UNITED STATES STEEL CORPORATION, Pеtitioner v. WORKERS’ COMPENSATION APPEAL BOARD (LUCZKI), Respondent.
Commonwealth Court of Pennsylvania.
Argued Oct. 19, 2005. Decided Dec. 2, 2005.
887 A.2d 817
Michael A. Johnson, Mt. Pleasant, for respondent.
BEFORE: COLINS, President Judge, and McGINLEY, Judge, PELLEGRINI, Judge, FRIEDMAN, Judge, COHN JUBELIRER, Judge, SIMPSON, Judge, and LEAVITT, Judge.
OPINION BY Judge McGINLEY.
United States Steel Corporation (Employer) petitions for review from an order
Peter Luczki (Claimant) was injured while in the course and scope of his employment on March 2, 2000, when he fell after breaking through a step to a remote crane that Claimant operated. An Agreement for Compensation executed by the parties, dated March 14, 2002, described Claimant‘s injury as a low back strain.
Beginning on June 2, 2000, Claimant began receiving chiropractic treatment from Robert Homonai, D.C. (Dr. Homonai), including intersegmental traction and myofascial releаse. From August 2, 2000, and ongoing, Claimant received treatment from Dr. Homonai two times per month, with more treatment periodically occasioned by temporary flare ups of Claimant‘s symptoms.
On August 29, 2000, Employer filed a Utilization Review (UR) Request pursuant to
Employer timely appealed the WCJ‘s order to the Board, which heard argument on the matter without receiving any additional evidence. By order dated January 5, 2004, the Board affirmed.3 Employer now petitions this Court for rеview of the Board‘s order.4
Employer presents the following issue for review: whether the Board erred as a matter of law when it affirmed the WCJ‘s award of attorney‘s fees for an unreasonable contest. Employer‘s argument is based on the fact that, while Employer did not have a medical opinion on which to base its contest at the time it filed its UR Review Petition, the Act mandates that the Petition be filed within thirty days of Employer‘s receipt of the UR Determination, and the Act does not expressly state that the challenge be based upon medical evidence at the time of filing.
A reasonable contest is established when medical evidence is conflicting or susceptible to contrary inferences, and there is an absence of evidence that an employer‘s contest is frivolous or filed to harass a claimant. Wertz v. Workmen‘s Compensation Appeal Board (Department of Corrections), 683 A.2d 1287 (Pa. Cmwlth. 1996), petition for allowance of appeal denied, 547 Pa. 747, 690 A.2d 1165 (1997). Our Courts have long held that an employer‘s contest of a claim under the Act is not reasonable, and that a claimant is entitled to an award of counsel fees under
Employer correctly notes that the General Assembly has provided a narrow thirty day window of
It is axiomatic that under
Employer also presents a related statutory construction argument, asserting that
This Court must reject Employer‘s argument, noting that an appeal from an adverse UR Determination is not the exclusive “choice” for an employer‘s review of a claimant‘s treatment. Employer‘s argument ignores the fact that the UR Determination itself is a review of that treatment, a “choice” available to any employer (and a choice made by this Employer), regardless of the employer‘s lack of any medical evidence to support the challenge. It is only when an employer disagrees with that initial impartial UR Determination and elects to further challengе that the issue of a reasonable basis comes into play under
Clearly,
However, Employer fails to recognize that this exclusive first step in challenging a claimant‘s treatment carries no evidentiary requirements whatsoever on an employer‘s part, and that no contest оf a claimant‘s treatment may be found to be unreasonable in this first instance of third party review under
Unlike the first step, an appeal from an initial UR Determination under
Simply put,
This Court has consistently held that a reasonable contest is one which is prompted by a genuinely disputed issue, which genuine dispute can be found where the medical evidence is conflicting or susceptible to contrary inferences. LaChina v. Workmen‘s Compensation Appeal Board (Dana Corp.), 664 A.2d 204 (Pa. Cmwlth. 1995). For an employer to establish that its contest is reasonable, it must have in its possession at the time of the decision to contest, or shortly thereafter, medical evidence supporting that position. Id. at 206, citing Yeagle, 630 A.2d at 560. See Boyer v. Workers’ Compensation Appeal Board (First Capital Insulation, Inc.), 740 A.2d 294 (Pa. Cmwlth. 1999) (unreasonable contest where employer had no medical evidence at the time employer chose to contest its liability; post hoc medical examination did not cure this defect); Lewistown Hospital v. Workmen‘s Compensation Appeal Board (Kuhns), 683 A.2d 702 (Pa. Cmwlth. 1996) (award of attorneys’ fees for unreasonable contest depends upon whether contest was prompted to resolve a genuinely disputed issue) (emphasis added); Jones & Laughlin (after-acquired medical evidence did not convert an unreasonably initiated contest into a reasonable one).
