Frances Keene v. WCAB (Ogden Corporation)
1421 C.D. 2010 (Pa. Cmwlth. 2010)
The Commonwealth Court reversed the decision of the Appeal Board (Board) which reversed the decision of the WCJ to deny Employer’s suspension petition.
Claimant sustained a work-related injury to her right knee when she slipped on the step of an airport passenger shuttle she was operating for Employer. Claimant underwent knee replacement surgery, has reached maximum medical improvement and is only able to perform full-time sedentary work. Claimant has a high school education with no additional training, education or experience operating a cash register or computer.
Post-surgery, Claimant began looking in the newspaper for suitable work. Claimant received job leads, and applied for every one, but was not hired.
On October 9, 2007, Employer filed a suspension petition alleging that Claimant has voluntarily removed herself from the work-force. After Employer filed the petition, Claimant applied for work as a driver for Budget and Avis rental car companies, but she was not hired.
Claimant testified regarding her attempts to obtain employment within her physical capabilities, education, training and experience. Claimant reported that she was not receiving a pension, and has never submitted a retirement statement to Employer, but does receive social security disability benefits. The WCJ accepted Claimant’s testimony that she has been actively seeking employment and found that she has not voluntarily removed herself from the workforce. Therefore, the WCJ denied Employer’s suspension petition.
Employer appealed to the Board which reversed the WCJ’s finding. The Board relied upon Claimant’s testimony that she did not apply for work for two years because it was very depressing. The Board noted “Claimant’s admitted failure to make any effort to apply for work for two years based solely on her negative feelings about the job seeking process establishes that she withdrew from the workforce by choice” thereby granting Employer’s suspension petition.
Claimant appealed to the Commonwealth Court arguing that the Board erred in concluding that her failure to look for work during a two-year period establishes that she voluntarily removed herself from the workforce. The Commonwealth Court reversed the Board.
The Court stated that an employer is not required to prove the availability of suitable work when the employer proves by a totality of the circumstances that the claimant has voluntarily retired from the workforce. SEPTA v. WCAB (Henderson), 543 Pa. 74, 79, 669 A.2d 911, 913 (1995); City of Pittsburgh v. WCAB (Robinson) 4 A.3d 1130, 1134 (Pa. Cmwlth. 2010). Once an employer proves that a claimant has voluntarily retired, the claimant may continue to receive disability benefits if the claimant shows that (1) she is seeking employment after retirement; or (2) she was forced into retirement because of the work-injury. Henderson, 543 Pa. at 79, 669 A.2d at 913.
The Board found that claimant voluntarily withdrew from the workforce because she did not look for work for two years. However, the Court noted that Claimant’s failure to seek employment is only relevant after the employer initially proves that claimant has voluntarily retired from the workforce. An employer cannot rely on a claimant’s failure to seek work to prove a voluntarily retirement from the workforce because a claimant has no duty to seek work until the employer meets its initial burden to show a voluntary retirement. Until the employer proves a voluntary retirement, the employer has a duty to make job referrals.
Contrary to Robinson, where there was no dispute that Claimant retired, accepted a retirement pension and refused suitable employment; Claimant here disputed that she is retired; had not accepted a retirement pension and has not refused suitable work. Therefore, the court reversed the opinion of the Board.
John Potere v. WCAB (KEMCORP)
1349 C.D. 2010 (Pa. Cmwlth. 2010)
The Commonwealth Court affirmed, in part, and vacated and remanded, in part the decision of the Workers’ Compensation Appeal Board (Board) which affirmed as modified the decision of the WCG granting the claim petition for the closed period from January 22, 2005, through April 12, 2005.
Claimant worked as a tractor trailer driver for Employer. On January 22, 2005, Claimant’s tractor trailer struck a snow bank and a concrete barrier after Claimant attempted to avoid a collision on an icy road. Claimant reported the accident to Employer but was able to drive home. Claimant began to experience stiffness in his neck and back, as well as numbness and tingling in his legs and in the bottom of his feet. Claimant began treating with Chiropractor Rogowski and did not return to work.
