September 8, 2017 200885862

Commonwealth of Kentucky 

Workers’ Compensation Board




OPINION ENTERED:  September 8, 2017



CLAIM NO. 200885862



SHERRY LANGER                                  PETITIONER



















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


ALVEY, Chairman.  Sherry Langer (“Langer”) appeals from the Opinion and Order rendered by Hon. Jane Rice Williams, Administrative Law Judge (“ALJ”) on March 7, 2017.  The ALJ found the Kentucky Employer’s Safety Association (“KESA”), the worker’s compensation insurer for Holiday Inn Express, liable for reimbursement to Langer, or to Dr. Michael McGhee for expenses related to the work injury.  The ALJ also ordered either Langer or Dr. McGhee to provide documentation supporting the request for reimbursement within thirty days after the issuance of her decision.  The ALJ additionally stated if the supporting documentation is not provided within thirty days, KESA has no obligation for reimbursement.  The ALJ denied Langer’s petition for reconsideration stating the result reached in her decision was a “fair solution”.  The ALJ also stated there was no mechanism to order costs and attorney fees except for sanctions, which she found were not applicable.

On appeal, Langer argues the ALJ erred by failing to find Holiday Inn Express, or its’ insurer, KESA, waived any objection to the request for reimbursement she submitted since it failed to timely object or file a medical dispute.  Langer notes the holding by the Kentucky Supreme Court in Kentucky Associated General Contractors Self Insurance Fund v. Lowther, 330 S.W.3d 452 (Ky. 2010), which recited the procedure required in contesting or denying a medical bill or proposed procedure.   Langer also noted the holding in Phillip Morris, Inc. v. Poynter, 786 S.W.3d 124 (Ky. App. 1990) which found the employer was foreclosed from challenging a medical bill because it did not timely file a motion to reopen.  Langer also argues the ALJ erred in failing to assess sanctions in the form of costs and attorney fees for the failure to pay the submitted expenses, or to challenge them in a timely manner. 

Because it is clear neither KESA nor Holiday Inn Express ever filed a challenge to the tendered out-of-pocket expenses, including reimbursement of medical bills Langer paid out-of-pocket, the ALJ’s decision is hereby vacated.  This claim is remanded for a determination regarding compensability, and whether sanctions should be issued pursuant to KRS 342.310 for the failure to timely pay or challenge the tendered bills.  Likewise, on remand, the ALJ shall determine whether this matter should be referred to the Commissioner of the Department of Workers’ Claims for consideration of assessment of penalties for unfair claims settlement practices pursuant to KRS 342.267.

          Langer filed a Form 101 alleging she injured her right shoulder, right elbow, right arm, neck and back on May 25, 2008 while working as a housekeeper for Holiday Inn Express in Murray, Kentucky.  At the time of her injury, she was attempting to open a door to the laundry chute with her arms full of sheets when she experienced a pop in her right shoulder, neck and back.  Langer was awarded temporary total disability benefits, permanent partial disability benefits based upon a 10% impairment rating, enhanced by the two-multiplier contained in KRS 342.730(1)(c)2, and medical bills due to her work-related injuries in a decision issued by the ALJ on March 22, 2013.  On March 25, 2013, the ALJ issued an amended Opinion, Order and Award providing additional analysis of her application of the two-multiplier pursuant to  Fawbush v. Gwinn, 103 S.W.3d 5 (Ky. 2003).

Both Langer and Holiday Inn Express filed petitions for reconsideration.  In the order on reconsideration issued May 29, 2013, the ALJ found Langer is entitled to treatment with Dr. McGhee for her opioid abuse.  The ALJ specifically found as follows:

The ALJ has found Defendant Employer responsible for reasonably related medical expenses which the ALJ believes includes the treatment for opioid abuse with Dr. McGhee.  The evidence is that Plaintiff was taking prescribed opioids as part of her treatment for cure and relief of the effects of the work injury.  The fact that Plaintiff had been treated in the past for abuse has been considered; however, the records indicate Plaintiff presented to Dr. McGhee and gave a history of being drug free until she was prescribed pain medication to treat the work injury.  While the treatment is not unlimited, the evidence supports that finding that the treatment, thus far, was due to the effects of the work injury. 


