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February 2, 2018 200566393

Commonwealth of Kentucky 

Workers’ Compensation Board

 

 

 

OPINION ENTERED:  February 2, 2018

 

 

CLAIM NO. 200566393

 

 

VISION MINING (KMMCLLC)                        PETITIONER

 

 

 

VS.        APPEAL FROM HON. JEANIE OWEN MILLER,

                 ADMINISTRATIVE LAW JUDGE

 

 

 

EDWARD L. WEBSTER and

DR. DAVID EGGERS and

HON. JEANIE OWEN MILLER,

ADMINISTRATIVE LAW JUDGE                      RESPONDENTS

 

 

OPINION

AFFIRMING

 

                       * * * * * *

 

 

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

 

ALVEY, Chairman.   Vision Mining (KMMCLLC) (“Vision Mining”) appeals from the August 7, 2017 Order rendered by Hon. Jeanie Owen Miller, Administrative Law Judge (“ALJ”) overruling its Motion to Reopen. Vision Mining also appeals from the September 8, 2017 order denying its petition for reconsideration.

          On appeal, Vision Mining asserts it made a prima facie showing since it satisfied the requirements outlined in 803 KAR 25:012 §(3)(a).  Vision Mining also argues the ALJ violated its due process rights in overruling its motion to reopen by not affording it an opportunity to develop evidence.  Vision Mining argues it timely submitted the request for pre-authorization for surgery to utilization review (“UR”). Vision Mining argues the requested pre-authorization of a surgical procedure is not a statement for services, and the   ALJ’s interpretation of Kentucky Associated General Contractors Self-Insurance Fund v. Lowther, 30 S.W.3d 456 (Ky. 2010) was erroneous.  Because Vision Mining failed to timely file its medical dispute within thirty days of the final utilization review decision, we affirm. 

          Edward Webster (“Webster”) sustained multiple injuries in a rock fall accident on November 14, 2005, while working as an underground coal miner for Vision Mining.  In an opinion rendered September 16, 2008, Hon. R. Scott Borders, Administrative Law Judge (“ALJ Borders”), found Webster had a 5% impairment rating for the lumbar spine, 8% for the cervical spine, and 20% for the knees and hip, yielding a combined 30% impairment rating.  ALJ Borders found Webster permanently and totally disabled, and awarded permanent total disability benefits enhanced by 30% based upon a safety violation pursuant to KRS 342.165(1), and medical benefits.

          Vision Mining filed a Form 112 on August 2, 2017.  The Form 112 identified the parties, including the medical provider, Dr. David Eggers.  Vision Mining left blank the following section:

The date(s) on which each disputed statement for services was first received by the employer, insurance carrier, or any agent thereof is as follows:

 

Description        Date First Received     

 

Vision Mining provided the following statement describing the nature of the dispute:

Decompression fusion for pain is not supported.  While there is some subjective complaint of numbness in both hands, it hasn’t been verified by electrodiagnostic studies.  No indication of progressive neurological deficits or of cervical myelopathy.

 

          Vision Mining attached a Motion to Reopen, UR report, affidavit and a copy of the September 2008 opinion.  In the June 30, 2017 UR report, Dr. Kimberly Terry summarized several treatment notes from 2016 and 2017, as well as a February 24, 2017 cervical MRI.  Dr. Terry noted an “ACDF at C4-5” was recommended on Aril 3, 2017.  After reviewing medical records from 2016 and 2017, Dr. Terry determined the request was not medically reasonable or necessary.  Notice of the final UR decision for the proposed ACDF C4-5 was sent to Webster on July 3, 2017.

          Along with the above documents, Vision Mining attached the affidavit of its attorney, Hon. Richard Hartsock (“Hartsock”), dated August 2, 2017, which summarized the original November 24, 2005 work injury and September 2008 opinion by ALJ Borders.  Hartsock then provided short summaries of Webster’s visits to “the clinic” on April 26, 2016, December 20, 2016, and April 2, 2017, as well as the 2017 MRI.  Hartsock stated as follows regarding the April 2, 2017 visit:

5.  Plaintiff returned to the clinic on April 2, 2017 reporting severe neck pain and intolerable range of motion.  He reported numbness in both hands.  Due to the intractable pain, an ACDF at C4-5 was recommended.   

