Tuesday, December 31, 2013

Were Physical Therapy Treatments provided by a Medicare Part A provider or by a Medicare Part B provider? You'll never get an answer via a Medical Fee Review Petition.

Review of the "timeliness and/or amount" of Medical Fee Reimbursements.
The Pennsylvania Workers' Compensation Act provides that an Employer (Insurer) shall provide payment for reasonable medical services, related to a work injury. See: Section 306(f.1).

An Employer/Insurer may challenge the "Reasonableness and Necessity" of a medical expense via the Utilization Review procedures. Section 306(f.1)(6).

A Medical Provider may challenge the "Timeliness or Amount" of a payment via the Fee Review Procedures. Section 306(f.1)(5).

What if a question arises as to the "status" of the Physical Therapy billing entity and the propriety to reimburse treatments at the Medicare Part A rates or at the Medicare Part B rates?

That question is beyond the limited scope of Medical Fee Review Procedures...
so sayth the Commonwealth Court of Pennsylvania at Selective Insurance Company of America v. Bureau of Workers' Compensation Fee Review Hearing Office (the Physical Therapy Institute), No. 613 C.D. 2013, in a reported decision authored by Judge Leavitt, on December 6, 2013.

Factual Background
Employee injured his right shoulder at work. He was prescribed physical therapy modalities for treatment of his work injury. He received treatments at a facility called the "THE pt group". The worker compensation insurer received billing statements for this care from "The Physical Therapy Institute". [PTI].

Insurer DENIED any payment of these statements from PTI, stating PTI is not the entity which provided the physical therapy services represented on the submitted bill and therefore it is not entitled to payment under the medical cost containment provisions of the Act.

Insurer's legal brief asserted that:
"THE pt group" is a Medicare Part B provider and
"PTI" is a Medicare Part A provider.

The significance of this distinction is that there is a higher rate of reimbursement due to a Part A provider, compared to those due to a Part B provider.

Procedural Background 
PTI filed 2 Fee Review Applications.
The Bureau Medical Fee Review (MFR) section "determined"  in their administrative review (without a hearing, testimony or evidence) that the amounts billed were correct and directed Insurer to make these payments to PTI, together with statutory interest of 10%.
The MFR section stated: "Insurer did not provide a valid denial".

Insurer filed a Request for Hearing to contest the fee review determination, seeking a de novo hearing on both administrative determinations.
This matter was assigned to a Hearing Officer.
The parties appeared at a hearing and agreed the threshold issue was whether the Bureau had jurisdiction to decide the question of whether PTI was a medical provider, entitled to payment.

Penalty Petitions were also filed by Employee and they were pending consideration by a WCJ, after the parties made an "enormous" evidentary record. A "critical" issue was whether PTI was a "provider".

Bureau Hearing Officer Determination
The Insurer's Requests for Hearing were dismissed.
The Jurisdiction of the Medical Fee Review is limited to disputes over the amount or timeliness of payments. Here the issue was the status of PTI as a medical provider. This issue should be litigated before a WCJ.
[... it was pending].

Insurer's Commonwealth Court Appeal
At this juncture, Insurer had administrative determinations directing payments to PTI!
There was no relief available, in the form of a Bureau Hearing!.
Yes, the penalty petitions were still pending before the WCJ, but Insurer was in a vulnerable position.

Insurer filed an appeal to the Commonwealth Court.
Properly Insurer requested a supersedeas of medical expense payment ...
and the Commonwealth Court appropriately granted this supersedeas.

Commonwealth Court Decision
Insurer argued: 
(1) the Bureau erred in concluding it lacked jurisdiction of the issue of whether PTI was a "provider"
(2) in the alternative, the Bureau erred in failing to dismiss the Fee Review administrative determinations, when it dismissed Insurers' request for hearing.

Court rejected argument (1). 
The Fee Review process is limited to simple issues of payment amounts and timeliness.
The Fee Review process presupposes liability for medical expense payments has been established. (citing Nickel v. WCAB, 2008).
In cases where liability for a treatment is at issue, the claimant, not the medical provider must pursue that issue before a WCJ. (citing Crozer Chester M.C. v. Dept L&I, 2011).

Court accepted argument (2).
The parties have no dispute amount the amount billed.
The "critical" issue was always whether PTI provided the treatments such that it is a "provider" under the Act, entitled to seek a Medical Fee Review.
A WCJ must rule upon the issue of whether PTI is a "provider".
This is an issue which is beyond the scope of administrative medical fee review.

The MFR section should not have ordered Insurer to pay PTI.
This error was compounded by the Bureau leaving the fee review determinations in place.
If the Bureau lacked jurisdiction to decide the issue of liability for payment, then it also lacked jurisdiction to consider the initial PTI fee review requests.

