265 A.3d 322
Pa.2021Background
- Claimant suffered a work-related left knee injury; treating physician prescribed medications from 2015–2017, which Keystone Rx (a pharmacy) dispensed and billed the insurer.
- Insurer requested utilization review (UR) for treatment after Nov. 2, 2016; the UR concluded the physician’s post‑Nov. 2, 2016 treatment (including the prescriptions) was unreasonable and unnecessary.
- Claimant withdrew his UR‑based petitions pursuant to a Compromise & Release; Keystone Rx then filed fee review applications seeking payment.
- The Department’s Fee Review Section initially awarded Keystone Rx payment; the Bureau’s Hearing Office vacated that decision, holding a non‑treating provider cannot challenge the facial validity of a UR in fee review and dismissing the pharmacy’s applications.
- The Commonwealth Court affirmed the dismissal but added a prospective rule that non‑treating providers (e.g., pharmacies) must receive notice and an opportunity to intervene in future UR proceedings; the Pennsylvania Supreme Court affirmed the dismissal outcome but rejected the Commonwealth Court’s prospective remedy.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Can a non‑treating provider (pharmacy) challenge a UR determination in a fee review? | Pharmacy: UR results bind pharmacies; due process requires ability to contest UR results in fee review. | Insurer/Hearing Office: Act limits UR parties to providers, employers, employees, insurers; non‑treating providers’ remedy is fee review only for amount/timeliness. | Pharmacy cannot use fee review to attack the facial validity of a UR determination; fee review does not substitute for UR. |
| Was the Commonwealth Court permitted to prospectively require notice and a right to intervene for non‑treating providers in URs? | Pharmacy/Commonwealth Court: due process concerns require notice/opportunity to be heard; regulations denying that are deficient. | Insurer/Hearing Office: court usurped legislative authority; adding intervention rights disrupts statutory scheme and separation of powers. | Supreme Court rejected the Commonwealth Court’s prospective rule as judicial overreach and declined to graft notice/intervention requirements onto the Act. |
| Do non‑treating providers have a constitutionally protected property interest in payment at the UR stage? | Pharmacy: has a right/expectation to compensation that merits due process protections at UR. | Insurer/Hearing Office: no property interest until UR finds treatment reasonable/necessary; only an expectancy exists pre‑UR. | No protected property interest exists before UR determines treatment reasonable/necessary; procedural due process is not triggered at UR stage. |
| Does Armour control here or otherwise require protections (e.g., notice) for non‑treating providers when third‑party agreements affect liability? | Pharmacy: relies on Armour to argue parties cannot extinguish pharmacy’s payment rights without notice/opportunity to be heard. | Insurer/Hearing Office: Armour is distinguishable; it involved a post‑UR release between employer and claimant reached outside the UR/fee‑review process. | Supreme Court did not need to decide Armour here; it agreed the instant facts are distinguishable and affirmed dismissal while declining to extend Armour into a prospective intervention rule. |
Key Cases Cited
- Armour Pharmacy v. Bureau of Workers’ Comp. Fee Review Hearing Office, 192 A.3d 304 (Pa. Cmwlth. 2018) (held non‑party releases cannot extinguish payment obligations without notice/opportunity to be heard)
- American Mfrs. Mut. Ins. Co. v. Sullivan, 526 U.S. 40 (1999) (no property interest in payment until UR deems treatment reasonable and necessary)
- Miller v. WCAB (Pavex, Inc.), 918 A.2d 809 (Pa. Cmwlth. 2007) (pre‑UR expectancy of payment distinguished from protected property interest)
- Stilp v. Commonwealth, 905 A.2d 918 (Pa. 2006) (standard for declaring statute unconstitutional; heavy burden on challenger)