 

          Hartsock summarized the findings of Dr. Terry, and stated Vision Mining filed the medical dispute to contest the reasonableness and necessity of the requested ACDF C4-5.  We note Hartsock neither specified which “clinic” he referred to, nor identified the treating physician at the “clinic.”  

          In the attached Motion to Reopen, Vision Mining noted that based upon a recent UR, “the treatment that is subject of this reopening has been deemed not reasonable and necessary for treatment of the work injury” and requested a summary decision in its favor on the pleadings or assignment to an Administrative Law Judge. 

          Vision Mining filed a contemporaneous motion to join Dr. Eggers to the dispute on August 2, 2017. 

          On August 7, 2017, the ALJ overruled Vision Mining’s motion to reopen, stating as follows:   

The Defendant/Movant, in its Form 112, failed to complete the section of the Form requiring:

The date(s) on which each disputed statement for services was first received by the employer, insurance carrier, or any agent thereof is as follows:

 

Description

Date First Received

 

While the movant has supported its motion with a Utilization Review report (dated 6/30/2017), authored by Dr. Kimberly Terry, MD, the form 112 fails to state/ describe the nature of the dispute. The accompanying AFFIDAVIT of counsel fails to identify the specific facts of the plaintiff’s medical treatment and fails to identify the medical provider and the supporting background leading to the Motion to Reopen. The affidavit of counsel recounts only the plaintiff’s treatment at “the Clinic” from 4/26/2016 through 4/2/2017. The Affidavit states in paragraph 5:

The plaintiff returned to the clinic on April 2, 2017 reporting severe neck pain and intolerable range of motion. He reported numbness in both hands. Due to the intractable pain, an ACDF at C4-5 was recommended.

 

It is significant that the evidentiary record of the prior medical dispute (withdrawn by the defendant/movant on July 3, 2017) contained a Progress note of Dr. David M. Eggers of his 4/23/2017 examination of Plaintiff; and Dr. Eggers’/Neurosurgical Consultants’ 04/03/2017 faxed request to Patty Rosenberger at AIG, for approval for surgery: Anterior Cervical Discectomy and fusion C4-5.

 

The defendant/movant has failed to document that the request for approval of surgery by Dr. Eggers was timely submitted for Utilization Review. The ALJ finds that the Defendant/movant has failed to properly complete the Form 112 and has failed to identify the date upon which the defendant/movant received the request for the payment of medical services – all in violation of 803 KAR 25:012 Section 1 (6).

 

Accordingly, the Defendant/movant's Motion to Reopen is OVERRULED.

 

     Vision Mining filed a petition for reconsideration on August 21, 2017.  Vision Mining first argued it timely submitted the request for ACDF C4-5 to UR.   Vision Mining acknowledged it received a request for approval of the cervical fusion surgery from Dr. Egger’s office on April 3, 2017, but it included the wrong corresponding progress note.  Its insurance carrier, AIG, requested the April 3, 2017 progress note, which was not sent until May 19, 2017.  Vision Mining stated AIG then sent the request to UR, which was denied on June 14, 2017 by Dr. Ring Tsai.  Vision Mining stated the decision was appealed and a final UR was issued by Dr. Terry on July 3, 2017.[1] 

     Vision Mining attached the fax cover sheet from Dr. Egger’s office dated April 3, 2017 requesting approval of the surgery accompanied by a November 14, 2016 progress note; the same April 3, 2017 fax cover sheet accompanied by the April 3, 2017 progress note, bearing a May 19, 2017 time stamp; the June 14, 2017 notice of denial sent to Webster based upon the opinion of Dr. Tsai; the July 3, 2017 notice of the final UR decision; and the June 30, 2017 UR report by Dr. Terry.  Pursuant to 803 KAR 25:190, Vision Mining argued the facts show it filed a timely medical dispute and adequately notified Dr. Eggers of the denial.  Alternatively, even if it did not institute UR in a timely manner, the administrative regulation does not provide for dismissal for failure to do so. 

          Vision Mining argued the request for pre-authorization for the cervical fusion surgery does not constitute a statement of disputed services, and therefore it was not required to complete the section in question in the Form 112.  It also stated it provided a sufficient description of the nature of the dispute in the Form 112 in light of the fact the litigation management system limits the description to 256 characters.  Vision Mining stated it satisfied all requirements of 803 KAR 25:012.