Neither the ALJ’s decision nor order on reconsideration were appealed.

On July 14, 2014, Langer filed a motion to reopen the claim.  Langer had submitted a Form 114 request for reimbursement which KESA received on July 17, 2013.  This request included reimbursement for many office visits beginning in 2012.  As noted above, in her order on reconsideration, the ALJ specifically found treatment with Dr. McGhee is compensable.  Langer requested an order directing payment for treatment with Dr. McGhee.  Langer argued KESA/Holiday Inn Express had thirty days to file a motion to reopen to challenge expenses tendered to them, and failed to do so.  Langer requested that not only the tendered expenses be paid, but additionally the ALJ should award costs and attorney fees resulting from this proceeding.  In the Form 112 filed along with the motion to reopen, Langer noted she had requested reimbursement for mileage, prescriptions and medical treatment which were not timely challenged by either KESA or Holiday Inn Express.

Although both Langer and KESA/Holiday Inn Express filed medical records, the most pertinent evidence to the issues on appeal is the affidavit and deposition testimony of Kathy Williams (“Williams”), claims examiner with KESA.  KESA/Holiday Inn Express had previously filed Williams’ affidavit in response to Langer’s motion to reopen.  In the affidavit, Williams stated that due to confusion Langer was informed that treatment with Dr. McGhee was not authorized.    On August 7, 2013, Langer was paid $68.46 for out-of-pocket prescription expenses.  On November 25, 2013, Langer was paid $894.32 for reimbursement for mileage requests from June 13, 2012 through July 12, 2013.  Williams stated Langer had advised she continued to treat with Dr. McGhee for opioid dependency, but he refused to bill KESA directly.  Williams informed Langer that without a bill from Dr. McGhee, there was nothing for KESA to pay.  She admitted Langer had paid Dr. McGhee directly and had asked for reimbursement.

Williams testified on June 3, 2015.  She testified that immediately after she received the initial decision from the ALJ in 2013 she had a discussion with Langer regarding Dr. McGhee’s treatment.  She admitted she received a Form 114 request for reimbursement from Langer on July 17, 2013.  This request was rejected.  Williams stated, “There was a bit of confusion because per the award she was allowed to treat with Dr. McGhee ….”  She stated none of the amounts requested in the July 2013 Form 114 were paid until November 25, 2013.  She stated a letter was sent to Langer denying the reimbursement on August 7, 2013; however, neither a motion to reopen or a Form 112 was filed.  A copy of the note on the Form 114 submitted by Langer was attached to Williams’ deposition. Likewise, utilization review was not performed.  She stated Langer did not provide medical records or bills, only a request for reimbursement.  She admitted she had a Form 106 medical authorization.

Williams acknowledged she received a letter from Langer’s counsel regarding reimbursements on February 6, 2014.  The letter indicated certain information was attached, which she denied receiving.  She did not follow up with Langer’s counsel to indicate she did not receive the attachments.  In fact, she did not respond to the letter, and again no medical dispute was filed. 

KESA filed records from Dr. McGhee on June 1, 2015 for treatment he administered.  Many of those records are illegible.  KESA additionally filed records from Dr. Chris Marshall, a general practice physician for treatment dates of February 11, 2015; April 8, 2015 and May 6, 2015.  KESA also filed the May 18, 2015 report of Dr. David Shraberg who performed a records review.  Dr. Shraberg found no evidence Langer’s treatment has shown any progress in treating chemical dependency.  He opined her treatment regimens should be reassessed.  He stated treatment with Suboxone or Methadone for maintenance is ill advised.  He also stated no documentation supports increasing Suboxone or using Klonopin or Ambien.  Subsequently, KESA filed a Form 112 challenging treatment with Dr. McGhee.

On December 5, 2016, the ALJ entered an order removing the claim from abeyance, and setting a proof schedule.  A telephonic status conference was scheduled for January 3, 2017.  In an order entered January 6, 2017, the ALJ acknowledged the parties had not completed taking proof.  On January 27, 2017, the ALJ noted that pursuant to agreement of the parties, the claim stood submitted for a decision, and she permitted briefs to be filed.