Jones & Laughlin, and its progeny, have long established that the pursuit of a сlaim by an employer, contesting liability under the Act, is not reasonable where the employer lacks a scintilla of medical evidence to support its contest, until after the contest is initiated. This Court has determined that an employer‘s sole reliance on such after-acquired medical evidence establishes that the pursuit of such a contest “was already a fait accompli” before any such medical basis existed, and clearly establishes that the contest was not brought “for the resolution of any generally disputed liability” as required under Section 440(a). Jones & Laughlin, 500 A.2d at 495. While Jones & Laughlin, and other precedent, addressed contests other than those involving UR procedures, applying the rule to UR contests clearly conforms with Section 440(a)‘s mandate, and with the Act‘s purposes.
To allow after-acquired medical opinions to justify an employer‘s contest would allow the decision to deny compensation to be based not on what a medical opinion is, but on the hope that some kind of medical evidence can be elicited prior to hearing.
Here, what might have begun as a reasonable contest became unreasonable ... once [employer] continued to contest the claim without any factual basis in the hope that it could later find a medical witness who would provide it with the testimony to rebut [c]laimant‘s proof.
As in Yeagle, Employer‘s initial “contest” here was reasonable—an employer always is entitled to challenge the reasonableness and necessity of a claimant‘s treatment without any evidentiary basis under
As generally stated, this “reasonable basis” precedent indeed applies to an employer‘s continued contest of the reasonableness and necessity of treatment where an employer challenges a UR Determination without any evidentiary basis. A reasonable contest must be prompted by a genuine dispute, one based upon medical evidеnce that supports a contest, and possessed by Employer at the time the choice is made to file the UR Review Petition. LaChina; Yeagle; Jones & Laughlin.7
We believe that the report of the reviewer established reasonable evidence for Employer [Hospital] to contest liability. (citation omitted and emphasis added).
As in Bolinsky, this Employer challenges Claimant‘s medical treatments and alleged that they were not reasonable and necessary. Unlike in Bolinsky, here, Louis Camilli, D.C., the reviewer determined that Claimant‘s treatments were in fact necessary and reasonable, quite the opposite of Bolinsky.
Also, Snizaski v. Workers’ Compensation Appeal Board (Rox Coal Co.), 847 A.2d 139 (Pa. Cmwlth. 2004), is distinguishable from the present controversy. In Snizaski, Renee Snizaski (Snizaski) filed a penalty petition against Rox Coal Company (Rox) and alleged that Rox failed to pay her compensation benefits within thirty days after the award pursuant to
On appeal, Snizaski argued that “the filing of an appeal and a request for supersedeas is not sufficient to suspend Employer‘s [Rox] obligation under the Act ... where an employer does not pay an award within 30 days of the date on which its obligation to pay arose....” Id. at 141. This Court rejected Snizaski‘s argument and affirmed the board:
In Candito [v. Workers’ Compensation Appeal Board (City of Philadelphia), 785 A.2d 1106 (Pa. Cmwlth. 2001)], we addressed whether penalties should be imposed while an employer‘s request for supersedeas was pending, albeit before this Court. At issue in that case was whether it was an abuse of discretion not to award penalties where payment was not made with the 30-day time period when the Board had denied the supersedeas request but then this Court had ultimately granted it. In holding that it was not an abuse of discretion ... [w]e stated that, “[t]o hold that an employer is liable for penalties for not paying compensation when its request for supersedeas is pending is, in effect, to make an employer‘s right to seek a supersedeas in most instances a nullity.” Candito, 785 A.2d at 1110....
In accord with Candito ... (b)ecause the Board‘s own regulations provided that Employer‘s obligation to pay was, in effect, stayed, it was an abuse of discretion for the WCJ to award penalties for the period during which the supersedеas was being processed. (footnote omitted).
Unlike here, Snizaski, dealt solely with the Board‘s regulations concerning the filing of a supersedeas which is a separate petition filed from the appeal and “accompanied” with a WCJ‘s decision or order and opinion of the Board “from which the supersedeas is requested.” See
6. Other relevant information for the Board‘s consideration in determining whether the supersedeas request meets the following standards:
(i) The petitioner makes a strong showing that it is likely to prevail on the merits.
