San Diego Unified School Dist. v. WCAB CA4/1 ( 2013 )

Filed 11/18/13 San Diego Unified School Dist. v. WCAB CA4/1
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
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COURT OF APPEAL, FOURTH APPELLATE DISTRICT
DIVISION ONE
STATE OF CALIFORNIA
SAN DIEGO UNIFIED SCHOOL D063602
DISTRICT et al.,
Petitioners,
WCAB Case No. SDO 0285383
v. (SDO 0285383)
WORKERS' COMPENSATION APPEALS
BOARD et al.,
Respondents.
Petition for writ of review of a decision of the Workers' Compensation Appeals
Board. Affirmed.
Michael Sullivan & Associates and Rosa Williams for Petitioners.
Neil P. Sullivan and James T. Losee for Respondent Workers' Compensation
Appeals Board.
Procopio, Cory, Hargreaves & Savitch LLP, Anthony J. Dain and Brian J.
Kennedy for Respondent Point Loma Surgical Center, L.P.
San Diego Unified School District and its claims administrator, York Risk
Services Group, Inc. (together the District), petition for a writ of review after the
Workers' Compensation Appeals Board (the Board) granted reconsideration and affirmed
a decision of the workers' compensation administrative law judge (the WCJ) in favor of
lien claimant Point Loma Surgical Center, L.P. (Point Loma). The District contends
(1) substantial evidence does not support the Board's determination of the reasonable
value of the medical services Point Loma provided to an injured District employee; and
(2) the Board erroneously granted Point Loma pre-award interest on the amount of the
services for which the District refused to pay, because the statute and regulations
authorizing interest that were in effect when payment for the services became due have
since been repealed. We reject the first contention, conclude the District waived the
second, and therefore affirm the Board's decision.
FACTUAL AND PROCEDURAL BACKGROUND
James Findlay was employed by the District when he sustained a work-related
injury to his thoracic and lumbar spine. In 2002, a physician working at Point Loma gave
Findlay three epidural injections. Point Loma billed the District $5,980 for these
injections, but the District paid only $779.88.
Point Loma filed with the Board a notice and request for allowance of lien in the
amount of $5,200.12, the balance due on the bill for Findlay's epidural injections. Point
Loma and the District proceeded to a hearing before the WCJ to determine the reasonable
value of the injections.
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At the administrative hearing, Point Loma introduced a document summarizing
amounts charged and paid in 2002 for epidural injections by hospitals and surgery centers
in the Los Angeles area, which showed the average payment amount was $3,877.74. The
District also introduced a document listing amounts billed and paid for epidural injections
by other facilities, and called Andy Beltowski, a director of claims resolution for
WellComp Managed Care Services (WellComp), to testify as an expert about the
reasonable value of such injections. The billed amounts in the District's prepared
summary ranged from $500 to $2,500, but actual bills submitted by the District ranged
from $1,100 to $2,500, and Beltowski testified he "has seen bills in the $3,000 to $4,000
range." Beltowski explained that WellComp calculated the amount it paid for an
outpatient epidural injection by multiplying the amount listed in Medicare's ambulatory
surgery center schedule by 2.5 and then rounding up to the nearest $100. He further
explained that when multiple epidural injections are given at the same time, the first
injection is paid at 100 percent of the base charge, and subsequent injections are paid at
50 percent. Using this methodology and the fact that Medicare paid $323 for an epidural
injection in 2002, Beltowski testified that WellComp would have paid a total of $1,800
for the three injections Findlay received.
Based on the evidence introduced at the hearing, the WCJ found that $1,650 was
the reasonable value of an epidural injection. The WCJ then used the methodology
proposed by Beltowski and awarded Point Loma $3,300, less the $779.88 the District
previously paid, for the three injections given to Findlay. The WCJ also awarded Point
Loma statutory penalties and pre-award interest under Labor Code section 4603.2.
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The District petitioned the Board for reconsideration of the WCJ's award on the
grounds that the amount awarded for the epidural injections was not supported by the
evidence, and penalties and pre-award interest should not have been awarded because
Point Loma's lien claim was not properly documented. The WCJ filed a report
recommending that reconsideration be granted on the award of statutory penalties,
because when Findlay received his epidural injections "there [was] no pre-determined
rate which could trigger the imposition of a pre-award penalty." (See Lab. Code,
§ 4603.2, subd. (b)(2) [authorizing 15 percent penalty when employer does not timely
pay properly documented claim for service charged at rate on official medical fee
schedule].) The WCJ also recommended that reconsideration be denied on the District's
evidentiary claim and on the award of interest, which the WCJ stated was due under
statutory and regulatory provisions quoted in footnote 1, post. Adopting the WCJ's
recommendations, the Board granted reconsideration to eliminate the award of penalties
from the WCJ's award and otherwise affirmed the award.