The ALJ rendered an Opinion and Order on March 7, 2017, finding as follows:

This dispute has invoked an extensive and exhaustive consideration of the issues and the law on medical fee disputes.  Paramount in the decision making process is a desire for fairness to all parties.  Plaintiff should not have to pay out of pocket for expenses that should be the responsibility of the carrier.  On the other hand, the carrier should be able to ascertain exactly what is billed without too much trouble and should not have to pay bills for which there is no appropriate explanation.  The procedures are clearly addressed in the statutes and regulations.


It could be that because Dr. McGee’s[sic] treatment was found compensable in the prior opinion, Plaintiff was under the impression she or Dr. McGee [sic] would be somewhat protected from denial of payment for failure to comply with procedure.  Had the Opinion and Order on reconsideration been more detailed and specifically pointed out that proper procedure would be required, possibly there would have been more attention to detail.  Some bills or expenses related to the treatment have been paid.  After careful consideration of the issues and comments of the parties, and, being otherwise sufficiently advised,


IT IS HEREBY ORDERED, within 60 days of this order, KESA shall reimburse Plaintiff or Dr. McGee[sic] for expenses related to the work injury.  Within 30 days of the date of this order, Plaintiff or Dr. McGee [sic] shall provide all paperwork required by the regulations to support any request for payment or reimbursement of expenses. The obligation of Defendant Employer shall commensurate within the limits set by the Kentucky Medical Fee Schedule.


Should Plaintiff or Dr. McGee [sic] fail to provide appropriate paperwork within 30 days, the charge will not be the liability of KESA or Defendant Employer.  As noted above, KESA’s obligation is no more than is required by the statute and regulations.


Langer filed a petition for reconsideration arguing it is undisputed that she requested from KESA reimbursement for prescription expenses, mileage and payments to Dr. McGhee, and provided receipts for the payments.  She additionally noted KESA stipulated it had those requests for more than forty-five days prior to the medical dispute being filed.  She argued that because neither KESA nor Holiday Inn Express filed a medical dispute within thirty days of receipt of the requests, they had waived any defenses to payment.  Langer argued this issue was raised before the ALJ, however it was not addressed.  Langer also argued the ALJ had placed an undue burden upon her regarding the documentation she was required to provide.  Langer additionally argued she should be awarded costs and attorney fees for pursuing the reimbursement.

On March 21, 2017, the ALJ overruled Langer’s petition for reconsideration.  She found as follows:

However, after review of the Petition, the Response of the Defendant Employer as well as a review of the Opinion, it is found that the Opinion provides a fair solution in light of the fact that Dr. McGee [sic] has failed to comply with procedure.  He has an opportunity to provide missing documentation to varify [sic] the charges for which the Employer should pay.  As for Plaintiff’s request for payment of costs and attorney fees, this request is denied.  There is no mechanism outside of a sanctions scenario (not applicable herein) by which the ALJ can order costs and fees.


     We initially note KRS 342.020(1) entitles an injured worker to reasonable and necessary medical treatment for a work-related injury.  KRS 342.020(1) and 803 KAR 25:096 Section 8(1) require an employer to either tender payment or initiate a medical fee dispute within thirty days following receipt of a completed statement for services.  Here, the mileage reimbursements, prescription reimbursements, and payments to Dr. McGhee were for treatment clearly authorized in the 2013 order on reconsideration issued by the ALJ.

     It is undisputed that neither KESA nor Holiday Inn Express initiated a medical dispute within thirty days after receiving the July 2013 request from Langer, or the February 2014 request from her attorney.  Regarding challenges to statements for services following the resolution of a claim, 803 KAR 25:096 Section 8(2)(d) specifically states, “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.”  Here, utilization review was not initiated, so the thirty day time period to challenge or file a medical dispute was not delayed or expanded.  At no time did KESA or Holiday Inn Express avail themselves of the dispute/review procedure set forth in the statute or applicable regulations.