On February 10, 2005, Employer issued a notice of temporary compensation payable (TNCP) accepting liability for Claimant’s temporary medical and indemnity benefits. On March 17, 2005, Claimant attended an IME with Dr. Kahanovitz who described Claimant’s IME as objectively normal. On March 28, 2005, Claimant was sent a notice of ability to return to work. On April 13, 2005, Employer sent Claimant a letter requesting that Claimant return to his pre-injury position no later than April 20, 2005. Claimant advised Employer that he was not capable of performing his pre-injury position, and did not return to work. Employer simultaneously issued a notice stopping TNCP and a notice of workers compensation denial (NCD), citing a lack of medical documentation for any ongoing disability and Claimant’s failure to return to work.
On April 28, 2005, Claimant filed a claim petition alleging that he was totally disabled from January 23, 2005 to April 21, 2005. Employer filed a timely answer admitting that an injury took place, but denying compensable disability.
Claimant testified regarding the January 22, 2005 accident, his complaints of pain, and treatment by Chiropractor Rogowski. Claimant admitted that he declined to return to work in April 2005, and continued to receive physical therapy after his visit with Dr. Kahanovitz.
Claimant presented testimony of Dr. James Bonner who began treating Claimant on May 24, 2005. Dr. Bonner ordered a lumbar MRI (normal), a cervical MRI (no herniations but impingement at C3-4), and an EMG (normal). Following an FCE, Dr. Bonner restricted Claimant to light duty work. Dr. Bonner diagnosed Claimant with chronic pain of the musculoligamentous structures of the cervical, thoracic, and lumbar spine with a bulging cervical disc. Dr. Bonner found that Claimant had not fully recovered from his work-injury, but on cross-examination admitted that claimant had a significant psychological and subjective component to his disability.
Claimant also presented testimony of Jane Jones, a claims representative from the insurance carrier. Ms. Jones did not dispute that Claimant sustained a work-related injury. She initially issued the NTCP and issued the notice stopping and NCD based on lack of documentation regarding Claimant’s alleged ongoing disability, and the offer of work consistent with Dr. Kahonovitz’s IME, and subsequent failure to return to work.
Employer presented the testimony of Dr. Kahanovitz pertaining to his March 17, 2005 examination. Claimant had no evidence of neurological or orthopedic abnormalities at that examination. Dr. Kahanovitz diagnosed Claimant with a cervical/thoracic/lumbar strain, and recommended that Claimant undergo an exercise-oriented physical therapy program, and that Claimant should be able to return to work full duty upon completion of four weeks of physical therapy. Claimant completed four weeks of physical therapy. Dr. Kahanovitz believed that Claimant was able to return to full duty at the time of his evaluation on March 17, 2005, but recommended four weeks of physical therapy as a prophylactic and preventative measure because of the vibration involved in driving a tractor trailer.
The WCJ accepted the testimony of Dr. Kahanavitz as more credible and persuasive than the testimony of Dr. Bonner. The WCJ further accepted the testimony of Ms Jones as credible, and rejected Claimant’s testimony regarding his subjective complaints and inability to perform his pre-injury position. Based upon Dr. Kahanavitz’s testimony, the WCJ found that Claimant sustained a cervcical/thoracic/lumbar sprain and/or strain from which Claimant has recovered as of March 17, 2005. Claimant failed to sustain his burden of proving any ongoing disability beyond April 20, 2005. Thus, the WCJ denied Claimant’s claim petition and directed that all benefits be terminated as of March 17, 2005.
