KEYSTONE RX LLC, v. BUREAU OF WORKERS’ COMPENSATION FEE REVIEW HEARING OFFICE (COMPSERVICES INC./AMERIHEALTH CASUALTY SERVICES)
No. 27 EAP 2020, No. 28 EAP 2020
IN THE SUPREME COURT OF PENNSYLVANIA EASTERN DISTRICT
December 22, 2021
[J-18A-2021 and J-18B-2021] BAER, C.J., SAYLOR, TODD, DONOHUE, DOUGHERTY, WECHT, MUNDY, JJ. ARGUED: April 13, 2021
CHIEF JUSTICE BAER
[J-18A-2021 and J-18B-2021]
APPEAL OF: COMPSERVICES/AMERIHEALTH CASUALTY SERVICES
Appeal from the order of Commonwealth Court entered on December 12, 2019 at No. 1369 CD 2018 (reargument denied on January 30, 2020) affirming the Order entered on September 12, 2018 by the Bureau of Workers’ Compensation at No. DSP-7388753-4.
APPEAL OF: BUREAU OF WORKERS’ COMPENSATION FEE REVIEW HEARING OFFICE
Appeal from the order of Commonwealth Court entered on December 12, 2019 at No. 1369 CD 2018 (reargument denied on January 30, 2020) affirming the Order entered on September 12, 2018 by the Bureau of Workers’ Compensation at No. DSP-7388753-4.
OPINION
CHIEF JUSTICE BAER
In this workers’ compensation matter, the Bureau of Workers’ Compensation Fee Review Hearing Office (“Hearing Office“) concluded that, in the fee review setting, a non-treating
By way of a statutory background,
If a treating “provider, employer, employe or insurer” disagrees with the result of the UR, a petition for review must be filed. See
Insurer filed a UR request in 2017 regarding medical treatment, including medications prescribed by Physician and dispensed by Pharmacy, that Shaw received after November 2, 2016. Because Pharmacy was not a treating provider for purposes of the UR procedures of the Act, it was not a party to the UR process. The result of the UR was a determination that all treatment rendered by Physician after November 2, 2016, including the prescribed medications that Pharmacy dispensed to Claimant, was unreasonable and unnecessary because it was unrelated to Claimant‘s workplace injury. Claimant filed two petitions to review the UR determination, but those petitions were later withdrawn pursuant to a Compromise and Release (“C&R“) Agreement that resolved Claimant‘s then-pending claims but left open whether he could receive future medical coverage for his workplace injury. This outcome meant that Insurer was not required to pay Pharmacy under the Act for the aforementioned medications that Pharmacy provided to Claimant.
Pharmacy then filed the two applications for fee review that are at issue in this appeal. The Medical Fee Review Section of the Department of Labor and Industry (“Fee Review Section“) held a hearing on the applications, after which it concluded that Insurer owed Pharmacy over $4,000 for providing Claimant the medications at issue in this case. Insurer sought and was granted a hearing to contest this conclusion, as it believed that any need for these medications was unrelated to Claimant‘s work injury because the medications were found to be unreasonable and unnecessary for treatment of Claimant‘s work-related injury during the UR process.
After a hearing, Hearing Office ruled in favor of Insurer by vacating the previously entered administrative determinations and dismissing Pharmacy‘s applications for fee review. The Hearing Office concluded that
Pharmacy then filed a petition for review in the Commonwealth Court, where Pharmacy relied upon Armour for the proposition that non-treating providers are entitled to payment from a workers’ compensation carrier for prescriptions issued at the request of a treating provider unless that entitlement is removed by a procedure, such as UR, that provides it due process protections. Pharmacy argued that pursuant to Armour, its due process rights were violated because the Act does not allow non-treating providers to participate in the UR process, even though UR determinations are binding on them.
Because the Commonwealth Court‘s decision in this matter requires an understanding of that court‘s opinion in Armour, we pause to summarize that decision. In Armour, an employer was required to provide medical treatment pursuant to the Act for its employee‘s work-related injury. A physician prescribed medication to treat the injury, and a pharmacy dispensed the medication; however, the employer refused to pay the pharmacy for the medication and requested UR, claiming that the medication prescribed by the physician was not necessary to treat the employee‘s work-related injury. At the conclusion of the UR, the medication was found to be reasonable and necessary to treat the employee‘s injury. Subsequently, because the employer continued to fail to pay for the treatment, the pharmacy that dispensed the medication filed a fee review application, seeking payment from the employer for the medication.
The Fee Review Section concluded that, based on the UR determination, the employer was required to pay the pharmacy for the medication. Thereafter, the employer requested a hearing with the Hearing Office to contest that determination. After the employer sought this review, the employer and the claimant entered into negotiations outside of the UR and fee review processes, leading to their execution of a release agreement that explicitly relieved the employer of any liability for the prescription. The employer then pursued its challenge to the Fee Review Section‘s determination, arguing to the Hearing Office that the release agreement between it and the claimant should control whether it owed the pharmacy for the medication. The Hearing Office agreed with the employer and vacated the Fee Review Section‘s determination.
