138 A.3d 133
Pa. Commw. Ct.2016Background
- Claimant arrived at Geisinger (Provider) with a 2x4 lodged near his left orbit after a workplace injury and received Level I trauma care (May 5–7, 2014), including CT imaging and eyelid reconstruction.
- Provider billed its usual and customary (actual) charges for transport and the full course of acute trauma care and sought 100% reimbursement of those billed charges from the State Workers’ Insurance Fund (Insurer).
- Insurer repriced Provider’s billed charges using a usual-and-customary database (relying on a Department statement adopting the 85th percentile of certain MDR/FAIR Health data) and reimbursed at the database-based amount.
- Medical Fee Review initially ordered reimbursement at 100% of Provider’s billed charges; Insurer contested and submitted deposition testimony from a repricing manager about use of the database.
- The Fee Review Hearing Officer concluded reimbursement should be 100% of the usual-and-customary charge as defined by the regulations (i.e., the charge most often made by similarly situated providers in the geographic area), not 100% of Provider’s actual billed charges, and found Insurer’s payment proper.
- Provider appealed; the Commonwealth Court affirmed, holding the statutory/regulatory definition of "usual and customary charge" governs trauma-care reimbursement and permits database-based repricing where applicable.
Issues
| Issue | Provider's Argument | Insurer's Argument | Held |
|---|---|---|---|
| Whether trauma-center care under 77 P.S. §531(10) requires payment of Provider's actual billed charges ("provider's usual and customary charge") | Provider: §306(f.1)(10) and 34 Pa. Code §127.128(c) entitle Provider to its actual charges for transport and full acute-course trauma care when ACS triage met | Insurer: "usual and customary charge" means the standard defined in Act/regulations (charges most often made by similar providers in the geographic area), so repricing to that standard is permissible | Held: "Usual and customary charge" in §306(f.1)(10) is defined by §109 and 34 Pa. Code §127.3 (charges most often made by similar providers in the geographic area); Insurer’s method was permissible and payment was proper. |
| Whether the regulatory provision equating "provider's usual and customary charge" with the statutory definition can override the statute | Provider: §127.128(c) interprets §306(f.1)(10) to require payment of provider's usual/customary (actual) charge; that should control for trauma cases | Insurer: Regulation must align with statute; where statute’s term is defined elsewhere, that definition controls | Held: A regulation that conflicts with a statute cannot change the statute’s meaning; here the statutory/regulatory definition of "usual and customary charge" controls; no context supports interpreting §306(f.1)(10) to mean billed/actual charges. |
| Whether the Department’s 2010 Statement adopting an MDR/FAIR Health 85th-percentile database can be used to determine "usual and customary charge" for trauma/hospital (Part A) services | Provider: Insurer may not reduce Provider’s billed charges using a repricing database for trauma-center hospital charges | Insurer: Department’s statement and repricing practice support use of the database to determine usual/customary charges where applicable | Held: Court accepted use of the database in this record (not deciding its general validity), but held the statutory definition permits comparison to similar providers in the geographic area; insurer’s repricing here was supported by the Hearing Officer’s findings. |
| Burden to rebut presumption of reasonableness/necessity for trauma triage transport | Provider: Ambulance decision and compliance with ACS triage creates a presumption of reasonableness; absent clear evidence to the contrary, Provider is entitled to usual/customary payment | Insurer: Does not dispute presumption but may still contest appropriate measure of "usual and customary" reimbursement | Held: Presumption of necessity stands (no ACS violation shown), but the dispute concerned the measurement of "usual and customary" — statutory/regulatory definition applies. |
Key Cases Cited
- Pennsylvania Associated Builders & Contractors, Inc. v. Dep’t of Gen. Servs., 932 A.2d 1271 (Pa. 2007) (defined approach to applying statutory definitions in context)
- Volunteer Firemen’s Relief Ass’n of the City of Reading v. Minehart, 227 A.2d 632 (Pa. 1967) (agency regulations cannot override statute)
- Bayada Nurses, Inc. v. Dep’t of Labor & Industry, 958 A.2d 1050 (Pa. Cmwlth. 2008) (rules of statutory construction apply to administrative regulations)
- Roman Catholic Diocese of Allentown v. Bureau of Workers’ Comp., Fee Review Hearing Office, 33 A.3d 691 (Pa. Cmwlth. 2011) (distinguishing issue of entitlement to trauma treatment rates from how "usual and customary" is defined)
- Laundry Owners Mut. Liab. Ins. Ass’n v. Bureau of Workers’ Comp. (UPMC), 853 A.2d 1130 (Pa. Cmwlth. 2004) (discussing interplay of §127.3 and §127.128 with §306(f.1)(10) and fee-cap scheme)