Claimant appealed to the Board, which affirmed in part and reversed and remanded in part. The Board affirmed the decision of the WCJ rejecting Claimant’s medical evidence. The Board reversed the WCJ’s denial of Claimant’s claim petition and his conclusion that Claimant had fully recovered from his work-injuries, and remanded for further consideration of Employer’s medical evidence. The Board noted that since Employer admitted that Claimant suffered a work-related injury, the WCJ should have granted Claimant’s claim petition and determined the extent of his disability. The Board noted that the evidence established that Claimant was at least disabled from January 22, 2005 to March 17, 2005, and that Employer only ceased paying wage loss benefits on April 20, 2005.
The Board concluded that the record lacked substantial, competent evidence to support the WCJ’s finding that Claimant fully recovered from his injury because the testimony of Dr. Kahanovitz was speculative and legally insufficient to support such a finding. The Board held that the WCJ failed to address critical issues regarding the testimony of Dr. Kahanovitz, and whether Claimant’s wage loss benefits should be suspended. The Board noted that the WCJ did not render a credibility determination with respect to certain testimony from Dr. Kahanovitz which appeared to state that Claimant was only capable of light to moderate work as of March 17, 2005. The Board essentially remanded the matter to the WCJ for a more complete credibility determination regarding Dr. Kahanovitz’s testimony.
On remand, the WCJ found Claimant capable of returning to his pre-injury position as of March 17, 2005. The WCJ again relied on the testimony of Dr. Kahanovitz in rendering his finding that Dr. Kahanovitz only recommended light duty and physical therapy for Claimant to prevent a re-injury upon Claimant’s return to work, not because Dr. Kahanovitz considered Claimant physically or medically incapable of performing his pre-injury position without restrictions as of March 17, 2005. The Judge rejected as not credible the portion of Dr. Kahanovitz’s testimony that could be interpreted to mean that Claimant required physical therapy or was restricted to light duty because he had not sufficiently recovered from his work-injury to return to his pre-injury position on March 17, 2005.
The WCJ found that Employer offered Claimant his pre-injury position on April 13, 2005, but Claimant refused the offer. The WCJ concluded that Claimant sustained his burden of establishing a work-related injury, but Employer rebutted Claimant’s ongoing disability as of April 13, 2005, the date Claimant refused the job offer. The WCJ concluded that Claimant was capable of returning to his pre-injury position, without restrictions as of March 17, 2005. Therefore, the WCJ granted the claim petition but directed that wage loss benefits be suspended as of April 13, 2005.
The Commonwealth Court again remanded the case to the WCJ to determine whether Dr. Kahanovitz’s contradictory opinions regarding his release to return to work at light duty, and recommended a month of physical therapy were equivocal. The Court noted that the WCJ erred in relying in Dr. Kahanovitz’s testimony that Claimant was capable of returning to his pre-injury position as of March 17, 2005 based upon Dr. Kahanovitz’s physical therapy restriction and light duty release for one month.
The Court also noted that the issuance of the NCD was not an illegal supersedeas because the TNCP was properly controverted pursuant to the Act. As a result, the Court determined that the WCJ did not err.
Gregory Pike v. WCAB (Veseley Brothers Moving)
1227 C.D. 2010 (Pa. Cmwlth. 2010)
The Commonwealth Court affirmed the Order of the Appeal Board (Board) which affirmed the WCJ’s determination of Claimant’s average weekly wage (AWW) pursuant to Section 309(d) of the Act.
Claimant argues that the board erred in affirming the WCJ’s calculation by including substantially lower earnings from periods before Claimant received a promotion to a higher paying position, and subtracting the expenses that Claimant listed on his 2004 tax return such as depreciation and home office.
Claimant began working for employer as a warehouse worker/laborer in June 2003 earning $8.50 an hour. On August 1, 2004, according to the claimant, he became a Class A certified driver for United Van Lines through Employer. As a Class A certified driver, rather than being paid at an hourly wage rate, he was paid a percentage of the total value of the job. The claimant acknowledged that he was given a sum of money for a job, and after the expenses were deducted, the amount left over was his income. The claimant testified that the percentage he was paid and the amount of expenses he incurred varied from job to job.