DISCUSSION
A. Substantial Evidence Supports the Board's Finding as to the Reasonable Value of
the Epidural Injections
The District complains substantial evidence does not support the Board's finding
of the reasonable value of the epidural injections Findlay received at Point Loma because
the Board "arrived at a sum independent of amounts proposed by either [party]," even
though the District introduced "overwhelming evidence showing an amount above $1,800
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is unreasonable" and Point Loma failed to prove its charges were reasonable. We
disagree.
"The [B]oard's findings on factual questions are conclusive if supported by
substantial evidence." (Braewood Convalescent Hospital v. Workers' Comp. Appeals Bd.
(1983) 34 Cal. 3d 159, 164.) The term "substantial evidence" means evidence that is
reasonable in nature, credible, and of solid value and that a rational person might accept
as sufficient to support a conclusion. (Ibid.; County of Kern v. Workers' Comp. Appeals
Bd. (2011) 200 Cal. App. 4th 509, 516.) In determining whether substantial evidence
supports the Board's factual findings, we must consider the entire record. (LeVesque v.
Workmen's Comp. App. Bd. (1970) 1 Cal. 3d 627, 637; County of Kern, at pp. 516-517.)
The evidence introduced at the hearing was sufficient to support the Board's
finding as to the reasonable value of Findlay's epidural injections. In determining the
reasonable value of services, the trier of fact is not required to choose the figure proposed
by either party or "adopt exactly the view of any expert witness as to value. The trier of
fact may accept the evidence of any one expert or choose a figure between them based on
all of the evidence." (Liberty Mut. Ins. Co. v. Industrial Acc. Com. (1948) 33 Cal. 2d 89,
94.) Here, Point Loma did not submit any expert testimony as to reasonable value in
support of its lien claim. Instead, it submitted its bill in the full amount of $5,980 and
documentary evidence that the average amount Los Angeles area hospitals accepted as
payment for an epidural injection was $3,877.74, which the WCJ noted was "within
range of [Beltowski's] analysis for inpatient procedures in San Diego." In opposition to
Point Loma's claim, Beltowski, the District's expert witness, testified the reasonable value
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of an epidural injection was $900, and the reasonable value of three injections given on
the same occasion was $1,800 — $900 for the first one plus 50 percent of $900 (i.e.,
$450) for each of the other two. Beltowski admitted, however, that he had seen bills for
epidural injections ranging from $1,100 to $4,000, and documents introduced by the
District contained actual bills ranging from $1,200 to $2,500. Thus, based on the entire
record, the Board could find that $1,650 (a figure within the range acknowledged by
Beltowski) was the reasonable value of an epidural injection, and then use Beltowski's
proposed methodology to calculate the reasonable value of the three injections given to
Findlay on the same occasion as $3,300. (See ibid.)
B. The District Waived Its Contention That the Board Erroneously Awarded Point
Loma Pre-Award Interest
The District contends the Board erred by awarding Point Loma interest on the
unpaid amount of Findlay's bill retroactive to the date payment was due. The District
acknowledges that under statutory and regulatory provisions in effect when Findlay's bill
became due, the Board could award interest on contested amounts retroactive to the date
payment became due.1 The District argues, however, that the subsequent repeal of these
1 In 2002, Labor Code section 4603.2, former subdivision (b) provided: "If an
employer contests all or part of a billing, any amount determined payable by the appeals
board shall carry interest from the date the amount was due until it is paid." (Stats. 1990,
ch. 770, § 3, p. 3471.) This language was repealed in 2006. (See Stats. 2006, ch. 69,
§ 24, pp. 1120-1121.)
In 2002, a related regulation provided: "Any contested charge for medical
treatment provided or authorized by the treating physician which is determined by the
appeals board to be payable shall carry interest at the same rate as judgments in civil
actions from the date the amount was due until it is paid." (Cal. Code Regs., tit. 8,
§ 9792.5, former subd. (f); see Register 2002, No. 24.) This language was deleted from
the regulation in 2011. (See Cal. Code Regs., tit. 8, § 9792.5; Register 2011, No. 16.)
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provisions deprived the Board of the power to award interest on an amount it determined
to be payable. As we shall explain, this argument is deemed waived because it was not
presented to the Board.
Under Labor Code section 5904, "The petitioner for reconsideration shall be
deemed to have finally waived all objections, irregularities, and illegalities concerning
the matter upon which the reconsideration is sought other than those set forth in the
petition for reconsideration." (Italics added.) "The policy motivating that section is to
give the appeals board an opportunity to rectify its referees' errors." (U.S. Auto Stores v.