(ii) The petitioner shows that, without the requested relief, it will suffer irreparable injury.
(iii) The issuance of the stay will not substantially harm other interested parties in the proceeding.
(iv) The issuance of a stay will not substantially harm other interested parties.
This Court‘s holding in Snizaski, that the WCJ abused his discretion when he awarded penalties against an employer who had complied with the requirements for a petition for supersedeas, has no bearing on the present controversy which concerns Employer‘s burden to establish facts sufficient to prove a reasonable basis for the contest. See
What must be remembered is that [Employer] invoked the utilization review process, apparently without any back-up evidence to contest the reasonableness or necessity of Claimant‘s treatment. When this process failed to give [Employer] the UR Determination it was hoping for, it continued the process by filing a UR Determination [Review Petition] again withоut supporting evidence in hand. Consequently, it assumed the risk of attorney‘s fees if the [WCJ] ultimately rejected its later-acquired medical evidence.
We reject [Employer‘s] alternative argument that Claimant‘s failure to attend an [IME], scheduled within the statutory 30 day window for seeking review of the UR Determination, somehow excuses its lack of medical evidence to support its filing of a UR [Review] Petition. First, [Employer] fails to substantiate its argument with legal authority. Second, [Employer] started the whole utilization review process without supporting medical evidence, and cannot simply shift the blame onto Claimant when it is unable to have an IME completed within 30 days of receiving an adverse UR Determination. Third, nothing in the Act required [Employer] to have an IME to establish a reasonable contest. A medical opinion based on a records review probably would have sufficed.
Board Opinion at 5. This Court agrees with the Board.
There are two dispositive and distinctive reasons for requiring a mеdical opinion to establish a reasonable challenge. First, Claimant began the treatment at issue on June 2, 2000. Employer chose not to pursue any medical opinion whatsoever as to the reasonableness and/or necessity of that treatment at any time prior to Employer‘s receipt of the adverse UR Determination, on October 4, 2000. Following Employer‘s receipt of the UR Determination, Employer began its first and only pursuit of medical evidence to support its challenge. That pursuit did not yield a medical opinion supporting its contest until February 15, 2001. Notwithstanding the WCJ‘s failure to make any findings regarding which party was responsible for the delay in the execution of the IME, Employer chose to initially invoke the UR process, chose not to pursue supporting medical evidence, and continued not to pursue such evidence during the UR Determination process, despite its medically unsupported challenge to the reasonableness of Claimant‘s treatment. While it was Employer‘s right under the Act to invoke the initial UR process without any medical evidence, the foregoing analysis of the Act and caselaw make clear that Employer‘s decision to continue the contest in the absence of any medical evidence was unreasonable.8
Second, this Court agrees with the Board that nothing in the Act or our precedent may be construed to require an IME as the sole sufficient medical evidentiary basis for a continuing challenge to the reasonableness of the treatment. As not-
Contrary to Employer‘s assertion, Claimant had no control over when Employer would pursue a medical opinion on the reasonableness and necessity of Claimant‘s treatment. Employer chose not to obtain any medical evidence until well after it challenged Claimant‘s treatment, via the initial UR request and Employer‘s subsequent UR Review Petition. Particularly where the UR Determination itself was an independent, objective medical opinion provided to Employer at its request, which provided no basis for a continuation of Employer‘s contest, Employer still chose to proceed.
Finally, this Court must address Clаimant‘s request for attorney‘s fees for its defense of the present appeal by Employer pursuant to
Accordingly, this Court affirms.
ORDER
AND NOW, this 2nd day of December, 2005, the order of the Workers’ Compensation Appeal Board in the above-captioned matter is affirmed.
DISSENTING OPINION BY Judge LEAVITT.
