223 A.3d 295
Pa. Commw. Ct.2019Background
- Claimant injured his left knee in August 2014; treating physician prescribed medications dispensed by Keystone Rx (Pharmacy) in May 2017.
- Insurer requested utilization review (UR) in June 2017; the August 2017 UR found all treatment from November 2, 2016 onward unreasonable and unnecessary.
- Pharmacy filed two fee-review applications (July 2017); the Medical Fee Review Section initially ordered payment for the compound cream and Naprelan tablets.
- Insurer sought a hearing to contest payment; the Fee Review Hearing Office vacated the administrative determinations and dismissed Pharmacy’s applications, relying on the UR finding.
- Pharmacy appealed, arguing due process violations and relying on Armour decisions; the Commonwealth Court affirmed dismissal but announced a prospective rule requiring notice and an opportunity to intervene in future URs for non-"health care provider" vendors (e.g., pharmacies, testing labs, supply providers).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a UR determination that treatment is unreasonable/unnecessary can defeat a pharmacy's fee-review claim when the pharmacy did not participate in UR | Pharmacy: UR outcome cannot deprive it of right to challenge timeliness/amount; Armour I protects provider payment rights and requires due process | Insurer: UR process determines reasonableness/necessity and is binding; fee review is limited to amount/timeliness, not medical necessity | Court: UR determination is controlling for reasonableness; fee review cannot relitigate UR findings; affirmed dismissal |
| Whether Armour I/II require reversal or expand fee-review jurisdiction to adjudicate UR validity or provider status | Pharmacy: Relies on Armour I/II to argue due process and payment entitlement despite UR | Insurer: Armour decisions do not expand fee-review scope beyond amount/timeliness; Hearing Office lacks authority to decide UR merits | Court: Distinguished Armour I (involved C&R and an unappealed favorable UR); Armour II confirmed Hearing Office may decide provider status but does not allow determination of medical necessity; created prospective rule requiring notice/opportunity to intervene in UR for non-health-care providers |
Key Cases Cited
- Armour Pharmacy v. Bureau of Workers' Compensation Fee Review Hearing Office, 192 A.3d 304 (Pa. Cmwlth. 2018) (holds C&R cannot deprive nonparty provider of payment and emphasizes due process protections)
- Armour Pharmacy v. Bureau of Workers' Compensation Fee Review Hearing Office, 206 A.3d 660 (Pa. Cmwlth. 2019) (en banc) (holds Hearing Office may decide provider status but does not expand fee-review power to decide medical necessity; directs holding fee review until UR completes)