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OPINION RENDERED: [Date Rendered]

Commonwealth of Kentucky 

Workers’ Compensation Board

 

 

 

OPINION ENTERED:  May 12, 2017

 

 

CLAIM NO. 199300538

 

 

AK STEEL CORP f/k/a                            PETITIONER

ARMCO STEEL CORP

 

 

 

VS.        APPEAL FROM HON. JONATHAN WEATHERBY,

                 ADMINISTRATIVE LAW JUDGE

 

 

 

DONALD COTTLE,

DR MATTHEW WERTHAMMER,

HON. JONATHAN WEATHERBY,

ADMINISTRATIVE LAW JUDGE                      RESPONDENTS

 

 

 

OPINION

AFFIRMING

 

                       * * * * * *

 

 

BEFORE:  ALVEY, Chairman, STIVERS and RECHTER, Members. 

 

RECHTER, Member.  AK Steel Corporation (“AK Steel”) appeals from the October 3, 2016 Medical Fee Opinion and Order and the January 5, 2017 Order on Reconsideration rendered by Hon. Jonathan Weatherby, Administrative Law Judge (“ALJ”).  The ALJ found AK Steel responsible for proposed surgery to treat Daniel Cottle’s (“Cottle”) lumbar spine injury.

          Cottle injured his lumbar spine in an August 4, 1992 work-related accident.  He filed a Form 101, which identified the injury simply as “a herniated disc.”  The parties reached a settlement agreement which was approved on July 22, 1994, and which identified the work injury as “low back.”  Cottle retained his right to medical benefits.  He underwent a discectomy in 1993. 

     Thereafter, Cottle treated with Dr. Matthew Werthammer, who ordered injections and physical therapy which provided some relief.  Eventually, Dr. Werthammer recommended lumbar decompression and “probable” fusion surgery at L3-4 and possibly L4-5.  The workers’ compensation insurance carrier initiated utilization review of the request.  On March 2, 2016, a Final Utilization Review decision was entered denying authorization. 

     Dr. Russell L. Travis conducted the review and recommended the request for surgery be denied.  At the outset of his discussion, he stated, “In my opinion there are several factors that come into play that indicate that surgery is not reasonable, necessary or appropriate for the work injury of 8/3/1992.”  He later concluded any decompression procedure “would be for age-related degenerative changes and not work related.”

          Cottle filed a motion to reopen and medical fee dispute on April 25, 2016.  Proof-taking commenced and the parties waived a hearing.  Ultimately, the ALJ determined AK Steel had failed to file a medical fee dispute in a timely manner following the utilization review decision.  Due to this failure, the ALJ concluded “that this matter must therefore be resolved in favor of the Plaintiff.”  The proposed lumbar surgery was deemed compensable.

     AK Steel filed a petition for reconsideration.  It argued it was not required to initiate a medical fee dispute because the utilization review report denied the proposed treatment on the basis of work-relatedness.  By Order dated January 5, 2017, the ALJ stated the “Petition is denied as moot.”

     AK Steel now appeals, claiming the ALJ erred in determining it failed to file a timely medical fee dispute, and in denying its petition for reconsideration as moot.  At the outset, we note the ALJ incorrectly stated in the October 3, 2016 Opinion that “the Defendant Employer”, i.e. AK Steel, had initiated the medical fee dispute.  This is incorrect.  Cottle initiated the medical fee dispute.  However, we do not believe this clerical error resulted in an erroneous decision, as AK Steel avers.

     KRS 342.020(1) entitles an injured worker to reasonable and necessary medical treatment for a work-related injury.  Cottle’s right to future medical treatment was not waived in the settlement agreement.  803 KAR 25:096 Section 8(1) requires an employer to either tender payment or initiate a medical fee dispute within thirty days following receipt of a completed statement for services.  However, this obligation shall not arise when the statement for services “clearly indicates that the services were not performed for a work-related condition”.  803 KAR 25:096 Section 8(3).

     AK Steel argues that the final utilization review decision is the equivalent of a statement for services.  Dr. Travis opined the proposed surgery is not for a work-related condition.  Relying on 803 KAR 25:096 Section 8(3), AK Steel claims that it bore no obligation to initiate a medical fee dispute.  We disagree.