Respectfully, I dissent. In this case of first impression, the Court holds that an employer can be required to pay attorney fees if the employer fails to prove that a course of medical treatment is not reasonable or necessary. I do not believe the Generаl Assembly has authorized the payment of such fees anywhere in the
In this case, Employer challenged an ongoing course of chiropractic treatment for Claimant‘s low back strain. Consistent with the Act, Employer sought a utilization review from a licensed URO, which assigned the matter to a review by Louis Camilli, D.C., another chiropractor. Dr. Camilli determined that Claimant‘s chiro-
The Act includes several measures designed to resolve workers’ compensation claims promptly and fairly. For example, a WCJ may impose penalties upon an employer who violates the Act. See
Utilization review was established as part of a legislative program intended to control the medical costs associated with workers’ compensation. To that end,
Utilization review is narrow in scope. It pertains to a provider‘s course of treatment, and it has no impact on the claimant‘s award for medical benefits.3 Utilization review is available only where the employer‘s liability for a claimant‘s medical treatment has already been established; its purpose is to permit oversight of the treatment of an injury. Utilization review may be initiated by an employer, provider or an employee. The challenge is initiated by requesting review from a URO, which is a private organization licensed by the Commonwealth; the URO then assigns the request to a provider who specializes in the same medical specialty as the provider being reviewed. Notably, the cost of the URO must be borne by the employer, even when the review is sought by the employee. Any person affected by the URO‘s determination, including a provider, may appeal to a WCJ and must do so promptly, i.e., within 30 days of receiving the URO determination.4
The majority believes that Employer‘s contest was unreasonable because it did not obtain the opinion of Dr. Carothers before appealing Dr. Camilli‘s determination. Apart from the fact that it is unreasonable to expect that Employer could have done so within 30 days, attorney fees are not authorized.
Section 440(a) does not cover appeals of URO determinations. First, Section 440(a) does not identify a utilization review petition as one of the petitions that can trigger an award of costs, including attorney fees. Second, Section 440(a) authorizes an award of costs to “an employee or dependent,” but not to a “provider,” in spite of the fact that the provider can be the party adverse to an employer in a utilization review petition. This omission of providers also supports the inference that Section 440(a) does not apply to utilization review controversies. Stated otherwise, by its plain terms, Section 440(a) applies only to petitions that relate to compensation awards and not to utilization review petitions.
If the legislature had intended to authorize an award of costs in a URO appeal, it would have so stated in
In short, unlike the majority, I believe the Act does not authorize an award of attorney fees in the case of a utilization review.
As noted by the majority, this Court has held on numerous occasions that where an employer‘s contest is based upon an expert medical opinion that was acquired after a contest is initiated, the contest will be found unreasonable, at least up to the point the opinion was obtained. Jones & Laughlin Steel Corp. v. Workmen‘s Compensation Appeal Board (White), 92 Pa. Cmwlth. 318, 500 A.2d 494 (1985). There are several reasons why the Jones & Laughlin principle should not be applied in the case of an appeal of a URO determination.
First, the risk of a frivolous URO appeal is low. It is the employer‘s burden to show at the hearing before the WCJ that medical treatment is neither reаsonable nor necessary. This burden is not likely to be met without presenting expert testimony; accordingly, when an employer appeals to a WCJ, it does so knowing that it must incur the expense of an expert. It seems unlikely that employers will incur this cost lightly, when, after all, the matter at issue is not an entire compensation award but a provider‘s treatment. In other words, the cost of litigation is high relative to a successful outcome, i.e., relief from liability for a provider‘s treatment.
Second, the time constraints for a URO review are tight. An employer, insurer, provider or employee has thirty days to appeal an adverse determination of a URO.8 This is too short a period of time in which to obtain an expert opinion on the merits of a URO determination. To issue an ipse dixit rule that it is unreasonable for an employer to seek review without first having an expert opinion in hand has
Jones & Laughlin established a judge-made rule that a contest to an award of medical benefits is per se unreasonable unless a medical opinion is obtained prior to initiating this contest. The rule does not fit into the utilization review scheme.10 The time limits and risks involved in utilization review are completely different from those involved in a contest over an award of compensation. Accordingly, even if
Provider oversight is an important aspect to cost containment, and this goal is not advanced by encumbering utilization review with redundant medical opinions. Because
Accordingly, I would reverse.
Judge COHN JUBELIRER joins in this dissent.
Notes
Act of June 2, 1915, P.L. 736, as amended. Section 306(f.1)(6) of the Act provides:
The WCJ stated in her opinion that “[t]he Utilization Review Petition was assigned to this [WCJ] on March 2, 2000.” WCJ Opinion at 1. The certified record indicates that the date of assignment was December 1, 2000.(6) Except in those cases in which a workers’ compensation judge asks for an opinion from peer review under section 420, disputes as to reasonableness or necessity of treatment by a health care provider shall be resolved in accordance with the following provisions:
(i) The reasonableness or necessity of all treatment provided by a health care provider under this аct may be subject to prospective, concurrent or retrospective utilization review at the request of an employe, employer or insurer. The department shall authorize utilization review organizations to perform utilization review under this act. Utilization review of all treatment rendered by a health care provider shall be performed by a provider licensed in the same profession and having the same or similar specialty as that of the provider of the treatment under review. Organizations not authorized by the department may not engage in such utilization review.
