How to Challenge Medical Expenses ... without Penalties

Medical Expenses may be challenged for lack of a causal relationship to the work injury.
Where an Employee is successful in establishing all of the essential elements of a compensable work injury, the Employer must compensate the wage loss and medical expense of the injured employee.

An Employer may accept liability for a work injury by filing a Notice of Compensation Payable (NCP) (LIBC-495) or an Agreement for Compensation (LIBC-336).
Employer may accept liability only for medical expense via the preparation of the "Medical Only" section of the NCP or via preparation of a Notice of Workers' Compensation Denial (NCD), (LIBC-496).

If the Employee desires wage loss payments, after receipt of a NCD or "Medical Only NCP, the Employee must file a Claim petition.
In this context, there may still be a disagreement as to the extent of medical expenses payable for the work injury. This may be true when the employee has a "pre-existing" medical condition.

Mohawk Industries, Inc. v. WCAB (Weyant), No. 197 C.D. 2013, an unreported memorandum opinion of a panel of the Commonwealth Court of Pennsylvania, authored by Judge Cohn-Jubelirer on September 18, 2013, addressed these medical expense issues.

Factual and Procedural Background

Employee fell to the ground from his forklift, when he suffered a diabetic seizure.
Employer filed a NCD, which acknowledged the work fall, but agreed "to pay medical treatment for upper back and neck pain as a result of the fall only."

Employee filed a Claim petition alleging injury to his "upper back and neck, resulting in radiculopathy into both upper extremities".
Employee filed a Penalty petition alleging employer violated the act by failing to timely pay for treatment of the work injury.

Employee Medical expert Arnold G. Salotto, M.D. testified that pre-existing spinal stenosis, degenerative disc disease and bone spurs were aggravated as a result of the work fall and employee developed a disc herniation.

Employer Medical expert Lucian Bednarz, M.D. testified (in part) employee had neck pain as a result of the fall.

WCJ Decision
Employee's work-related fall necessitated the anterior cervical discectomy with fusion and plating by Dr. Salotto.
Employer medical witness acknowledged employee suffered neck pain as a result of the fall. Despite this testimony, Employer did not make timely payment of the surgical bills (within 30 days of submission, Regulation 127.208). A 20% penalty was assessed on the surgical bill for violation of Section 306(f.1).

Additionally, the WCJ noted some medical bills were paid by Blue Cross/Blue Shield.
WCJ ordered Employer to reimburse medical expenses paid by BC/BS. (reimburse to whom?)

Employer Appeal
1. Penalty Petition award was error as Employer never accepted liability for neck injury (NCD issued).
2. Reimbursement of medical expenses paid by BC/BS was error, as they did not file a subrogation lien.

WCAB Decision
1. Where an injury is recognized (NCD) and medical treatment reveals an additional diagnosis to the same body part, Employer bears the responsibility to prove the new diagnosis is not work-related. See: Body Shop v. WCAB (Schanz), 720 A.2d 795 (Pa. Cmwlth. 1998).

1.1 When an Employer refuses to pay medical expenses for the "new" diagnosis, the Employer accepts the risk that the WCJ may determine the treatment is work-related and assess penalties. Citing: Listino v. WCAB (INA Life Insurance Co.) 659 A.2d 45 (Pa. Cmwlth. 1995).

2. WCAB rejected employer argument regarding lack of medical insurer subrogation lien.
WCJ properly directed reimbursement of medical expenses to Claimant, even if expenses had been paid by a 3rd party. Citing: Frymiare v. WCAB (D. Pileggi & Sons) 524 A.2d 1016 (Pa. Cmwlth. 1987).

Commonwealth Court Decision
1. Medical Bill Penalty
Employer issued a NCD, "accepting" liability for the neck and back injury as a result of the work-related fall.
Employer argued it did not accept responsibility for all medical expenses.
Employer contested the work-relationship of the need for surgery, in light of the pre-existing medical conditions.
However, the WCJ found the surgery was necessitated by the work-related fall.
Once employer accepted liability for the fall injury, it had a duty to pay medical bills until there was a determination that their liability no longer exists. Slip opinion at page 6, citing Listino.

If employer disputed the causal relationship between the work injury and the medical treatment, employer could file a Review Medical Treatment petition.
[Query: would this help? The WCJ cannot grant a supersedeas as to medical expenses].
[What about filing a UR Request? Question necessity!]

Note: An employer will typically challenge the causal relationship by denying the medical expense with an Explanation of Benefits letter.
An employer will challenge the reasonableness or necessity of medical care via a Utilization Review request.

The Court held, where an employer unilaterally ceases payment of medical expenses, based solely on causation, they assume the risk of penalties if the WCJ rules the expenses are related to the work injury.
Citing: Roadway Express v. WCAB (Iwasko) 723 A.2d 1076 (Pa. Cmwlth. 1999).

2. Subrogation Lien
Employer argued it was an error to direct reimbursement to employee or BC/BS, for medical expenses already paid by BC/BS.
BC/BS did not file a subrogation lien.
Any payment to employee would be a windfall.

Court agreed, WCJ decision was ambiguous as to who should receive reimbursement.
Employer is correct, BC/BS could not receive reimbursement as it did not file a subrogation lien.
Referencing: Independence Blue Cross v. WCAB (Frankford Hospital) 820 A.2d 868 (Pa. Cmwlth. 2003).
To the extent the WCJ and WCAB directed reimbursement to BC/BS, they are in error.

The WCAB interpreted the WCJ order to direct reimbursement to employee.
However, employee never sought reimbursement for medical bills paid by his health insurer.

Court held, it is erroneous to grant employee more relief than requested.
It is prejudicial to employer, as they were not placed on notice that this relief was sought nor did employer have an opportunity to defend against this request.
Employee submitted only his unpaid medical bills for payment.
Employee submitted the paid surgical bill for assessment of a penalty.
Employer was not placed on notice that there was a request for reimbursement of the surgical bill, to employee or to BC/BS.

Commonwealth Court reversed the WCAB order for employer reimbursement of the surgical bill.

Practice Pointers
1. Determine if a medical bill will be contested on the basis of "causal relationship" or "reasonableness and necessity". The available remedies differ.

2. Recognize that a medical bill can be "denied" for lack of a causal relationship, however, an unsuccessful denial MAY result in the assessment of penalties.

3. Recall that the assessment of penalties by the WCJ is discretionary.  The WCJ may decline to assess a penalty where there is a legitimate reasonable contest. 

4. To attempt to avoid the assessment of penalties: (i) Describe the "accepted" work injury with a precise diagnosis; (ii) secure a prompt medical review and opinion regarding the extent of work related medical care. This medical evidence could be pursued via IME or URO.