Lafayette Bone & Joint Clinic (Charles Morris) v. Louisiana United Business Sif
2016 La. LEXIS 1566
| La. | 2016Background
- Two injured employees (Morris and Poole) were treated at Lafayette Bone & Joint Clinic (LB & J) in 2008; physicians dispensed prepackaged prescription medications in-office and LB & J billed the workers’ compensation payor (LUBA) for those drugs.
- On June 5, 2008 LUBA notified LB & J and its doctors that it would no longer reimburse for physician-dispensed medications and directed claimants to use participating retail pharmacies covered by prescription cards.
- Despite the notice, LB & J dispensed medications on multiple occasions after June 5 and submitted reimbursement requests; LUBA denied payment.
- LB & J and the treating doctors sued in the Office of Workers’ Compensation (OWC) seeking full reimbursement plus penalties and attorney fees. The OWC limited recoverable nonemergency charges to $750 per patient (La. R.S. 23:1142(B)) and denied penalties/fees.
- The appellate court reversed in part: awarded full billed amounts for medications and assessed penalties and attorney fees. The Louisiana Supreme Court granted review.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether choice-of-pharmacy dispute was properly raised in a provider-filed action | LB & J: choice belongs to employee or was otherwise not a bar to recovery | LUBA: payor can choose pharmacy and the issue was relevant | Court declined to address choice-of-pharmacy on the merits because record lacked testimony showing employees had chosen LB & J; refusal to consider was not error |
| Whether LUBA’s prior authorization for office visits included consent to dispense medications at those visits after LUBA’s June 5 letter | LB & J: authorization for treatment encompassed dispensing medications during authorized office visits | LUBA: June 5 letter revoked consent to physician-dispensed medications; authorization for visits did not obligate payment for all possible services provided during a visit | Held: LUBA effectively withdrew consent; dispensing after June 5 without payor consent triggered La. R.S. 23:1142(B)’s $750 cap; appellate court erred to award full billed amounts |
| Whether reasonableness of medication cost is a permissible basis to controvert payment under workers’ comp rules | LB & J: medications were necessary and billed amounts should be paid | LUBA: prepackaged office-dispensed drugs cost 2–8x retail AWP and were unreasonable/unusual; payor reasonably controverted excess cost | Held: factual findings by OWC that office dispensing was more expensive and provided inferior pharmacy services were not manifestly erroneous; payor could consider reasonableness; OWC correctly limited recovery to $750 beyond which consent was required |
| Whether penalties and attorney fees should be awarded for LUBA’s nonpayment | LB & J: LUBA’s denials were unreasonable and penalties/fees warranted | LUBA: denial was reasonable and defensible (cost concerns, litigation posture) | Held: LUBA lacked an objective reason to withhold the undisputed $750 per patient and could have tendered that amount; appellate court correctly awarded penalties and attorney fees; Supreme Court affirmed that portion |
Key Cases Cited
- Downs v. Chateau Living Ctr., 167 So.3d 875 (La. App. 5 Cir. 2015) (discusses payor choice-of-pharmacy authority)
- Bordelon v. Lafayette Consol. Gov’t, 149 So.3d 421 (La. App. 3 Cir. 2014) (addresses employer/payor pharmacy selection)
- Burgess v. Sewerage & Water Bd. of New Orleans, 187 So.3d 49 (La. App. 4 Cir. 2016) (holds choice of pharmacy belongs to employee)
- Rebel Distributors Corp. v. LUBA Workers’ Comp., 144 So.3d 825 (La. 2013) (provider’s right to seek OWC review for disputed physician-dispensed pharmaceuticals)
- Authement v. Shappert Eng’g, 840 So.2d 1181 (La. 2003) (penalty/attorney-fee standard: whether claim was reasonably controverted)
- Church Mut. Ins. Co. v. Dardar, 145 So.3d 271 (La. 2014) (reasonableness and necessity limit employer liability for medical treatment)
- Smith v. Southern Holding, Inc., 839 So.2d 5 (La. 2003) (interpretation of employee selection rights under workers’ compensation statutes)