The pharmacy appealed to the Commonwealth Court, contending that its due process rights were violated because it was deprived of its right to payment based on an agreement: (1) releasing the employer of its obligations imposed during the UR and fee review proceedings; (2) that was reached outside of the UR and fee review proceedings; (3) and to which the pharmacy was not a party. The Commonwealth
Turning back to the instant matter, in a published opinion, the Commonwealth Court affirmed the Hearing Office‘s order, holding that Pharmacy was not entitled to payment. Keystone Rx, supra. In so doing, the court reasoned that Armour was distinguishable from the present matter. The court emphasized that, unlike the instant case, Armour was based on an agreement between the employer and claimant that was created outside of the UR and fee review processes. Further, the intermediate court noted that the result of the UR proceeding in Armour was a determination that the treatment received by the claimant was reasonable and necessary; whereas here, a determination was made that the treatment was unreasonable and unnecessary.
Consistent with this reasoning, the court concluded that, because the UR resulted in a determination that the medications prescribed by Physician were unreasonable and unnecessary, the Hearing Office correctly concluded that it could not address in the fee review setting Pharmacy‘s attack on “the facial validity of the UR process[.]” Keystone Rx, 223 A.3d at 299. The court, however, did not end its analysis there.
Instead, the Commonwealth Court then purported to “acknowledge that there are due process issues for [non-treating] providers such as Pharmacy that are precluded from participating in the UR process but nonetheless are bound by the results that follow them to the fee review process at issue herein.” Id. Based upon its assessment that “the polestar of Armour [] is that the Act must be construed in accordance with due process of law[,]” the court further held that “for UR procedures occurring after the date of this opinion where an employer, insurer, or an employee requests UR, a provider which is not a ‘health care provider’ as defined in the Act, such as a pharmacy, testing facility or provider of medical supplies, must be afforded notice and an opportunity to establish a right to intervene under the usual standards for allowing intervention.” Id.
Insurer sought reargument with the Commonwealth Court, and the court denied the request. Insurer then filed in this Court a petition for allowance of appeal, which we granted, limited to the following questions as phrased by Insurer:
(1) Did the Commonwealth Court exceed the scope of its authority and substitute its judgment for that of the Pennsylvania Legislature when it promulgated a new rule which mandates non-healthcare providers are entities with standing and the right to intervene in the Workers’ Compensation Act‘s Utilization Review process?
(2) Did the Commonwealth Court err when it gave non-healthcare providers via the right to void at any time, a Utilization Review Determination regarding the reasonableness and necessity
of the care of the physician who wrote the prescription which led to the non-healthcare provider providing a good or service to the injured worker?
Keystone Rx LLC v. Bureau of Workers’ Comp. Fee Review Hearing Office, 238 A.3d 338, 339 (Pa. 2020). Hearing Office also sought allowance of appeal, which we granted to address the following issue, as phrased by Hearing Office:
Whether the Commonwealth Court violated the separation of powers doctrine by engrafting a new requirement onto the Pennsylvania Workers’ Compensation Act‘s process for conducting utilization review of treatment by a health care provider by prospectively directing that non-treating entities be given notice and an opportunity to intervene in utilization reviews?
Notably, the Commonwealth Court‘s unconventional, prospective holding raises a number of potential questions, as evidenced by the above-quoted issues and the parties’ various arguments to this Court. To provide a concise analysis regarding the propriety of the Commonwealth Court‘s reasoning, we find it necessary to characterize the nature of the court‘s ruling. It appears that, for all intents and purposes, the Commonwealth Court deemed the Act unconstitutional insomuch as it allegedly deprives non-treating providers of due process in UR proceedings. To remedy this perceived infirmity, the court engrafted onto the Act a requirement that non-treating providers must receive notice of and an opportunity to intervene in UR proceedings. We, therefore, will summarize the parties’ arguments that align with this understanding of the Commonwealth Court‘s holding.4
Insurer highlights that the Act is an administrative scheme that the Legislature promulgated for the purposes of providing compensation for employees who are injured in the course of their employment and effectuating a workable cost containment system. Insurer maintains that guaranteeing that non-treating providers, such as pharmacies, are paid for filling prescriptions and similar actions does not further either of those purposes. Indeed, Insurer contends that the Act clearly limits non-treating providers who are concerned about payments to fee review proceedings where they may dispute only the “amount or timeliness of the payment from the employer or insurer.”
In addition, Insurer insists that the manner in which the Commonwealth Court decided this case exemplifies that court‘s recent (alleged) distortion of the Act and its purpose. Specific to this appeal, Insurer contends that the due-process-based rule announced by the court upends 20 years of settled understanding of the function of URs. Insurer warns that, because the court‘s newly-minted rule entitles non-treating providers to notice and an opportunity to intervene in URs, it necessarily follows that any UR performed without such a providers’ participation could be deemed invalid. In Insurer‘s view, the Commonwealth Court‘s ruling poses serious threats to the stability of the workers’ compensation system. For these reasons, Insurer asks the Court to disavow the
Along the same lines as Insurer‘s argument, Hearing Office contends that the Legislature created the UR process for the purpose of determining whether a particular medical treatment was reasonable and necessary and that the Legislature deliberately excluded non-treating providers from URs because they do not make any treatment decisions. Hearing Office suggests that the Commonwealth Court strayed from this straightforward reading of the Act and improperly usurped the role of the Legislature in reaching its prospective holding. Hearing Office reminds us that this Court recently reiterated the settled concept that “[i]t is axiomatic that [courts] may not add statutory language where [they] find the extant language somehow lacking[.]”5 Hearing Office‘s Brief at 14 (quoting Sivick v. State Ethics Comm‘n, 238 A.3d 1250, 1264 (Pa. 2020)).
