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Workers’
Compensation Board
OPINION
ENTERED: September 8, 2017
CLAIM NO. 200885862
SHERRY LANGER PETITIONER
VS. APPEAL FROM HON. JANE
RICE WILLIAMS,
ADMINISTRATIVE LAW JUDGE
HOLIDAY INN EXPRESS;
INJURED WORKERS PHARMACY;
DR. MICHAEL MCGHEE; and
HON. JANE RICE WILLIAMS,
ADMINISTRATIVE LAW JUDGE RESPONDENTS
OPINION
VACATING
& REMANDING
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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.
STIVERS,
MEMBER, CONCURS.
RECHTER, MEMBER, CONCURS IN RESULT ONLY.
COUNSEL
FOR PETITIONER:
HON JEFFERY A ROBERTS
509 MAIN STREET
MURRAY, KY 42071
COUNSEL
FOR RESPONDENT HOLIDAY INN EXPRESS:
HON SAMUEL J BACH
PO BOX 881
HENDERSON, KY 42419
COUNSEL
FOR RESPONDENT INJURED WORKERS’ PHARMACY:
HON CHED JENNINGS
401 WEST MAIN ST, STE 1910
LOUISVILLE, KY 40202
HON JAMES G FOGLE
610 SOUTH FOURTH ST, STE 701
LOUISVILLE, KY 40202
RESPONDENT:
DR MICHAEL MCGHEE
915 MCCLARDY ROAD
CLARKSVILLE, TN 37042
ADMINISTRATIVE
LAW JUDGE:
HON JANE RICE WILLIAMS
657 CHAMBERLIN AVE
FRANKFORT, KY 40601