          Vision Mining argued it adequately identified Dr. Eggers as the requesting physician, noting he was listed as the medical provider in the Form 112.  It also noted a motion to join Dr. Eggers was contemporaneously filed with the dispute. 

          Therefore, Vision Mining requested the ALJ enter an Order sustaining its motion to reopen.  Webster, pro se, filed a response.

          On September 8, 2017, the ALJ denied Vision Mining’s petition, stating as follows: 

The defendant/movant avers that:

 

1.   The defendant/movant timely submitted the request for ACDF-5 to Utilization Review;

 

2.   The defendant/movant requested additional information of the medical provider (Dr. Eggers) in a timely manner pursuant to 803 KAR 25:190;

 

3.   The requested additional information was not received by AIG until May 19, 2017;

 

4.   The initial UR denied the surgery pre-authorization on June 14, 2017; After an appeal, a Final Utilization Review Decision was issued on July 3, 2017;

 

5.   The Motion to reopen was timely filed;

 

6.   The request for pre-authorization was not a statement of disputed services and therefore the defendant/movant was not required to list the dates regarding receipt of disputed services.

 

Each of these arguments will be addressed. It is significant to note that no affidavit, or verification accompanied the defendant/movant’s Petition for Reconsideration. The statements by counsel in the Petition appear to be reciting the contents of the attached exhibits. Unfortunately, none of the exhibits support the defendant’s assertions, with the exception of a “time-stamp” of 5/19/2017 on Exhibit B (Dr. Eggers’ office’s purported second request for pre-authorization of the surgery).

 

The arguments made by the petitioner do not convince the undersigned that the Motion to Reopen (MTR) this claim was timely and complete pursuant to the applicable regulations.

 

The most important fact herein is that 803 KAR 25:012 Section 1 (6) requires that a motion to reopen and a Form 112 be filed to commence a resolution of medical dispute. Section 1(6)(a) states: “Unless utilization review has been initiated, the motion to reopen and Form 112 shall be filed within thirty (30) days following receipt of a complete statement for services pursuant to 803 KAR 25:096.” (emphasis ours) The filing of the UR only tolls the 30 days in which the defendant has to file the MTR. There is no dispute that the Motion to Reopen here was not filed until August 2, 2017.

 

The defendant/movant argues that there was not “a complete statement for services pursuant to 803 KAR 25:096.” There are two reasons the defendant’s argument fails to convince the undersigned that the MTR was timely filed.

 

First, the defendant admits it received Dr. Eggers’ request for pre- authorization on 4-03-2017. The defendant then states: “Defendant affirmatively states that AIG received the initial request which did not include the April 3, 2017 progress note but rather records from a November 14, 2016 visit . . .” In an unverified statement, the defendant, by counsel, states: “AIG requested the April 3, 2017 progress note which was not sent to AIG until May 19, 2017 as evidenced by the time stamp on the attached facsimile cover sheet. (see attached Exhibit B).” There is no indication when the 4/3/2017 progress note was requested. There is no verification and no transmission documentation (of the request of AIG to Dr. Eggers office) to note the timeliness of the request. That being said, 803 KAR 25:190 Section 5(1)(a) specifically requires a request for pre-authorization of a medical procedure to be submitted to UR. 803 KAR 25:190 Section 5 (2) states: “If applicable, utilization review shall commence when the carrier has notice that a claims selection criteria has been met.” There can be no question that Dr. Eggers’ request for pre-authorization of a medical procedure (Section 5(1)(a) was known to the defendant on April 3, 2017. The defendant incorrectly relies upon its request for additional information as a tolling of the filing requirements of the UR. A complete reading of the regulation: 803 KAR 25:190 Section 5 (2) outlines that additional information may be requested AFTER the initiation of the UR. See Section 5(2)(a)(1)(2)(3). The defendant has proffered no evidence to show compliance with these regulations.