(ii) The utilization review organization shall issue a written report of its findings and conclusions within thirty (30) days of a request.
(iii) The employer or the insurer shall pay the cost of the utilization review.
(iv) If the provider, employer, employe or insurer disagrees with the finding of the utilization review organization, a petition for review by the department must be filed within thirty (30) days after receipt of the report. The department shall assign the petition to a workers’ compensation judge for a hearing or for an informal conference under section 402.1. The utilization review report shall be part of the record before the workers’ compensation judge. The workers’ compensation judge shall consider the utilization review report as evidence but shall not be bound by the report.
Section 440(a) states in full:
(a) In any contested case where the insurer has contested liability in whole or in part, including contested cases involving petitions to terminate, reinstate, increase, reduce or otherwise modify compensation awards, agreements or other payment arrangements or to set aside final receipts, the employe or his dependent, as the case may be, in whose favor the matter at issue has been finally determined in whole or in part shall be awarded, in addition to the award for compensation, a reasonable sum for costs incurred for attorney‘s fee, witnesses, necessary medical examination, and the value of unreimbursed lost time to attend the proceedings: Provided, That costs for attorney fees may be excluded when a reasonable basis for the contest has been established by the employer or the insurer.
It states:
(7) A provider shall not hold an employe liable for costs relаted to care or service rendered in connection with a compensable injury under this act. A provider shall not bill or otherwise attempt to recover from the employe the difference between the provider‘s charge and the amount paid by the employer or the insurer.
Employer cites Bolinsky v. Workers’ Compensation Appeal Board (Norristown State Hospital), 814 A.2d 833 (Pa. Cmwlth.), petition for allowance of appeal denied, 575 Pa. 688, 834 A.2d 1144 (2003), for the proposition that penalties or attorney fees may not be awarded against an employer where it simply followed the exclusive procedure under the Act to challenge the reasonableness and necessity of Claimant‘s treatment.
In Bolinsky, Rita Bolinski (Bolinski) had received total disability benefits since 1978. On July 22, 1997, Norristown State Hospital (Hospital) requested a utilization review and challenged the reasonableness and necessity of Bolinski‘s physical therapy. Peter Grabaskas, P.T (Reviewer) “determined that the treatment provided ... could not be considered appropriate as there was insufficient documentation regarding evaluation, diagnosis and prognosis” and as a result the treatment was not reasonable and necessary. Id. at 834-35. Bolinski then requested review of the utilization determination. Following a hearing and a remand from the board, the WCJ found that Bolinski “was not entitled to a quantum meruit fee as Employer [Hospital] had presented a reasonable contest.” Id. at 835.
On appeal, this Court affirmed:
Employer [Hospital] ... followed the utilization review process that is its exclusive means of determining whether any medical treatment provided to a claimant under the act was reasonable or necessary.... The reviewer then determined that the physical therapy treatments questioned by Employer were not reasonable and necessary. When Claimant [Bolinski] appealed the ruling to the WCJ, Employer [Hospital] used the report of the reviewer as evidence that the physical therapy treatments were not reasonable and necessary.
It states:
(iii) The employer or the insurer shall pay the cost of the utilization review.
Rule 2744 provides:
The majority observes that utilization review involves a two-step process: (1) a utilization review request, which leads to a URO determination, and (2) an appeal from the URO determination to a WCJ. The majority stresses that an employer can avail itself of the first “step” without presenting (or even having) medical evidence. Consequently, if an employer proceeds to the second “stеp,” which the majority characterizes as a “contest,” the employer must have an evidentiary basis for doing so. I am not persuaded by this attempt to put the cart before the horse. An employer‘s initial utilization review request may be based on little more than suspicions that a claimant‘s medical treatment is no longer reasonable or necessary. At this preliminary stage of the utilization review process, the employer is still assessing its position and would have no reason to incur the expense of deposing an expert until after the determination is rendered.Further Costs. Counsel Fees. Damages for Delay.
In addition to other costs allowable by general rule оr Act of Assembly, an appellate court may award as further costs damages as may be just, including
(1) a reasonable counsel fee and
(2) damages for delay at the rate of 6% per annum in addition to legal interest, if it determines that an appeal is frivolous or taken solely for delay or that the conduct of the participant against whom costs are to be imposed is dilatory, obdurate or vexatious. The appellate court may remand the case to the trial court to determine the amount of damages authorized by this rule.