Thinking of denying a medical bill in a Pennsylvania Workers’ Compensation claim for not being “causally related”? Better think twice. A new ruling from the Commonwealth Court of Pennsylvania suggests that denying a medical bill as not being causally-related to a work injury might not be enough to avoid payment responsibility if a subsequent Fee Review Application is filed by a medical provider.
The recently circulated opinion of Workers’ First Pharmacy Services, LLC v. Bureau of Workers’ Compensation Fee Review Hearing Office (Gallagher Bassett Services), 901 C.D. 2018 (Commw. Ct. 2019) represents the latest, in a series of recent opinions from the Commonwealth Court of Pennsylvania, that have not only gradually expanded the scope of the Fee Review process, but have also greatly (and perhaps mistakenly) complicated how Pennsylvania workers’ compensation bills are paid and challenged.
Recall that in Workers First Pharmacy Services, LLC v. Bureau of Workers' Compensation Fee Review Hearing Office (Cincinnati Insurance Co.), the Commonwealth Court ruled that a claimant and insurance carrier could not structure a Compromise & Release Agreement to prevent a medical provider from receiving payment for treatment, where a Fee Review dispute was in the process of being adjudicated. Additionally, in Keystone Rx, LLC v. AmeriHealth (Fee Review Section), 1369 CD. 2018 (Commw. Ct. 2019), the Commonwealth Court outlined new requirements to allow pharmacies and similarly situated providers to participate in Utilization Review litigation as a party.
Now, in its newly issued Workers’ First opinion, the Commonwealth Court has taken up the issue of how employers and insurance carriers can deny medical bills to begin with. In Workers’ First, the defendant accepted liability for a right shoulder injury and subsequently received a bill for a topical pain cream, which the prescribing doctor said should be applied to “the affected area 2-4 times daily.”
Notably absent from the pharmacy’s billing submission for the topical pain cream were any records showing that the cream was prescribed for the accepted work-related right shoulder injury. The defendant denied the bill as not being causally-related to the work injury – specifically stating that the “diagnosis is inconsistent with the procedure” - and the pharmacy filed an Application for Fee Review. After an initial Administrative Determination from the Bureau found that the bill should be paid, an assigned Fee Review Hearing Officer dismissed the Fee Review Application as premature, concluding that the Fee Review setting was not the proper venue to determine issues of causal-relatedness. This would seem to run in accordance with the long-established principle in Pennsylvania Workers’ Compensation that Fee Review Determinations are not designed to address issues of causal-relatedness nor reasonableness and necessity.
Surprisingly, with the Workers’ First opinion issued January 16, 2020, the Commonwealth Court now disagrees with this longstanding principle. The court explained – in what seems to be an incredible change in directive - that if a defendant disputes causal-relatedness for a medical bill it cannot simply deny the bill for not being causally-related, but it must request Utilization Review addressing the bill at issue. Failing to do so, per the new mandate of the Commonwealth Court, would allow the medical provider to seek payment for the bill via Fee Review, even in the face of a “causal-relatedness” denial.
HOW DID WE GET HERE?
The Commonwealth Court’s opinion in Workers’ First runs contrary to both the plain meaning of the Bureau of Workers’ Compensation regulations, as well as well-established prior case law from the Pennsylvania appellate courts.
As noted by the Commonwealth Court in Workers’ First, the Bureau’s regulations require an assigned Utilization Review Organization (“URO”) to determine reasonableness and necessity of treatment, but explicitly prohibit the URO from deciding “[t]he causal relationship between the treatment under review and the employee’s work-related injury.” 34 Pa. Code §127.406(b)(1).
Despite recognizing this rather straightforward standard, the Workers’ First court nonetheless concluded that the employer in Workers’ First was “was obligated to seek Utilization Review upon receipt of Pharmacy’s invoice” if it wanted to challenge the causal relationship of the submitted bill to the accepted work injury.
The court attempts to square this circle by concluding that the language of the applicable Bureau Regulations must mean that Utilization Review is the primary method to determine issues of “causal relationship,” because if a treatment is not work-related it is “a fortiori” not reasonable and necessary. This holding appears to be inconsistent not only with the plain language of the regulation, but also with the Commonwealth Court’s own precedent.