Of significant importance to this appeal, Hearing Office avers that non-treating providers have no recognized property interest as of the time of a UR proceeding because “there is no property interest in payment of the disputed bill before there is a determination that the medical bills are reasonable and necessary.” Id. at 19 (citing American Manufacturers Mutual Ins. v. Sullivan, 526 U.S. 40, 60 (1999)). In this regard, Hearing Office highlights the High Court‘s holding in Sullivan that the Pennsylvania workers’ compensation claimants in that case lacked a property interest that would implicate due process until UR proceedings were completed and resulted in a determination that the treatment at issue was reasonable and necessary.
Hearing Office argues that rather than a property interest, Pharmacy has a “mere expectation” of payment until a UR proceeding results in a determination that a given medical treatment is reasonable and necessary. Id. at 19 (quoting Miller v. WCAB (Pavex, Inc.), 918 A.2d 809, 812 (Pa. Cmwlth. 2007)). Accordingly, Hearing Office reasons, Pharmacy has not set forth a viable due process claim, and the Commonwealth Court, therefore, violated key separation of powers principles by adding notice and right to intervene elements to the Act for non-treating providers.6
Responding to Insurer‘s arguments, Pharmacy continually refers to its “right to compensation” at the UR phase of
Regarding Hearing Office‘s issue and arguments, Pharmacy observes that non-treating providers have no role in UR proceedings; yet, their right to compensation is entirely dependent on whether the prescriptions they fill are deemed reasonable and necessary during UR proceedings. Pharmacy maintains that because it has an interest in receiving payment for its services, where the UR regulations authorize review of services of non-treating providers, UR regulations “must also allow those non-treating providers to have notice and a right to participate, just as they do for treatment provided by a healthcare provider.” Pharmacy‘s Brief at 31. Pharmacy argues that the UR regulations are constitutionally repugnant for violating due process, and thus, the Commonwealth Court did not violate separation of powers principles by interpreting the Act in a way that vindicates non-treating providers’ right to due process.
Regarding the United States Supreme Court‘s holding in Sullivan, Pharmacy suggests that Sullivan concerned the due process rights of treating providers, who are clearly part of UR proceedings. Pharmacy emphasizes that it had no right to participate in UR proceedings, distinguishing this case from Sullivan. For these reasons, Pharmacy believes that this Court should uphold the Commonwealth Court‘s decision.
To the extent that the Commonwealth Court deemed the Act to be unconstitutional, we note that every piece of legislation passed by the General Assembly enjoys the strong presumption that it is constitutional. Pennsylvania State Ass‘n of Jury Comm‘rs v. Com., 64 A.3d 611, 618 (Pa. 2013). Thus, “a party challenging the constitutionality of a statute bears a very heavy burden of persuasion.” Stilp v. Com., 905 A.2d 918, 939 (Pa. 2006). Indeed, a court will not deem a legislative enactment unconstitutional unless it clearly, palpably, and plainly violates the Constitution. Id. “If there is any doubt that a challenger has failed to reach this high burden, then that doubt must be resolved in favor of finding the statute constitutional.” Pennsylvania State Ass‘n of Jury Comm‘rs, 64 A.3d at 618.
The
In so doing, we first observe that the Act clearly and unambiguously provides that employers and insurers are obligated to pay providers, such as Pharmacy, for reasonable and necessary treatment or services connected to claimants’ work-related injuries.
Thus, when a non-treating provider bills an insurer and the insurer invokes the UR process, the non-treating provider is not entitled to payment under the Act. Further, if the UR results in a determination that the treatment at issue is unreasonable or unnecessary, the employer and insurer are not liable under the Act to pay for the treatment. See Sullivan, 526 U.S. at 60 (citing, inter alia,
Accordingly, when, as here, an insurer successfully challenges a treatment, the Act makes clear that a non-treating provider does not have a constitutionally-protected property interest in goods or services that it dispensed, as these providers were never entitled to payment under the Act; rather, they simply have an expectation of payment in the normal course. Absent a constitutionally protected property interest, there is no viable due process claim. Thus, the Commonwealth Court erred by concluding that the Act improperly fails to account for the due process rights of non-treating providers in UR proceedings and by engrafting onto the Act a requirement that non-treating providers receive notice of and an opportunity to intervene in UR proceedings. We, therefore, reject that portion of the court‘s opinion but otherwise affirm the court‘s order.10
Justices Saylor, Todd, Donohue, Dougherty, Wecht and Mundy join the opinion.
Justice Wecht files a concurring opinion in which Justice Dougherty joins.
[J-18A-2021 and J-18B-2021] - 16
