206 A.3d 660
Pa. Commw. Ct.2019Background
- Armour Pharmacy dispensed a compounded topical cream to a workers’ compensation claimant and submitted three invoices (~$3,634.17 each) to Wegman’s (employer/insurer), which were denied for reasons including alleged fee-schedule excess, that compounds aren’t covered, and that utilization review/medical records were required.
- Pharmacy filed three applications with the Bureau’s Medical Fee Review Section; that Section found timely denials and calculated amounts due ($3,322.16 each plus 10% interest) and ordered reimbursement.
- Employer sought de novo hearings, asserting the Pharmacy was not a “provider” under the Workers’ Compensation Act and therefore not entitled to payment; it later moved to dismiss its own appeal on jurisdictional grounds.
- The Fee Review Hearing Office vacated the Medical Fee Review Section determinations and dismissed the matter, holding neither the Fee Review Section nor the Hearing Office could determine "provider" status (relying on Selective Insurance v. Bureau (Physical Therapy Institute)).
- Pharmacy appealed, arguing Selective Insurance should be limited/overruled because leaving provider-status outside the Hearing Office’s jurisdiction denies providers any forum and violates due process; Pharmacy sought a directive that the Hearing Office determine provider status or that a regulation be promulgated to afford a remedy.
- The Commonwealth Court reversed the Hearing Office, holding that when an employer challenges a fee determination on the ground the billing entity is not a "provider," the Hearing Office must conduct a hearing to decide that threshold jurisdictional question and remanded for that determination.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Hearing Office may decide if billing entity is a “provider” under the Act | Pharmacy: Hearing Office should decide provider status; otherwise providers lack any forum and are denied due process | Employer: Prior precedent bars Hearing Office from deciding provider status; jurisdictional issue can be raised anytime and Fee Review Section is limited to amount/timeliness | Court: Hearing Office must determine provider status when employer challenges it in a fee review appeal; overruled Selective Insurance to that extent |
| Whether Medical Fee Review Section could decide provider status | Pharmacy: Fee Review Section lacks authority to decide jurisdictional threshold; Hearing Office must do so through evidentiary hearing | Employer: Fee Review/Hearing Office lack jurisdiction—provider status is a liability question for WCJ or claimant-driven proceedings | Court: Fee Review Section cannot decide provider status; Hearing Office (adjudicative forum) must hold hearing on provider status |
| Whether failure to provide a forum for providers violates due process | Pharmacy: Denying a hearing deprives providers of property without due process; legislative/regulatory gap leaves providers without remedy | Employer: Pharmacy waived due process claim and could obtain relief via other proceedings; Hearing Office should not expand fee review scope | Court: Due process and statute’s adjudicative framework require the Hearing Office determine provider status in contested cases to avoid deprivation without a hearing |
| Whether Selective Insurance and related precedent control | Pharmacy: Selective Insurance should be limited/overruled where employer presents no evidence that billing entity is not provider | Employer: Prior cases and regulations restrict fee review to amount/timeliness and bar provider-status determinations by Hearing Office | Court: Selective Insurance is distinguishable and to the extent inconsistent is overruled; Hearing Office can decide provider-status threshold issues |
Key Cases Cited
- Selective Ins. Co. of Am. v. Bureau of Workers’ Comp. Fee Review Hearing Office (The Physical Therapy Institute), 86 A.3d 300 (Pa. Cmwlth.) (prior precedent holding Hearing Office lacked jurisdiction to decide provider-status issue in fee-review appeals)
- Physical Therapy Institute, Inc. v. Bureau of Workers’ Comp. Fee Review Hearing Office, 108 A.3d 957 (Pa. Cmwlth.) (discussing limits on fee-review and alternative remedies for billing entities)
- Nickel v. Workers’ Compensation Appeal Bd. (Agway Agronomy), 959 A.2d 498 (Pa. Cmwlth.) (fee review presupposes established liability; officer cannot decide liability)
- Crozer-Chester Med. Ctr. v. Dep’t of Labor & Indus., Bureau of Workers’ Comp., Health Care Serv. Review Div., 22 A.3d 189 (Pa.) (fee review is narrow and limited to amount/timeliness)
- Armour Pharmacy v. Bureau of Workers’ Comp. Fee Review Hearing Office (National Fire Ins. Co. of Hartford), 192 A.3d 304 (Pa. Cmwlth.) (C&R could not be used to deprive nonparty provider of payment where liability for treatment had been established)
- J.G. v. Dep’t of Public Welfare, 795 A.2d 1089 (Pa. Cmwlth.) (Administrative Agency Law fills statutory gaps to afford hearings where adjudication affects personal/property rights)
- Pittsburgh Moose Lodge #46 v. Workmen’s Comp. Appeal Bd. (Greico), 530 A.2d 982 (Pa. Cmwlth.) (subject-matter jurisdiction may be raised at any time)
- Westinghouse Elec. Corp. v. Workers’ Comp. Appeal Bd. (Weaver), 823 A.2d 209 (Pa. Cmwlth.) (penalties for insurer’s violation payable to claimant; claimants can vindicate provider rights)
- Cruz v. Workers’ Comp. Appeal Bd. (Philadelphia Club), 728 A.2d 413 (Pa. Cmwlth.) (providers must have notice and opportunity to participate when their treatment is challenged)