted rate.)  We previously wrote on this subject:  “This is true whether the charges are incurred by a seaman’s insurer on his own behalf and paid at a written-down rate, or whether the charges are paid by the seaman himself (usually at a non-discounted rate).”


Howard and Kelly

This rule, however, becomes complicated when seamen enter into complex medical payment arrangements.  For example, in Howard v. Offshore Liftboats, LLC, 2016 WL 232252 (E.D. La. Jan. 19, 2016), the injured seaman incurred $56,451.72 in medical expenses.  However, he did not pay that full amount.  Instead, a third-party financing company, Diagnostic Management Affiliates (“DMA”), paid the seaman’s medical bills at a discounted rate of $24,443.20.  The seaman’s employer argued that it was only required to pay cure in the amount of $23,443.20 (arguably the amount incurred) rather than the full $56,451.72 (arguably the amount charged).

The court disagreed.  It noted, “[t]he relevant amount is that needed to satisfy the seaman’s medical charges.”  In this case, the seaman had agreed to pay DMA the full retail price of his medical charges incrementally over time, regardless of the actual discounted rate obtained by DMA.  In other words, the seaman was required to pay the full $56,451.72; therefore, his employer was required to pay cure in the same amount.

The Howard court referenced a similar case: Kelly v. Bayou Fleet, Inc., 2009 WL 1668490 (E.D. La. June 12, 2009). In Kelly the plaintiff was charged the retail price of medical treatments in exchange for DMA arranging and paying for the treatment (at a discounted rate).  Since the defendant–employer agreed to pay “all medical expenses” in a settlement agreement, the court ruled that the employer was required to pay the full retail amount to DMA.


Determining the Amount of Cure Owed

These cases illustrate the importance of determining the amount of medical expenses that your seamen-employees are contractually required to pay.  Determining the amount of cure owed is easy when the seaman’s medical bills have not been discounted.  However, sometimes the seaman pays his medical bills at a discounted rate; and sometimes—as shown by Howard and Kelly—the seaman’s medical bills are paid at a discounted rate, but the seaman (and indirectly his employer) is obligated to pay the full amount.

Allen & Gooch is providing this legal update for informational purposes only. This article should not be construed as legal advice or a legal opinion as to any specific facts or circumstances. You should consult your own attorney concerning your particular situation and any specific legal questions you may have.