     If the tendered request is submitted to utilization review, the thirty days does not begin to run until that process is exhausted.  The burden to formally challenge any disputed payment rests with the obligor, in this case KESA and Holiday Inn Express. 

     As noted in Westvaco Corporation v. Fondaw, 698 S.W.2d 837 (Ky. 1985), KRS 342.125 provides the mechanism to reopen a claim for a decision by an administrative law judge on any medical expenses submitted which are contested.  In Phillip Morris, Inc. v. Poynter, supra, the Kentucky Court of Appeals held failure of the employer to challenge bills submitted by the employee, post-award, constituted a waiver of its right to challenge them.  This holding was echoed by the Kentucky Court of Appeals in National Pizza Company v. Curry, 802 S.W.2d 949 (Ky. App. 1991), which stated, “Clearly the employer must raise the issue of compensability of medical treatment with the board or the right to object is waived.”  This holding was reiterated by the Kentucky Supreme Court in R.J. Corman Railroad Construction v. Haddix, 864 S.W.2d 915 (Ky. 1993).

     Later in Kentucky Associated General Contractors Self-Insurance Fund v. Lowther, supra, a case involving the duty to file a medical dispute after completion of the utilization review process, the Kentucky Supreme Court determined, “the employer has the burden to initiate a formal medical dispute following a final utilization decision denying pre-authorization.”  Later, in Richey v. Perry Arnold, Inc., 391 S.W.3d 705, 712 (Ky. 2012), the Court 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.



     In this case, Langer submitted a request for reimbursement for expenses she had paid with the proper form authorized by the Kentucky Department of Workers’ Claims.  The first such request was admittedly received by KESA on July 17, 2013.  The denial of this request was transmitted to Langer on August 7, 2013.  However, KESA neither filed a motion to reopen, nor instituted a formal medical dispute.  The same is true for subsequent requests made by counsel for Langer.  While we note KESA may well have had reasons for refusal to pay, merely not paying or not responding are not available options.  If legitimate objections to the request existed, it was incumbent upon KESA to formally assert the objections.

     The dispute procedure is set forth in 803 KAR 25:012 and 803 KAR 25:096 §8, referenced above.  We additionally note 803 KAR 25:012 §2 states, “In accordance with KRS 342.310, a sanction (1) Shall be assessed, as appropriate, if: (a) An employer or medical payment obligor challenges a bill without reasonable medical or factual foundation.”  We note Williams’ testimony regarding confusion as to Dr. McGhee’s treatment, which she acknowledged was found reasonable and necessary in the ALJ’s amended decision.

          Based upon the factors in this case, it is apparent Langer, post-award, attempted to obtain reimbursement for expenses she had paid including travel, prescriptions, and office visits with Dr. McGhee.  It is equally clear KESA did nothing to bring this before the ALJ for a determination.  We additionally note the ALJ’s statement, “Paramount in the decision making process is a desire for fairness to all parties.”  However, the first determination which must be made is whether KESA/Holiday Inn Express timely contested the request for reimbursement.  Only after KESA/Holiday Inn Express cleared that hurdle were other defenses available.  For this reason, the ALJ’s decision regarding the medical dispute and the order on Langer’s petition for reconsideration are vacated.  On remand, the ALJ must determine whether KESA/Holiday Inn appropriately disputed Langer’s request.  If so, then the ALJ may review the objections to reimbursement to Langer.  If not, KESA/Holiday Inn has waived any such objections or defenses.  While we direct no particular result, it is incumbent upon the ALJ to render a decision in accordance with the procedure as set forth in existing case law, the statute and applicable regulations.

          The ALJ, in consideration of whether KESA/Holiday Inn appropriately contested the requests for reimbursement, shall consider whether sanctions should be assessed pursuant to KRS 342.310, and shall consider whether referral of this claim to the Commissioner of the Department of Workers’ Claims for consideration of the assessment of penalties pursuant to KRS 342.267 is appropriate.

          Accordingly, the March 7, 2017 Opinion and Order and the March 21, 2017 Order on Reconsideration rendered by Hon. Jane Rice Williams, Administrative Law Judge, are hereby VACATED.  This claim is REMANDED for a determination in accordance with the considerations set forth above.   












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