 

The defendant also avers that “this was a request for preauthorization thus there were no statements of disputed services”. The Kentucky Supreme Court has made it clear in the seminal case of KENTUCKY ASSOCIATED GENERAL CONTRACTORS SELF-INSURANCE FUND v. Sheila LOWTHER, 30 S.W.3d 456 (Ky. 2010) that for purposes of time limitations imposed in the statute, a request for preauthorization is treated as a “statement of services”. Although the case was brought regarding an unfair or “bad faith” question, the Court stated that it is the employer who bears the burden of filing a medical dispute and moving to reopen a workers' compensation award when pre-authorization for medical treatment is denied upon utilization review.

 

The court in KAGC v Lowther, supra, states in pertinent part:

 

KRS 342.020(1) authorizes the OWC to establish procedures for resolving disputes over the "necessity, effectiveness, frequency, and cost" of medical services. Pre-authorization and utilization review are two of the procedures the OWC adopted to accomplish that purpose. The term "statement for services" and the regulatory definition of the term may be construed as referring to a bill for services rendered previously, but that is not the only reasonable interpretation. We agree with the Board that the term also encompasses a final decision to grant or deny pre-authorization. We reach that conclusion because the very purpose of conducting utilization review of a pre-authorization request is to help the employer decide whether to agree or refuse to agree to pay the bill for services rendered in providing the proposed medical treatment.[22]

 

We find further support in 803 KAR 25:012, § 1(8) for our conclusion that the employer has the burden to initiate a formal medical dispute following a final utilization review decision denying pre-authorization. 803 KAR 25:012, § 1(8) is explicit in giving " [t]he employer or its payment obligor" 30 days after a final utilization review decision in which to file a medical dispute. The provision does not mention the injured worker or limit itself to retrospective utilization review. Although 803 KAR 25:012, § 1(2) permits an injured worker to file a medical dispute in order to obtain a decision on the compensability of a proposed medical treatment when a recalcitrant employer fails to do so, that fact does not absolve the employer of its burden to initiate the formal dispute.

 

We find no error in the decision to impose a fine for unfair claims settlement practices in the present circumstances. This is not a case in which the employer, its carrier, or its third-party administrator had no notice of the Board's position with respect to their obligations following a decision to deny pre-authorization. The Board determined in 2001 that KRS 342.020 and the regulations require an employer to file a medical dispute and motion to reopen within 30 days of receiving a final utilization review decision denying pre-authorization or to pay for the proposed procedure. The appellants' failure to comply with the statute and regulations supports the finding that they committed unfair claims settlement practices as well as the resulting fine. Id at 460 (emphasis ours)

 

Here, I find that the carrier was notified of the pre-authorization request from Dr. Eggers on April 3, 2017. The defendant/movant did not request a Utilization Review until sometime after May 19, 2017. After the initial denial of the pre-authorization request (date unknown) the UR notice of denial was sent to the plaintiff, Mr. Webster with a “date of notice” of 6/14/2017 by OMCA. There appears to be no notice given to Dr. Eggers on Exhibit C. Apparently, the UR denial was appealed and the “Final Utilization Review Decision”, date of notice is 7/3/2017. However, Dr. Terry’s letter denying the appeal to OMCA, Inc. is dated 6/30/2017. (See 803 KAR 25:190 Section 5(4) “The thirty (30) day period shall commence on the date of the final utilization review decision”.) The defendant/movant’s MTR was filed on August 2, 2017.

 

For all of the reasons stated above, the defendant/movant’s Petition for Reconsideration is DENIED. The defendant/movant[sic] medical dispute challenging the request for the Anterior Cervical Discectomy and Fusion C4-5 surgery was not timely filed and accordingly, the defendant/movant will be responsible for the payment of the surgery recommended by Dr. David Eggers.

 

 

     On appeal, Vision Mining asserts it made a prima facie showing since it satisfied the requirements outlined in 803 KAR 25:012 §(3)(a).  Vision Mining argues, “[b]y ruling on these extraneous issues without granting proof time to either party, ALJ Miller’s actions constitute a denial of due process.” 

          Vision Mining argues the regulations do not require an employer to show the request for approval for surgery by Dr. Eggers was timely submitted to UR in order to reopen the claim, and the ALJ committed a reversible error in using this as a basis in overruling its motion to reopen.  Vision Mining asserts it was not afforded an opportunity to develop evidence on this issue, and the deficiencies noted by the ALJ could have been corrected if it had been provided adequate proof time.  Vision Mining asserts the ALJ violated its due process rights by raising this issue for the first time in the August 7, 2017 order without allowing it additional time to develop evidence.  Even if its due process rights were not violated, Vision Mining argues, as it did in the petition for reconsideration, that it timely submitted the request for pre-authorization to UR.  Therefore, Vision Mining requests the Board find the motion to reopen proper and remand the claim to the ALJ to take proof on all issues. 