Claimant testified at the June 14, 2007 hearing and verified that when he filed his 2004 tax return, he took various deductions. The claimant confirmed that one of those deductions was for depreciation for the truck he used for business. The claimant testified that he obtained the right to use that truck through a lease agreement with Employer. The claimant said he entered into the lease agreement with Vesel[e]y’s on August 1, 2004, and that it was a one-year lease agreement. The claimant testified that he also took a deduction for the business use of his home. He testified that he started using his home for some business purposes after August 1, 2004 and stopped using his home for any business purpose some time in 2005.
The claimant testified that the new job he started with Employer as of August 1, 2004 was a permanent position. The claimant said, “The only thing that stopped it was my injury.” During cross-examination, the claimant stated that the truck that was depreciated was a 1991 Freightliner. The claimant explained that he was to make lease payments on the truck for one year and, at the end of the lease term, the buy-out fee would be zero. The claimant testified that the lease payments were approximately $505.00 per month. The claimant said that he made the lease payments for the months of August, September, and October. Then, according to the claimant, he turned the truck back to Employer because he could not afford the payments. The claimant testified that whenever he got gas for the truck and paid tolls, he used a company credit card and those expenses weretaken out of his commission.
The claimant also testified that he bought six tires for the truck and the tire expenses were also deducted from his commission. The claimant testified that, prior to his work injury, he did some work-related paperwork and computer work in his office at home.
The WCJ found that the correct average weekly wage applicable to the work injury Gregory Pike sustained on October 28, 2004 is $744.64 with a corresponding compensation rate of $496.67 per week. The Judge based his determination on the proposed wage statements which agree that the claimant’s average weekly wage for the second thirteen-week period during the 52 weeks immediately prior to the claimant’s work injury of October 28, 2004 was $306.23.
In addition, every statement of wages and proposed statement of wages that has been submitted into the record reflects that the claimant’s average weekly wage during the third thirteen-week period during the 52 weeks immediately prior to the claimant’s work injury of October 28, 2004 was $368.15.
The WCJ noted that the crux of the average weekly wage calculation issue is what should be considered the claimant’s average weekly wage for the fourth period of thirteen weeks during the 52-week period immediately prior to the claimant’s work injury of October 28, 2004. The WCJ calculated the claimant’s average weekly wage for the fourth period of 13-weeks to be $1,559.54.
In reaching the figure of $1,559.54, the WCJ took the claimant’s gross earnings of $50,150.00 as reported on the 1099 he was issued for 2004 and from those gross earnings, $29,876.00 was deducted. The $29,876.00 represents the total amount Claimant claimed as business expenses on the Schedule C that was filed with his 2004 income tax return, including the $596.00 expense he claimed for the business use of his home.
After subtracting $29,876.00 in claimed business expenses from the claimant’s total gross earnings of $50,150.00, the WCJ arrived at a difference of $20,274.00. Dividing the $20,274.00 by 13 to arrive at an average weekly wage figure of $1,559.54 for the fourth period of thirteen weeks during the 52-week period immediately prior to the claimant’s work injury of October 28, 2004.
The WCJ added together the claimant’s average weekly wages for the second period ($306.23), third period ($368.15) and fourth period ($1,559.54) and arrived at a total of $2,233.92. The WCJ divided this sum by three and arrived at an average weekly wage of $744.64 and a resulting total disability compensation rate of $496.67.
Claimant alleged that some of the business expenses he declared for deductions on his 2004 tax return should actually be added back onto his income for purposes of calculating his pre-injury average weekly wage, like the depreciation deduction and expenses he declared for business, but the WCJ noted that Claimant never filed an amended return; therefore, he was bound by the filed return.