Practice Pointers:
1.The procedural arguments serve as an excellent illustration of the necessity for experienced legal counsel in review of medical fee issues. Often, Insurers "wait until it it too late" to involve their legal counsel in the deliberative process of selecting an appropriate remedy.  Here the expenses at issue were about $3,000. But, in many cases, medical treatments remain ongoing, generating a greater liability.
The "cost" of one telephone call is worth the valuable advice one gains.

2. The factual background of this case references the pending penalty petition litigation, which was filed by employee. In this situation, where the Insurer disputes the entitlement of PTI to any payment, the decision to deny all payments will generate a Penalty petition filing. It is difficult to avoid the penalty in this scenario.

3. One compromise position may be to pay the PTI billing statements for treatment at the Medicare Part B rates... BUT this payment may not eliminate the time and expense of penalty petition litigation ... BUT it may place Insurer in a more favorable position to prevail before the WCJ regarding the assessment of any (discretionary) penalty.

Tuesday, December 17, 2013

The PA Work Comp Act as the Exclusive Remedy of the Employee ...an additional Occupational Disease remedy

A New Rule for consideration of Employer Occupational Disease Liability
The Pennsylvania Workers' Compensation Act applies to all injuries occurring within the Commonwealth. (Section 101, 77 P.S. 1).

In 1972 the Workers' Compensation Act was amended to include injuries (not just "accidents") and occupational diseases (formerly covered under the Occupational Disease Act of 1939).

The Employer's liability to the Employee under Workers' Compensation Act, is said to be the Exclusive Remedy of the employee, on account of any injury or death or occupational disease. (Section 303(a), 77 P.S 481(a).

The recent decision of the Supreme Court of Pennsylvania at Tooey v. AK Steel Corporation, No. 21 WAP 2011 decided November 22, 2013, has altered our understanding of these Exclusive Remedy provisions and their application to remote Occupational Disease claims.

"The Holding"
Occupational Disease disability, which does not manifest within 300 weeks of the last date of employment, is not compensable pursuant to the time limitations in Section 301(c)(2) definition of injury.
HOWEVER, where an Occupational disease is not compensable under the Workers' Compensation Act, due to the expiration of the 300 week period...


The majority opinion of the Supreme Court (5-1), authored by Madame Justice Todd reversed the decision of the Superior Court which concluded that injury which resulted from workplace exposures and manifested more than 300 weeks after the last employment were not "compensable" and did not render the exclusivity provision inapplicable.

1. The Statutory Interpretation Argument
This Supreme Court opinion reflects a well-crafted, if not elegant,
The definition of injury (section 301(c)(2)) states that "the term injury ... as used in this act, shall include occupational disease as defined in section 108 of this act... provided that whenever occupational disease is the basis for compensation ... it shall apply only to disability or death resulting from such disease and occurring within 300 weeks after the last date of employment...".

There was an extended discussion of the Employee and Employer arguments regarding the meaning of the word: "it", in the above passage.
Employee argued that the word "it" refers to "this act".
Employer argued that the word "it" refers to "the basis for compensation".

2. What do these arguments mean?

"If I had a world of my own, everything would be nonsense. 
Nothing would be what it is, because everything would be what it isn't. 
And contrary wise, what is, it wouldn't be, it would. You see?" 
Lewis Carroll, Alice's Adventures in Wonderland & Through the Looking-Glass.

Employees read section 301(c)(2) to mean the Act only applies to injury or diseases occurring within 300 weeks ... the act does not apply to injury concurring more than 300 weeks later ... If the Act does not apply ... it cannot preclude one's rights, so Employees' can file a civil action against their Employer.

Employers read section 301(c)(2) to mean that the Act applies to all injuries and diseases, BUT compensation is available only for disability occurring within 300 weeks!

3. Revenge of the Nerds
YES all of you English majors can read about rules of grammar concerning restrictive and non-restrictive clauses and the significance of punctuation placement of the commas in the statutory interpretation.

The Court: "Upon review, we find [Employee's] interpretation of the language of Section 301(c)(2) to be the most reasonable one." slip opinion page 11).

The Act shall only apply to disability or death occurring within 300 weeks of the last employment
If the Act does not apply to disability or death manifesting beyond 300 weeks, the Act does not preclude a civil action remedy for the employee.

4. The Act as a replacement of the Common law Tort Actions
The traditional notion of the "bargain" of the Employer and Employee is discussed.
The Employee gives up the right to damages beyond wage loss and medical expense.
The Employer gives up its common law defenses.

The Employer assumes liability without considerations of fault, in exchange for relief from the possibility of larger damages.

