Avenue Surgical Suites v. Jo Ellen Smith Convalescent Center
66 So. 3d 1103
La. Ct. App.2011Background
- In a workers' compensation case, Jo Ellen Smith Convalescent Center authorized pain-management treatment for Jennifer Muse with Avenue Surgical Suites on three dates in 2009.
- Avenue billed $10,300 per service date; Risk Management paid $3,500 per date; four EOB codes discounted the charges.
- The Louisiana Office of Workers' Compensation recommended reimbursement under the Chapter 25, § 2507 formula: 90% of billed charges after deductions; Avenue pursued dispute via 1008 form.
- OWC awarded Avenue $17,310 in additional medical reimbursement, plus interest, and $2,500 in attorney's fees and $6,000 in penalties, which Jo Ellen Smith appealed.
- Trial court and appellate court analyzed reasonableness of charges and the proper application of the 90% formula; the court upheld the award and amended for appellate attorneys' fees.
- On appeal, the court amended the judgment to add $1,000 in attorneys' fees for work performed on appeal and affirmed the judgment as amended.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the charges were usual and customary per the schedule | Smith contends the prepaid amount ($3,500) equals usual charges and satisfies the obligation. | Smith failed to show the $10,300 charges were not reasonable; the center used its own fee schedule. | No manifest error; charges were reasonable per the Formula and the evidence supports 90% payment. |
| Whether penalties and fees were warranted for underpayment | Smith argues no penalties/fees due as the payment complied with the schedule. | Smith acted arbitrarily and capriciously by not timely paying or disputing according to statute. | Penalties and attorneys' fees affirmed; conduct deemed arbitrary and capricious. |
| Whether the 90% Formula properly governs reimbursement | Reimbursement should reflect actual charges, not the discounted amount tendered. | The Formula applies to outpatient ambulatory services; 90% of covered charges is proper. | Formula correctly applied; 90% of $10,300 equals $9,270 per date; total $17,310 due. |
| Whether additional appellate attorney's fees are warranted | Avenue sought fees for appellate work. | Not necessary since the issues were not close; opposition to award on appeal. | Award of $1,000 for appellate work affirmed. |
Key Cases Cited
- James v. A&B Builders, 29 So.3d 541 (La.App. 1 Cir. 2009) (reasonableness and schedule-based reimbursement; penalties may apply for nonpayment)
- Manuel v. River Parish Disposal, Inc., 683 So.2d 791 (La. App. 5 Cir. 1996) (starting point for medical expenses; charges must be reasonable)
- Adler v. Hospital Service Ass'n of New Orleans, 278 So.2d 177 (La. App. 4th Cir. 1973) (reasonableness of medical fees depends on customary charges in the community)
- Smith v. Pilgrim's Pride Corp., 4 So.3d 983 (La.App. 2 Cir. 2009) (appellate attorney's fees may be awarded under certain circumstances)