Workmen's Comp. App. Bd. (1971) 4 Cal. 3d 469, 477 (U.S. Auto Stores).) In its petition
for reconsideration before the Board, the District challenged the award of interest on
factual grounds, namely, that Point Loma had "failed to satisfy its burden of proving it
submitted a 'properly documented' lien and failed to satisfy its burden of proving that [the
District] failed to object or pay timely." The District did not challenge the award of
interest before the Board on the legal grounds that it raised in its petition for writ of
review before this court, namely, that the Board "acted without or in excess of its powers
when it determined it had the discretion to order [the District] to pay interest based on
repealed regulatory language." (Capitalization omitted.) Such "[l]egal arguments
omitted from the petition for reconsideration before the [Board] and raised for the first
For services rendered prior to January 1, 2004, the regulation now provides: "(1) Claims
administrators shall pay any uncontested amount within sixty days after receipt of the
bill, and [¶] (2) Any amount not contested within the thirty working days or not paid
within the sixty day period shall be increased 10% and shall carry interest at the same rate
as judgments in civil actions retroactive to the date of receipt of the bill." (Cal. Code
Regs., tit. 8, § 9792.5, subd. (e).)
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time on review are waived under section 5904 and Heath v. Workmen's Comp. App. Bd.
(1967) 254 Cal. App. 2d 235." (Green v. Workers' Comp. Appeals Bd. (2005) 127
Cal. App. 4th 1426, 1446, fn. omitted; see also U.S. Auto Stores, at p. 477 [legal issue
raised in statement of facts but not discussed in argument was waived]; Fireman's Fund
Ins. Co. v. Workers' Comp. Appeals Bd. (2010) 189 Cal. App. 4th 101, 109, fn. 2
[argument specific statute relieved insurer of joint and several liability was waived even
though liability issue was generally raised]; Heath, at pp. 238-239 [argument
apportionment of permanent disability was not supported by physician's erroneous
medical history was waived even though issue of apportionment was generally raised].)
The District contends there was no waiver because it did not learn of the specific
basis of the award of interest until the WCJ issued her report on the petition for
reconsideration. We disagree. In a report issued November 7, 2012, the WCJ stated
interest on the amount determined to be payable was due under Labor Code
section 4603.2 and California Code of Regulations, title 8, section 9792.5,
subdivision (f). The Board did not issue its decision on the District's petition for
reconsideration until February 1, 2013. The District thus had nearly three months to
request permission to file a supplemental petition to alert the WCJ to any error she might
have committed by relying on repealed statutory and regulatory provisions. (See Cal.
Code Regs., tit. 8, § 10848.) The District also could have raised the repeal issue in a
petition for reconsideration of the Board's decision. (See Lab. Code, § 5911; Argonaut
Ins. Co. v. Industrial Acc. Com. (1961) 189 Cal. App. 2d 23, 27.) Having thus failed "to
give the [B]oard an opportunity to rectify [any] errors" (U.S. Auto Stores, supra, 4 Cal. 3d
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at p. 477), the District "shall be deemed to have finally waived all objections,
irregularities, and illegalities concerning the [award of interest]" (Lab. Code, § 5904,
italics added).
The District's related contention that Point Loma did not satisfy its burden of
proving it was owed interest also has no merit. Under the regulation cited by the WCJ as
authorizing the award of interest, "Any contested charge for medical treatment provided
or authorized by the treating physician which is determined by the appeals board to be
payable shall carry interest at the same rate as judgments in civil actions from the date the
amount was due until it is paid." (Cal. Code Regs., tit. 8, § 9792.5, former subd. (f),
italics added; see fn. 1, ante.) The "contested charge" was established at the
administrative hearing by Point Loma's submission of the physician's report describing
Findlay's epidural injections, its submission of the $5,980 bill for those injections, and the
parties' stipulation that the District had paid only $779.88 for them. Of the contested
amount, the Board affirmed the WCJ's determination, based on the evidence submitted by
the parties at the administrative hearing, that $2,520.12 was payable. Accordingly, Point
Loma was entitled to pre-award interest on that amount under the regulation cited by the
WCJ.
C. Point Loma's Motion to Strike Portions of the District's Reply Brief Is Denied
Point Loma filed a motion to strike portions of the District's reply brief that raise
new arguments and refer to facts outside the record, which the District has not opposed.
Among the arguments the District urged in its reply brief and at oral argument, but that it
did not urge in its petition for writ of review, is the argument that Point Loma is not
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entitled to interest because it did not submit a "properly documented" lien to the claims
handler. Because we need not consider arguments raised for the first time in a reply brief
or consider facts outside the record, rather than strike the offending portions of the reply
brief, we simply disregard them. (Cal. Rules of Court, rule 8.204(e)(2)(C); Brakke v.
Economic Concepts, Inc. (2013) 213 Cal. App. 4th 761, 765; Hawran v. Hixson (2012)
209 Cal. App. 4th 256, 268.) The motion is therefore denied as moot.
DISPOSITION
The decision of the Board is affirmed.
IRION, J.
WE CONCUR:
MCCONNELL, P. J.
HUFFMAN, J.
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