Then We encounter the oft-repeated maxim:
... however the Act is " remedial in nature and intended to benefit the worker, and therefore must be liberally construed to effectuate its humanitarian purposes".
[ IMHO this phrase never adds anything to the discussion]

5. So how do we get around this exclusive remedy thing?  (ie. the good stuff)
If the employee is not able to seek compensation for disability from an injury/disease arising 300+ weeks later, then the "quid pro qou" of the Act cannot be effectuated!
The employee is giving up all of his rights, without any reasonable opportunity to any compensation.
The employer is granted full immunity, under the illusion that there is no-fault liability for work injuries.

6. If there is no determination of compensability available under the Act, then the Employee civil action is not barred by the exclusive remedy provisions of the Act. 
The Court cites prior cases where an employee did not have a work comp remedy and was allowed to pursue a civil action:
i. Lord Corp, where there was no work comp litigation of the disability and death from the employee's chemical exposures,
ii. Boniecke, where employee was denied relief under the Occupational disease Act,
iii. Greer, alleged pulmonary fibrosis, an occupational disease as a result of Employer negligence.

7. Conclusion: Because the claims are not compensable under the Act, the exclusive remedy provision of Section 303(a) does not bar the common law claims against the employer. (slip opinion page 15).

Employer argued there is a difference between coverage of the Act and compensability under the Act!
The Act applies to all work injuries ... but not every claimant wins!
An employee with an occupational disease manifesting disability more than 300 weeks later, cannot obtain workers compensation benefits, but he may have a civil remedy against non-employer defendants.

Employer unsuccessfully argued that the Act is the employee's exclusive remedy, even when compensation is not available. Several examples in support of this argument are:
i. Kline, claim for damages for impotency from a work fall,
ii. Moffett, partially disabled worker not entitled to OD Act benefits.

The Majority cites Section 305(d) which allows a civil action against an uninsured employer for the proposition that there exists a dual system of recovery ... whereas Employer's arguments for an exclusive remedy would result in no remedy for the employee.

"It is inconceivable that the legislature, in enacting a statute specifically designated to benefit employees, intended to leave a certain class of employees, who have suffered the most serious of work-related injuries, without any redress under the Act or at common law."

"... the legislature did not intend the Act to apply to claims for disability or death resulting from occupational disease which manifests more than 300 weeks after the last occupational exposure".

The dissent, authored by Mr. Justice Saylor provides a well reasoned response.
He notes the legislative "line-drawing" involved in drafting any time requirement for compensability.
He emphasizes the difference between coverage of the Act and the compensability of a claim under the Act.

Claims for disability occurring more than 300 weeks after the last employment are "covered" by the act, but they are not "compensable" under the Act. If desired, the legislature may amend this provision.

Practice Pointers:
1. The Supreme Court has spoken.
This is the law. For now. Perhaps the Legislature will review this issue at a future date.
This is another "exception" to the Workers' Compensation Act, as the exclusive remedy of the employee against one's Employer for "damages" alleged as a result of a work-related harm.

There have been other exceptions, but those exceptions have been for damages not covered by the act, such as the harm from the fraudulent misrepresentations of the employer, where the employee was exposed to lead (Martin v. Lancaster Battery) or the harm of defamation, from the employer's handling of the an employee's seemingly threatening statements (Urban v. Dollar Bank).

Can this exception lead to other exceptions?

2. The Majority opinion artfully interprets the statutory language at 301(c)(2), which heretofore was considered a limitation upon the extent of work comp liability for remote effects of occupational disease.
What was once a limitation, has now been interpreted to allow an additional remedy for civil liability and recovery.

3. In the end result, one would assume that the insurance costs will increase for employers in industry with potential exposure to hazardous exposures, as the liability for remote disability has moved from the category of "uncompensated work comp claim" to the "possible civil liability claim".

4. The remote nature of these potential claims poses a defense nightmare. Perhaps as many businesses move to a computer-based document retention world, the pertinent medical records should remain available for examination. Hopefully the documentation of workplace exposures remains equally available for review and consideration.

5. Industries involved with materials that may pose an remote occupational hazard are prudent to assure retention of pertinent work records, particularly regarding employee job assignments.

Monday, December 9, 2013

Back to the FUTURE... Son of Kachinski

Back to the FUTURE ...
In 1996 the Pennsylvania Legislature amended the Workers' Compensation Act, to allow an Employer a remedy for Modification of wage-loss benefits based upon proof of the post-injury earning capacity of an injured worker via Vocational Expert opinion evidence.

Prior to the 1996 amendments, an Employer was required to establish the proof of the post-injury earning capacity via production of a job referral (a job offer) to employee. If employee was not hired, wage-loss benefits continued ... 

Unless the employee was not hired due to a "bad faith" effort in the job application process. In that instance,  the Work Comp Insurer would produce testimony and documentary evidence from the Vocational Expert and prospective employer(s) to provide substantial evidence of a bad faith response of the injured worker. 
If the WCJ found evidence of bad faith, the Employer could be granted a Modification of benefits, even without an actual job offer or a actual return-to work.