          Vision Mining argues the ALJ misconstrued applicable law in finding it failed to complete the section of the Form 112, which required the dates on which each “disputed statement for services” was first received by the employer or insurance carrier.  Vision Mining asserts a requested pre-authorization of a surgical procedure is not a statement for services and was not required to complete the section at issue.  Vision Mining asserts the ALJ’s reliance on and interpretation of Kentucky Associated General Contractors Self-Insurance Fund v. Lowther, 30 S.W.3d 456 (Ky. 2010) was erroneous.

          In the opinion, the ALJ determined Vision Mining failed to document the request for approval of surgery by Dr. Eggers was timely submitted for UR.  The ALJ also determined Vision Mining failed to properly complete the Form 112 and to identify the date upon which it received the request for the payment of services.  In the order on reconsideration, the ALJ determined the medical dispute was not timely initiated since the motion to reopen/Form 112 was not filed until August 2, 2017, more than thirty days after the date of the final UR decision by Dr. Terry.  We believe the last finding by the ALJ in the order on reconsideration is dispositive. 

          KRS 342.020(1) entitles an injured worker to reasonable and necessary medical treatment for a work injury.  The statute requires a medical provider to submit a statement for services within 45 days after initiating treatment.  The statute states the injured worker’s employer is required to pay within thirty days of receipt of a statement for services, but the Commissioner shall establish conditions tolling the 30-day period.  Similarly, 803 KAR 25:096 §8(1) requires an employer to either tender payment or initiate a medical fee dispute with a motion to reopen within thirty days following receipt of a completed statement of services. 

          The thirty-day period is tolled during a period in which the UR required by 803 KAR 25:190 is pending.  See 803 KAR 25:096 §8(2)(d).  A claim is subject to UR if a medical provider requests pre-authorization of a medical treatment or procedure.  See 803 KAR 25:190 §5(1)(a).  The following regulations address the time period an Employer must file a medical dispute when UR is required.  803 KAR 25:096 §8(2)(d) states: 

 . . . . The thirty (30) day period for filing a medical fee dispute shall commence on the date of rendition of the final decision from the utilization review. A medical fee dispute filed thereafter shall include a copy of the final utilization review decision and the supporting medical opinions.

 

803 KAR 25:012 §1(6)(a) states:

 

(a) Unless utilization review has been initiated, the motion to reopen and Form 112 shall be filed within thirty (30) days following receipt of a complete statement for services pursuant to 803 KAR 25:096.

 

803 KAR 25:012 §1(8) provides:

 

If the contested expense is subject to utilization review, a medical dispute shall not be filed prior to exhaustion of the utilization review process. The employer or its medical payment obligor shall have thirty (30) days following the final utilization review decision to file a medical dispute.

 

     In Kentucky Associated General Contractors Self-Insurance Fund v. Lowther, 330 S.W.3d 456, 460-461 (Ky. 2010), the Kentucky Supreme Court held the term “statement for services” encompasses a final UR decision to grant or deny pre-authorization that an employer must contest within 30 days or pay.  The Court also concluded the employer has the burden to initiate a formal medical dispute following a final UR decision denying pre-authorization.   

     In Lawson v. Toyota Motor Mfg., Kentucky, Inc., 330 S.W.3d 452 (Ky. 2010), Lawson filed a motion seeking post-award temporary total disability (“TTD”) benefits prospectively for the recovery period following a surgery which had been pre-authorized.  The ALJ denied the motion based on a finding the surgery was not compensable because it was unreasonable and unnecessary.  This Board reversed and remanded with respect to the request reasoning the employer failed to file a medical dispute and motion to reopen within thirty days after the surgery was pre-authorized in order to contest its reasonableness and necessity. 

          On appeal, the Court of Appeals reversed and remanded to the Board to determine whether substantial evidence supported the finding surgery was non-compensable.  The Supreme Court reversed the decision of the Court of Appeals stating the ALJ erred by denying Lawson’s request based on a finding concerning the reasonableness and necessity of the surgery.  Id. at 452-453. 