Claimant appealed to the Board which concluded that the WCJ committed no error in failing to apply Hannaberry HVAC v. WCAB (Snyder), 575 Pa. 66, 834 A.2d 524 (2003)because Claimant’s situation did not involve a transition from part-time to full-time employment; and the WCJ found that the evidence did not establish that the Claimant’s earnings from August 4, 2004 to October 28, 2004 were representative of wages that Claimant had a reasonable expectation of making throughout the year.
The Board also agreed with the WCJ’s determination that Claimant was bound by the tax return that he filed, and that the deductions for depreciation of the truck and home office business should be subtracted from his total gross earnings for the AWW determination. There was no evidence that Claimant ever filed an amended tax return, recanting any entitlement to the business expenses he declared, so Claimant was “bound by his actual return.”
Claimant appealed to the Commonwealth court alleging that the Board erred by failing to apply the principles of Hannaberry to calculate Claimant’s AWW based on the quarter most reflective of his new economic reality given his promotion; and by failing to add back the depreciation and home office business use deductions Claimant had subtracted from his income on the tax return.
Claimant argues that Section 309 (d.1) should be applied to calculate his average weekly wage since Section 309 (d) does not provide an accurate reflection of his earnings. InHannaberry the Court noted that “subsection (d) does not control the calculation in a circumstance where it would lead to a grossly and demonstrably inaccurate measure of a workers weekly wage” Id. at 82-83.
The Court summarized recent Commonwealth court decisions pertaining to AWW calculations and noted that “subsections (d) and (d.1) apply to claimants with long-term employment because they ‘look back’ to the previous fifty-two weeks of employment.” Burkhart Refractory Installation v. WCAB (Christ), 896 A.2d 9 (Pa. Cmwlth. 2006). However, “in contrast, (d.2) applies to recently hired employees because it ‘looks forward.’” Id.
The Court applied Section 309(d) based on the record because the WCJ did not find sufficient evidence of record from which to conclude with any degree of certainty, that Claimant’s forth period earnings as a commissioned certified driver were indicative of what he would have earned had he not been injured. Claimant’s earnings as a commissioned driver were percentages of jobs and varied subject to the availability and frequency of jobs and size of a certain job. Claimant testified that he received a percentage of the total value of the job and that percentage could depend on the weight load.
The WCJ made no factual finding that Claimant’s forth period earnings were demonstrative of future earnings. There was no evidence of record to show what a Class A certified driver typically earned in commissions, or whether Claimant’s earnings for that period were indicative of other commissions during other periods of the year. Therefore, the WCJ did not err in applying Section 309 (d) to calculate Claimant’s AWW.
Claimant also argued that the WCJ improperly subtracted Claimant’s tax return deductions for depreciation and home office business expense use which artificially lowered his earnings. However, Claimant testified that his net income in 2004 was $20,274. This net income reflected the subtraction of the depreciation expense of $4,200.00 and the home office expense of $596.00.
Because Claimant, himself, established his expenses in arriving at his business income on his tax return and produced this tax return as evidence of his business income, but did not produce any additional evidence before the WCJ to show why his net income should be increased by excluding the depreciation deductions at issue; the court concluded, therefore, that the WCJ did not err in relying on Claimants’ tax return.
Additionally, the Claimant argued that the deductions must be pro-rated to the relevant quarter. However, as the court noted, the only quarter that Claimant worked as a commissioned driver was the last quarter of the relevant period. As such, there is no dispute as to which quarter the depreciation and business home use deductions were attributed.
Claimant also argued that it was not logical for the WCJ to refuse to “add back” the depreciation deductions simply because the Claimant never filed an amended return. The court noted that Claimant had the opportunity to present sufficient evidence that the deductions for business expenses on his tax return should not have been subtracted by the WCJ from his commission earnings in calculating his net income, but the WCJ found that Claimant never presented such evidence.
The Court found that the WCJ’s AWW calculation had requisite support in the record by Claimant’s tax return and testimonial evidence.