Over twenty years ago in Hoffmaster v. WCAB (Senco Products), 721 A.2d 1152, 1155 (Pa.Commw. Ct. 1998), the Commonwealth Court held that:
UROs have the authority to decide only the reasonableness or necessity of the treatment at issue. 34 Pa.Code § 127.406 (a). They have no jurisdiction, however, over either the causal relationship between the treatment under review and the employee’s work related injury or whether the employee is still disabled. 34 Pa.Code § 127.465 (a).
Hoffmaster v. WCAB at 1155.
Thus, the employer’s filing of a Utilization Review Request in Hoffmaster v. WCAB had no effect on the employer’s denial of payment for medical bills, for not being causally-related to the work injury.
As recently as 2018, the Commonwealth Court restated this principle in Rogele, Inc. v. WCAB (Hall), 198 A.3d 1195 (Pa. Commw. Ct. 2018), holding that “[t]he issue of causation is separate and distinct from the reasonableness and necessity of medical treatment.” The Court further explained that these different issues are to be determined through different processes:
A challenge to particular medical treatment as not being causally-related to a work injury…must be filed directly with a WCJ. A challenge to a particular treatment as being not reasonable or necessary must be pursued through the administrative utilization review procedures.
Rogele, Inc. v. WCAB (Hall) at 1200, quoting Bloom v. W.C.A.B. (Keystone Pretzel Bakery), 677 A.2d 1314 (Pa. Commw. Ct. 1996).
Although the Workers’ First opinion doesn’t address these prior contrary opinions, the court does attempt to buttress its reasoning by citing to a controlling opinion from the Supreme Court of Pennsylvania - Crozer Chester Med. Ctr. v. Dep't of Labor & Indus., Bureau of Workers' Comp., Health Care Servs. Review Div., 610 Pa. 459, 22 A.3d 189, 194 (Pa. 2011).
In Crozer, the defendant accepted liability for a work-related umbilical hernia by issuing a medical-only Notice of Compensation Payable (“NCP”). Following issuance of the NCP, the provider performed an umbilical hernia repair procedure which the defendant refused to pay for, despite the NCP accepting a work-related hernia. The provider in Crozer filed an Application for Fee Review which was dismissed as premature because the defendant had disputed the causal relatedness of the billing. This dismissal of the Fee Review Application was ultimately affirmed by the Supreme Court of Pennsylvania. The Supreme Court explained that acceptance of liability for a work-related injury does not equal acceptance of liability for a specific medical treatment. The Supreme Court explained that even where general liability is accepted, a defendant may still challenge causal-relatedness for a specific treatment:
Notably, where the insurer issues an NCP, the insurer may still contest liability for medical care or for a particular treatment on several grounds. For example, an insurer may seek to modify, suspend, or terminate the NCP, including a claimant's medical benefits, if the incapacity of a claimant has decreased, or temporarily or finally terminated. If the NCP and the insurer's accompanying liability for medical compensation has not been modified or terminated, the insurer may nonetheless question liability for a particular treatment. A common scenario is one in which the insurer questions the "reasonableness or necessity" of a treatment offered for an accepted work-related injury, i.e., whether the treatment is appropriate for the injury. In that event, immediate payment is not required, but the insurer must make a timely request for treatment utilization review. In other instances, the insurer may also question liability for a particular treatment because: the billed treatment is not related to the accepted work-related injury as described by the NCP, the NCP is fraudulent or contains a material misrepresentation or error, or the issue of liability for medical costs is subject to an agreement supplementing or replacing the NCP.
Crozer Chester Med. Ctr. v. Dep't of Labor & Indus., 610 Pa. 459, 468-469, 22 A.3d 189, 195, 2011 Pa. LEXIS 1155, *14-16 (citations omitted).
In Workers’ First, the Commonwealth Court cites this language from Crozer to support its conclusion that defendants may only challenge causal-relatedness for a specific treatment by filing a Modification Petition (to change the scope of the accepted injury) or by requesting Utilization Review:
Here, liability for Claimant’s work injury has been established. As the Supreme Court observed in Crozer, to question liability for the compound cream treatment, Employer could have filed a modification petition to change the scope of the accepted work injury or sought utilization review of the treatment. Employer did neither.