This Wage-Loss Benefit  Modification method was known as the "Kachinski" standard, based upon the 1987 decision of the Pennsylvania Supreme Court. 
(Kachinski v. WCAB (Vepco Construction Co., 532 A.2d 374 (Pa. 1987).

One may read the dozens (hundreds) of appellate case reports which addressed the factual matrix for a "good faith" job application by employee versus a "bad faith" presentation.

... it appears we will now re-visit this laborious process, based upon the recent decision reported at Phoenixville Hospital v. WCAB (Shoap), No. 32 EAP 2011, authored by Mr. Justice McCaffery on November 21, 2013.

Factual Background
In 2003 Shoup injured her left shoulder at work.
Total disability wage loss benefits were commence via NCP.
Employer filed a Petition for Modification of Total disability benefits to Partial Disability benefits, based upon medical and vocational expert reports that employee had a post-injury earning capacity.

Employer medical Expert Sattel opined she could return to sedentary duty work.
Employer Vocational Expert Kimmich opined she has a post-injury earning capacity based upon the identification of 5 "open & available" job.

There were 2 Labor Market Survey (LMS) reports, July [3jobs] and August [2jobs] of 2007

Employee Medical Expert and Vocational expert testified she could not work at any of the 5 positions identified in the Kimmich LMS.

Employee testified that she actually applied to the first 3 positions on July 30, 2007 after she received the July LMS report. She applied to jobs 4 and 5, had telephone interviews, but was not hired. Employer #5 told her she was not qualified as she lacked familiarity with a certain computer program.

WCJ Decision
WCJ found Employer's Medical & Vocational Experts more credible that Employee's Medical and Vocational experts.

...BUT the WCJ found Employee was credible that she made a "genuine effort" to secure any one of the 5 jobs in the LMS, and she did not receive a job offer.

The WCJ found that Employee "has established that in good-faith, she followed through on all of the jobs referred to her by the Employer and that none of the referrals resulted in an offer of employment'. [ note the "Kachinski-esque" language].
For this reason, Employer failed to establish its right to a Modification of benefits under Section 306(b).

WCAB Decision Affirmed
Modification of Benefits could not be based simply on whether Employer had identified job listings within Employee physical restrictions and geographic area, where Employee produced credible evidence that the jobs were in actuality not available to her.

Commonwealth Court REVERSED
Employer met its burden of proof under Section 306(b), as the LMS jobs were "open & available" at the time the LMS was conducted.

It was not relevant that Employee "followed through" on these job listings in "good faith".
[slip opinion page 9].

... BUT Commonwealth Court would not consider job #5, as the job remained open after her interview... the job opening "existed" but it was not available to her. [hmmmm ...?]

Supreme Court Reinstates WCJ denial of Modification
Their  reasonable reading of Section 306(b) ...
one that comports with a commonsense reading of the statutory language "substantial gainful employment that exists" (as well as the Act's humanitarian purposes) is an interpretation that "the proof required to modify/suspend employee's wage loss benefits must rest upon the existence of meaningful employment opportunities and not the simple identification of jobs in want ads or employment listings.
[this is not a term in the statute passed by the Pa Legislature]

Vocational Expert opinion evidence under Section 306(b) functions, not only as a means of demonstrating that there are open jobs that exist within an employee's limitations BUT also as a mechanism for providing the employee with NOTICE of the existence of these jobs, which thus provides A SERIOUS OPPORTUNITY TO SECURE EMPLOYMENT. [slip opinion page 21].

Accordingly an employee must have latitude, greater than that allowed by the Commonwealth Court, to PRESENT EVIDENCE REGARDING HER EXPERIENCE WITH APPLYING FOR THE JOBS IDENTIFIED BY THE EMPLOYER'S VOCATIONAL EXPERT WITNESS.
[slip opinion page 22].



1. Continue to assign Vocational Experts and obtain Post-Injury Earning Power Assessment evidence via Labor Market Surveys. 

This remains a valuable remedy in the handling of PA work comp cases.

2. Confirm that your Vocational Expert will continue to monitor the Employee's post-report application efforts with the prospective employers identified in the LMS.

3. Obtain notarized statements form each prospective employer regarding the details of employee's application. Anticipate that you will need to produce these witnesses as rebuttal to Employee's assertions.

4. One "old" Kachinski strategy was to schedule an application time and/or interview time for the Employee so that the vocational Expert could attend and observe the application process with the prospective employer ... this may remain an effective strategy!

I will refrain from my personal commentary regarding the complete abrogation of the statutory language that "earning power" SHALL ( one of those mandatory... got to do it... words)
be determined by expert opinion evidence. These words are plain, easy to understand (for most) and an unambiguous expression on the Legislative intent of Section 306(b).

Unfortunately, this opinion corrupts that Legislative intent.