Crozer Chester Medical Center v. Department of Labor and Industry
59 MAP 2008 (Pa. May 25, 2011)
This decision was handed down by the Pennsylvania Supreme Court on May 25, 2011.
The issue before the Supreme Court, was whether the Commonwealth Court should have compelled the Department of Labor and Industry (Department) under a writ ofmandamus to reach the merits of a fee review petition filed by Crozer Chester Medical Center (Crozer).
The Commonwealth Court declined to issue the writ, concluding that the Department correctly dismissed as premature Crozer’s application for fee review.
The Supreme Court affirmed the decision of the Commonwealth Court which found that the Department did not err in applying Section 306 (f.1)(5) of the Act and Regulation 127.255.
In December 2005, claimant William Radel suffered a work-related injury while lifting a bundle of rebar for employer Re-Steel Supply Company, Inc. In January 2006, employer issued a medical-only notice of compensation payable (NCP), voluntarily accepting liability for an injury described as a hernia. Claimant underwent surgery to repair an umbilical hernia at Crozer in February 2006.
On March 20, 2007, Crozer sent records and billed employer’s insurer, Zurich North American Insurance Company (Zurich), for the treatment, and Zurich reportedly did not pay the medical care provider’s bill. Crozer alleged that “In violation of 34 Pa. Code § 127.208, within thirty three(33) days after said submission, Zurich neither paid [Crozer]’s bill nor did it issue a denial of payment.”
According to the mandamus petition, Crozer filed an application for fee review on May 23, 2007. In March 2008, the Department rejected and returned the application aspremature, because it found that there was “an outstanding issue of liability/compensability for the alleged injury.” The Department also denied Crozer’s request for a de novoadministrative hearing.
Consequently, the medical care provider filed its mandamus petition with the Commonwealth Court. In June 2008, the Department filed preliminary objections requesting dismissal of Crozer’s petition on several grounds, including that mandamus was not an appropriate remedy here because the medical care provider failed to establish a clear right to relief, and the medical care provider sought to compel an exercise of discretion rather than a ministerial act.
Crozer responded with its own preliminary objections, asserting that the Department was seeking demurrer relief on the basis of documents supplementing the petition for review, contrary to the prohibition against speaking demurrers. Specifically, Crozer objected to the Court’s consideration of a letter and two faxes from Zurich’s claims adjuster and to a February 2006 notice from the Department, which informed Crozer that Claimant’s claim had been denied.
Following a hearing, the Commonwealth Court sustained Crozer’s preliminary objections and stated that it would not consider any exhibits attached to the Department’s filing. But, the Court also sustained the Department’s substantive objections and dismissed Crozer’s mandamus petition. Crozer filed a direct appeal to the Supreme court.
Crozer claims on appeal that its mandamus action was improperly dismissed because the averments in its petition established the Department’s mandatory duty to issue (and Crozer’s clear legal right to receive) a determination on the merits of the fee review application.
Crozer argues that Zurich issued a medical-only NCP, which had not been modified or terminated at the time of the medical treatment and, thus, pursuant to the Act, the NCP constituted a voluntary and binding admission of liability for Radel’s umbilical hernia.
According to Crozer, because Zurich is precluded from terminating benefits unilaterally or retroactively, the existence of an “open” NCP at the time of Radel’s treatment is an “unequivocal admission” that Zurich must pay Crozer. Thus, the medical care provider disputes the Department’s conclusion that an unresolved issue of liability remained at the time of the fee review application.
In view of the “open” NCP, Crozer alleges, the Department was not faced with making any legal determination of Zurich’s liability as part of its fee review. The Department responded that Crozer improperly sought mandamus to compel exercise of the Department’s discretion in a particular manner. Specifically, the Department argues that Zurich denied liability, but that Crozer nonetheless sought to force the Department to decide that the “open” NCP estopped Zurich from denying liability.