          Significantly, the surgeon had requested pre-authorization for surgery to stabilize Lawson’s right kneecap, which the insurance carrier pre-authorized.  After receiving the pre-authorization, Lawson filed a motion to reopen seeking TTD benefits.  On the date Lawson filed her motion, the surgeon was notified the employer decided to seek an independent medical evaluation.  Upon evaluation, the reviewing physician opined Lawson’s knee problem was work-related; however, he recommended the surgery not be performed.  Relying upon the physician’s opinions, the ALJ determined the surgery was not compensable, as it constituted neither reasonable nor necessary treatment for the work-related knee injury. 

     This Board reversed reasoning the injured worker had the burden in a post-settlement medical dispute to prove work-related causation, but the employer had the burden to institute the formal medical dispute and prove that the treatment at issue is unreasonable and/or unnecessary.  The Board relied upon the definition of pre-authorization contained in 803 KAR 25:190 § 1(5), and equated the utilization review decision that pre-authorizes medical treatment with a medical bill and concluded KRS 342.020(1) requires an employer to contest such a decision within thirty days of receipt or pay the resulting bill.  The Board further determined the claimant’s motion seeking TTD benefits did not place issues concerning the reasonableness and necessity of the procedure before the ALJ.  Thus, the employer’s failure to file a medical dispute and motion to reopen within thirty days in order to contest the pre-authorization decision resulted in a waiver of its right to contest the procedure. 

     Agreeing with the Board, the Supreme Court reversed, holding as follows:

     We determined today in Kentucky Associated General Contractors Self-Insurance Fund v. Lowther. [footnote omitted] that an employer wishing to contest liability for a proposed medical procedure must file a medical dispute and motion to reopen within 30 days of a final utilization review decision that recommends refusing pre-authorization. The rationale of KAGC v. Lowther applies with even greater force to a utilization review recommendation to grant pre-authorization. We conclude that in either instance an employer, having failed to invoke an ALJ's jurisdiction by filing a timely medical dispute and motion to reopen may not circumvent KRS 342.020 and the regulations by engrafting such a dispute onto a worker's pending motion for TTD. [Footnote omitted]

Id. at 456.    

     In this instance, the holding in KAGC v. Lowther, supra, and Lawson v. Toyota Motor Mfg., Kentucky, Inc., supra, are controlling.  Dr. Eggers requested approval for the ACDF C4-5, and in turn, Vision Mining initiated UR.  Dr. Terry issued the final UR report on June 30, 2017.  Vision Mining, or its carrier, was then required to file a medical fee dispute within thirty days of June 30, 2017.  Vision Mining did not file the motion to reopen and Form 112 until August 2, 2017, or thirty-three days after the date of the UR report.  Thus, Vision Mining’s failure to file a medical dispute and motion to reopen within thirty days in order to contest the pre-authorization decision resulted in a waiver of its right to contest the procedure.  Consequently, the disputed surgery requested by Dr. Eggers is compensable. 

     In light of our determination regarding the timeliness of Vision Mining’s medical dispute, we find it unnecessary to address its remaining arguments on appeal.  

     Therefore, the August 7, 2017 Order, and the September 8, 2017 Order on petition for reconsideration rendered by Hon. Jeanie Owen Miller, Administrative Law Judge, are hereby AFFIRMED.

          ALL CONCUR.

 

 

 

 


 

COUNSEL FOR PETITIONER:

 

HON H BRETT STONECIPHER

HON BRIAN W DAVIDSON

300 EAST MAIN ST, STE 400

LEXINGTON, KY 40507

 

RESPONDENT, PRO SE:

 

EDWARD WEBSTER

1320 JERNIGAN CHAPEL ROAD

GREENVILLE, KY 42345

 

RESPONDENT:

 

DR DAVID EGGERS

2200 EAST PARISH AVE

BLDG D, STE 100

OWENSBORO, KY 42303

 

CHIEF ADMINISTRATIVE LAW JUDGE:

 

HON DOUGLAS W GOTT

657 CHAMBERLIN AVE

FRANKFORT, KY 40601

 



[1] Dr. Terry’s UR is dated June 30, 2017, while the notice of denial to Webster is dated July 3, 2017.