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.