According to the Department, deciding whether the NCP is “open,” whether Zurich’s denial was proper, and whether Crozer was entitled to payment under the circumstances, “far exceeds the jurisdiction and administrative capabilities of the fee review authorities.”
The Department further notes that, although ill-equipped to do so, the Department’s hearing officer would be required to determine the credibility of insurers and providers,inquire into whether the NCP included the treatment billed by the provider, resolve whether the NCP was rescinded, accurate, or authentic, and determine issues of estoppel. The Department maintains that, in view of these inherent practical challenges, the regulatory prohibition against litigating liability within the context of the fee review process is sensible. The Department argues that issues of liability, even where an “open” NCP exists, are better litigated before workers’ compensation judges, pursuant to the Act and relevant regulations.
In dismissing Crozer’s petition for mandamus, the Commonwealth Court explained that Crozer’s petition indicated that Zurich was disputing liability for the injury. According to the court, Crozer essentially argued that “when an insurer’s denial of liability appears to violate the [Act], the Department should be required to make a determination.” Crozer Chester Med. Ctr. v. Dep’t of Labor & Indus., 955 A.2d 1037, 1042 (Pa. Cmwlth. 2008).
Specifically, in the court’s view, Crozer maintained that Zurich’s denial violated the Act in light of the “open” NCP. The court rejected Crozer’s mandamus argument, concluding that to grant Crozer relief would entail requiring the Department to exercise legal judgment and evaluate the credibility of witnesses, the legal effect of documents and of other evidence. Thus, the panel recognized that Crozer “[was] not attempting to enforce a right which ha[d] been established beyond peradventure, but [was] seeking to have [the court] direct the Department to determine the issue of liability in [Crozer]’s favor.” Id. The Commonwealth Court therefore held that Crozer had failed to plead a legally cognizable claim in mandamus. Id.
In a claim for mandamus relief, the controlling question is whether the factual averments in Crozer’s petition for review are legally sufficient to state a cause of action formandamus in light of the relevant provisions of the Act and the regulations of the Department. A mandamus action lies only “to compel official performance of a ministerial act or mandatory duty where there is a clear legal right in the plaintiff, a corresponding duty in the defendant, and a lack of any other adequate and appropriate remedy at law. . . . While mandamus will not ordinarily lie to compel a series of particular acts or conduct or to compel the performance of a particular discretionary act, it is available to direct that discretion be exercised.” Delaware River Port Auth. v. Thornburgh, 493 A.2d 1351, 1355-56 (Pa. 1985) (internal citations omitted).
The Commonwealth Court sustained the preliminary objections of the the Department, holding that Crozer’s petition failed to plead a legally cognizable claim in mandamus. The court found that the Department acted properly in dismissing Crozer’s fee review application as premature pursuant to the Department’s Regulation 127.255(1).
Regulation 127.255 provides that:
The Bureau will return applications for fee review prematurely filed by providers when one of the following exists:
(1) The insurer denies liability for the alleged work-injury
(2) The insurer has filed a request for utilization review of the treatment under Subchapter C (relating to medical treatment review).
(3) The 30-day period allowed for payment has not yet elapsed, as computed under § 127.208 (relating to time for payment of medical bills). 34 Pa. Code § 127.255 (premature applications for fee review).
Pursuant to Section 306(f.1) of the Act, the employer of a qualified injured employee, or claimant, “shall” pay for the reasonable surgical and medical services provided by physicians or other health care providers as and when needed. 77 P.S. § 531(1)(i). The Act shields a claimant with a compensable work injury from liability to a medical care provider for the cost of treatment, and places the onus on the employer, acting independently or through its insurer, to make timely payments to medical care providers for such costs. 77 P.S. § 531(5), (7).