     803 KAR 25:096 Section 8(2)(d) specifically states that, “the thirty day period for filing a medical fee dispute shall commence on the date of rendition of the final decision from the utilization review.”  There is no regulation that relieves the employer of the obligation to initiate a medical fee dispute when the utilization review denies treatment based on work-relatedness.  Furthermore, in Kentucky Associated General Contractors Self-Insurance Fund v. Lowther, 330 S.W.3d 456, 461 (Ky. 2010), the Kentucky Supreme Court determined, “the employer has the burden to initiate a formal medical dispute following a final utilization decision denying pre-authorization.”  In Lowther, the utilization reviewer denied the requested treatment as unreasonable and unnecessary for treatment of the work-related injury.  However, the Court did not make an exception for utilization review decisions based on work-relatedness.   

     In rendering its decision in Lowther, the Supreme Court equated the final utilization review decision to a “statement for services.”  Later, in Richey v. Perry Arnold, Inc., 391 S.W.3d 705, 712 (Ky. 2012) it further analyzed the Lowther decision:

The [Lowther] court acknowledged that neither KRS 342.020 nor the applicable regulations states explicitly that a decision to deny pre-authorization constitutes a “statement for services”, which 803 KAR 25:096 Section 8(1) requires the employer to pay or contest within 30 days.  We noted with approval, however that the Board had interpreted the regulations since 2001 as equating a final utilization review decision to deny pre-authorization with a “statement for services.”  The same rule clearly applies when an employer refuses to pre-authorize a medical procedure without submitting it to utilization review because the effect of the utilization review process under 803 KAR 25:096 Section 8(2)(d) is simply to toll the 30-day period.

 

     AK Steel highlights this portion of the Court’s discussion equating a final utilization review decision with a “statement for services.”  However, we disagree with AK Steel’s interpretation of this analogy.  We read Lowther and Richey to mean the final utilization review report is like a statement for services, in that the employer’s obligation to initiate a medical fee dispute is triggered by either.  Unlike AK Steel, we do not read these cases to mean a final utilization review is the equivalent of a statement for services for purposes of 803 KAR 25:096 Section 8(3).  Stated otherwise, a final utilization review denying treatment on the basis of work-relatedness is not the equivalent of a statement for services that “clearly indicates that the services were not performed for a work-related condition.”

     For this reason, we conclude the ALJ properly concluded AK Steel failed to timely file a medical fee dispute.  Accordingly, it is responsible for the contested treatment.  Phillip Morris, Inc. v. Poynter, 786 S.W.2d 124 (Ky. App. 1990).  AK Steel did not request reconsideration to contest the dates upon which the utilization review report was issued.  Therefore, the pertinent facts – that is, the deadline by which AK Steel was obligated to file a medical fee dispute – are final.  Based on these facts, the ALJ properly determined AK Steel is liable for the contested treatment due to its failure to timely file a medical fee dispute.  As such, the ALJ’s incorrect statement that AK Steel initiated the medical fee dispute, when in fact Cottle filed a motion to reopen, is harmless error.

     We likewise acknowledge that the ALJ erroneously denied AK Steel’s petition for reconsideration as moot.  The petition was timely filed and no change in circumstances rendered AK Steel’s position unviable.  However, we find no reason to remand this matter to the ALJ.  In its petition for reconsideration, AK Steel argued that a final utilization review denying treatment as not work-related is the equivalent of a statement for services within the meaning of 803 KAR 25:096 Section 8(3).  This is solely a legal question, and the facts upon which this legal question rest are uncontested.  As such, our review is de novo and there is no further fact-finding or analysis required of the ALJ.  Therefore, we decline AK Steel’s request to remand this matter to the ALJ for entry of a new Order on reconsideration. 

     Accordingly, the October 3, 2016 Medical Fee Opinion and Order and the January 5, 2017 Order on Reconsideration rendered by Hon. Jonathan Weatherby, Administrative Law Judge, are hereby AFFIRMED.          

          ALL CONCUR.

 

 

COUNSEL FOR PETITIONER:

HON KERI E LUCAS

1544 WINCHESTER AVE, 5TH FLOOR

PO BOX 1111

ASHLAND, KY 41105

 

COUNSEL FOR RESPONDENT:

 

HON WILLIAM C O REAVES

PO BOX 2557

ASHLAND, KY 41105

 

RESPONDENT, MEDICAL PROVIDER:

 

DR. MATTHEW WERTHAMMER

2860 THIRD AVE, STE 10

HUNTINGTON, WV 25702

 

ADMINISTRATIVE LAW JUDGE:

 

HON JONATHAN WEATHERBY

PREVENTION PARK

657 CHAMBERLIN AVE

FRANKFORT, KY 40601