Medical Fee Issues ... after Compromise & Release Settlement

Medical Fee Review after the Compromise & Release Settlement.
The Pennsylvania Workers' Compensation Act was amended in 1996 to allow parties to settle cases involving wage loss benefits, as well as medical expense liability.

The 1993 Amendments to the Act established medical fee caps, a utilization review procedure and a medical fee review procedure.

Often, when work comp cases are settled, the parties intend to enter into a binding, final settlement regarding both wage loss and medical expenses payments. At times, only the wage loss is settled.

An issue may arise regarding medical expense responsibility, after the settlement. A recent case before a panel of the Commonwealth Court discussed the review of a medical fee dispute at: Dr. Scott Jaeger v. Bureau of Workers' Compensation Fee Review Hearing Office (American Casualty Ins, Co.),
No. 1570 C.D. 2012, an unreported memorandum opinion authored by Judge Leavitt on August 26, 2013.

Factual and Procedural Background

Employee was injured at work on May 17, 2006.
The parties enter into a Compromise and Release settlement of medical and wage loss liability. December 7, 2007, the WCJ approved the settlement.

July 14, 2010, Dr. Jaeger's billing manager submitted an invoice to Coventry Health Care (the insurer's medical fee processing company) for medical services rendered to Employee, for the time period of September 5, 2007 to October 18, 2007.
[submitted more than 22 months after the September treatments!].

July 30, 2010, Coventry mailed an Explanation of Review letter to Dr. Jaeger, denying payment. (the appellate decision does not mention the reason for this denial).
Dr. Jaeger's office claimed they did not receive this document. It was not returned as undeliverable.

October 21, 2010, Dr. Jaeger's office contacts Conventry about the July 14 invoice and Conventry faxes a copy of their July 30 letter.

October 22, 2010, Dr. Jaeger's office files an Application for Fee Review, LIBC-507.
This Fee Review was filed 99 days after the original invoice dated July 14.
This Fee Review was filed 83 days after the July 30 letter "disputing payment'.

[In footnote 3 of the decision, the court notes that Dr. Jaeger re-submitted the bill in controversy and payments were issued on February 14 and March 2 of 2011 in the total of $4,119.73. As the original bill was $54,697.00, this is a reduction of 92.5%].

When the Bureau of Workers' Compensation receives a Fee Application, there is an "administrative review" to determine if the application is timely. If the Application is not timely, it is not processed.
A de novo hearing may be requested to address the sole issue of the timeliness of the Application.
In this case a hearing was conducted over several days, with testimony from the representatives of Dr. Jaeger, Coventry and the work comp insurer.
  
The Hearing Officer concluded that Dr. Jaeger's Application for Fee Review was not timely filed, as it was filed more than 90 days beyond the original billing date.
See: Section 306(f.1)(5), 77 P.S. 531(5).

Appeal from a Fee Review is directly to the Commonwealth Court.

Commonwealth Court Decision
Dr. Jaeger argued that his application for Fee Review was filed within 30 days of notification of the insurer's dispute, as his Application was filed one day after he received the Conventry fax on October 21, 2010.
This argument was rejected.

Section 306(f.1)(5) and Regulation 127.252(a) set forth the time periods for Application filing:
An application for fee review must be filed " no more than 30 days following notification of a disputed treatment or 90 days following the original billing date, whichever is later".

The Medical Provider has the burden of proof to establish that its application was timely filed.
Thomas Jefferson University Hospital v. Bureau of Workers' Compensation Medical Fee Review Hearing Office, 794 A.2d 999 (Pa. Cmwlth. 2002).

When a Medical Provider receives "no notification" from the work comp insurer, He must file his Application for Fee Review before the later date, the 90 days after original billing date.

Allowing the Medical Provider to file for fee review 30 days after a subsequent notification date would extend the deadline for filing, indefinitely. slip opinion page 6.

Practice Pointers:

1. At the time of C&R settlement, confirm the existence of all outstanding medical expenses. Itemize the medical expenses that will be paid as part of the settlement. Indicate which medical expenses will not be paid.

2. Where there are medical expenses in existence (before the date of settlement) affirmatively state if medical expenses will be paid. If medical expenses were denied in the past, indicate if they will be paid, or that the denial is not disputed.

3. When dealing with Medical Providers regarding billing issues, create a contemporaneous note of your discussions.