Workers’ First Pharmacy Services, LLC v. Bureau of Workers’ Compensation Fee Review Hearing Office (Gallagher Bassett Services), 901 C.D. 2018 (Commw. Ct. 2019).
However, a close reading of Crozer reveals that the Supreme Court of Pennsylvania had no intention of mandating that the only way to dispute causal-relatedness was to file a modification petition or submit a bill for Utilization Review. How can we be so sure of this? We know this because the defendant in Crozer never filed a modification petition and never submitted the contested bill in their claim for Utilization Review. Just like the defendant in Workers’ First, the defendant in Crozer simply denied the bill as not causally related, and the Supreme Court of Pennsylvania upheld this challenge by affirming the dismissal of the Fee Review Application.
WHAT DOES THIS MEAN?
If no appeal is filed, it is anticipated that the Workers’ First opinion will result in substantial cost increases for Pennsylvania’s employers and workers’ compensation insurance carriers and a significant increase in Utilization Review Requests and subsequent litigation before Pennsylvania Workers’ Compensation Judges.
Prior law and established practice previously directed employers and insurers, who questioned whether a medical bill was causally-related to an accepted work injury, to deny the bill on that basis – “this isn’t causally-related.” This was most often accomplished by a simple and efficient denial letter. This avoided the need for Fee Review and Utilization Review and often helped clear up honest mistakes wherein a bill for a completely unrelated medical treatment was accidentally sent to a claimant’s workers’ compensation carrier.
Examples of this situation are more common than the Commonwealth Court may have anticipated. For example, where there is an accepted injury for an ankle sprain and the workers’ compensation carrier inadvertently receives a bill for asthma medication, a simple denial letter sufficed to keep this bill out of Fee Review and Utilization Review and quickly communicated to the billing provider that they had sent the bill to the wrong place. Now, according to the Commonwealth Court’s new rule, if a workers’ compensation carrier has an open claim for an accepted shoulder strain and receives bills for hearing aids, orthodontic braces, or Viagra, they are compelled to file a Utilization Review Request to preclude a potential adverse Fee Review Determination and payment responsibility for a treatment that clearly has nothing to do with the work injury.
There are tremendous costs which would accompany this possible new standard. Utilization Review requires a healthcare provider of the same specialty as the “provider under review” to perform a thorough records review before issuing a Utilization Review Determination deciding if the treatment is reasonable and necessary (and now “causally-related”). The Act, of course, requires the employer or their workers’ compensation carrier to pay for this process. A cost which could often eclipse the cost of the submitted bill ten times over.
The cost to the workers’ compensation carrier and employer might pale in comparison to the practical burden on the adjudication of workers’ compensation claims in the Commonwealth. How many Petitions for Review of Utilization Review Determination are being litigated in Pennsylvania today? How many might there be if every questionable bill needs to be processed and challenged via Utilization Review?
Although perhaps counterintuitive, this new process could also prove disadvantageous for claimants as well. Often, an improperly denied bill is quickly paid when the oversight is brought to the attention of an adjuster or defense attorney. Even when claimants must resort to Penalty Petitions, quick resolution is often the preference for both sides over lengthy litigation. However, as more and more bills are tied up in Utilization Review, it is claimants who may suffer most, as filing a Utilization Review Request affects an automatic stay of payment for the treatment at issue. Injured workers are unlikely to benefit from a system where a large portion of their medical bills are tied up in stays and litigation of Utilization Reviews.
Of course, given the volume of workers’ compensation medical billing and the costs of requesting Utilization Review, some unrelated medical billing will surely slip through the cracks and go unchallenged. This creates an obvious environment for abuse. While employers, insurance carriers and the Office of Adjudication will no doubt be burdened by the new rule, the court outlines no reasons for medical providers to exercise self-restraint in billing. It costs little to send a bill to a carrier or submit these same bills for Fee Review. Unfortunately, this new rule from the Commonwealth Court may ultimately contribute to an increase in medical fraud and waste, none of which do anything to help the injured worker actually recover from their work injury.
WHAT HAPPENS NEXT?
Be on the lookout for updates. The defendant in Workers’ First will hopefully appeal this opinion.
If no appeal is filed, it is likely that the Bureau will need to issue updated regulations clarifying exactly what is addressed in the Utilization Review process.
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