Additionally, Section 306(f.1)(5) protects the financial interests of both claimants and medical care providers by mandating payment for any undisputed treatment in a timely manner. 77 P.S. § 531(5). Indeed, insurers are required to pay interest on untimely payments to the medical care provider, and may be subject to penalties to the claimant for unreasonable delays in paying compensation. See 77 P.S. §991(d) (penalties); 34 Pa. Code § 127.210 (interest on untimely payments); Hough v.WCAB. (AC&T Companies), 928 A.2d 1173, 1179-81 (Pa. Cmwlth. 2007), appeal denied,
940 A.2d 367 (Pa. 2007)
Crozer contends that an open NCP is Zurich’s unequivocal admission of liability for the December 2005 injury. As a result, Crozer contests that the Department should have reached the merits of the fee review application.
The Supreme Court disagreed, noting that in Crozer’s own averments, Zurich was disputing liability. The NCP is an agreement between an employer or an insurer and a claimant regarding liability for the claimant’s injury. See 77 P.S. § 731 (NCP issued to “employe or his dependent”). But, liability for an injury is distinct from liability for a particular treatment or its cost. The NCP, even if “open” and binding with respect to liability for the injury, is not dispositive as to the medical care provider’s claim for reimbursement for the cost of a particular treatment.
As a result, here, the so-called “open” NCP does not bar Zurich from disputing liability for payment to Crozer for Radel’s February 2006 surgery. Thus, the “open” NCP simply cannot be construed as compelling a fee review on the merits if an insurer, rightly or wrongly, refused payment. See Catholic Health Initiatives, 720 A.2d at 511; 34 Pa. Code § 127.255.
The Court noted that it is apparent from Crozer’s mandamus petition that the present dispute is not capable of resolution through the Section 306(f.1)(5) fee review process. Fee review is a process for medical care providers to dispute “the amount or timeliness” of an insurer’s payment for a particular treatment, which are relatively simple matters. 77 P.S. § 531(5).
However, Crozer’s petition contains no allegations that the medical fee had not been paid timely or had not been calculated in accordance with the compensation fee schedule or medical billing protocols. See 34 Pa. Code §§ 127.208, 127.210 (timeliness provisions); 127.101-127.135, 127.151-127.162, 127.205-127.207 (amount calculation provisions). Crozer is seeking, instead, to establish the broader legal proposition that Zurich’s failure to pay was unwarranted and that the Department’s fee review personnel were obliged to make that determination. Such a decision is outside the scope of what is designed to be a simple fee review process.
As a result, the Supreme Court determined that the Department did not err in construing Zurich’s refusal to pay Crozer’s bill for Radel’s February 2006 surgery to be a denial of liability for the treatment. Thus, the Department did not err in concluding that Crozer’s application did not raise either of the two narrow issues appropriate for fee review.
Rather, Crozer sought a legal decision from nonqualified personnel within the Department on whether it was entitled to payment at all in view of the so-called “open” NCP. This type of decision is properly viewed as the province of specially qualified workers’ compensation judges, to be rendered within the context of claimant/insurer litigation.
Therefore, Crozer’s mandamus petition seeking to compel a decision on the fee review application was properly rejected by the Department pursuant to the Act and Regulation 127.255(1).
The Supreme Court held that Crozer did not have a clear right to a decision of its fee review application on the merits because: (1) the provider alleged that Zurich disputed liability by refusing payment; and (2) the provider challenged the propriety of Zurich’s denial rather than the amount or timeliness of payment for a particular treatment.
Therefore, the allegations in Crozer’s petition for review did not state a cause of action in mandamus. The Department did not err in applying Section 306(f.1)(5) of the Act and Regulation 127.255, and thereby dismissing as premature the application for fee review filed by appellant Crozer. The Commonwealth Court’s decision was affirmed.
Dissenting opinion of Justice Baer (joined by Justice Todd and Justice McCaffery)
Justice Baer dissented, because there was an open NCP, and because there was no written denial by Zurich as to why the medical treatment was not paid, and a UR was never requested. Therefore, Justice Baer concluded that since the NCP constituted an admission of liability, Provider is entitled to an administrative decision on the merits of the review petition.
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