E. Dixon v. WCAB (Medrad, Inc.)

IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Edward Dixon, :
Petitioner :
:
v. :
:
Workers’ Compensation Appeal :
Board (Medrad, Inc.), : No. 2277 C.D. 2015
Respondent : Submitted: July 15, 2016
BEFORE: HONORABLE ROBERT SIMPSON, Judge
HONORABLE ANNE E. COVEY, Judge
HONORABLE BONNIE BRIGANCE LEADBETTER, Senior Judge
OPINION NOT REPORTED
MEMORANDUM OPINION BY
JUDGE COVEY FILED: October 21, 2016
Edward Dixon (Claimant) petitions this Court for review of the
Workers’ Compensation (WC) Appeal Board’s (Board) October 14, 2015 order
affirming the Workers’ Compensation Judge’s (WCJ) decision denying Claimant’s
Petition for Utilization Review (UR Petition) and Petition for Penalties (Penalty
Petition) against Medrad, Inc. (Employer). The issues before this Court are: (1)
whether the WCJ erred in denying Claimant’s UR Petition when Employer failed to
serve a copy of the review request upon Claimant’s counsel; (2) whether the WCJ
erred by denying Claimant’s Penalty Petition; and, (3) whether the WCJ erred by not
awarding attorney’s fees. After review, we affirm.
On December 26, 2002, Claimant suffered a work-related cervical strain
when he slipped and fell on snow. Claimant received weekly WC benefits pursuant
to a notice of temporary compensation payable that was later converted to a notice of
compensation payable (NCP) by operation of law. By January 9, 2013 WCJ decision,
Claimant was awarded 30 weeks of disfigurement benefits relating to his cervical
surgery scar. See Reproduced Record (R.R.) at 21a-22a. The WCJ’s January 9, 2013
decision also suspended Claimant’s wage loss benefits effective July 25, 2011, due to
his refusal of work offered within his physical abilities. See R.R. at 9a-22a.
However, Employer remained responsible for Claimant’s reasonable and necessary
medical bills. Attorney Nariman P. Dastur (Attorney Dastur) represented Claimant at
the suspension proceeding.
On January 22, 2013, Employer filed a Utilization Review Request (UR
Request) with the Department of Labor and Industry’s Bureau of Workers’
Compensation (Bureau) for review of Claimant’s office visits, physical therapy,
chiropractic treatment, pain management, and all prescription medications provided
by Jeffrey Reyer, D.O. (Dr. Reyer) beginning November 13, 2012. See R.R. at 100a-
102a. The UR Request (Form LIBC-601) listed Claimant’s and Dr. Reyer’s names
and addresses,1 but did not list the name and address of Claimant’s or Employer’s
counsel in the designated spaces. See R.R. at 100a.
The Bureau assigned Employer’s UR Request to utilization review
organization Rehabilitation Planning, Inc. (URO). See R.R. at 109a. The Bureau’s
January 29, 2013 Notice of Assignment of Utilization Review Request (Notice)
reflects that Claimant was advised of the assignment, and was further informed:
NOTICE TO EMPLOYEE: You may submit a written
[p]ersonal [s]tatement to the [URO] shown on this Notice.
See enclosed “Notice to Injured Employee” for instructions.
You may have an attorney assist you in preparing your
written personal statement. If the determination of this
Utilization Review is that your treatment under review is
unreasonable or unnecessary[,] it may result in these
1
Claimant’s postal address was changed due to the installation of a new 9-1-1 system.
Claimant’s residence, however, remained the same. See R.R. at 86a-87a. The January 9, 2013 WCJ
decision was mailed to Claimant’s current postal address. See R.R. at 9a, 100a.
2
treatments not being paid. When you receive the
Determination, you may appeal the results in accordance
with the instructions you receive on the Utilization Review
Determination Face Sheet [(UR Face Sheet)] (LIBC-604).
R.R. at 109a (emphasis added). The Notice was also sent to Dr. Reyer with the
following instructions:
NOTICE TO HEALTH CARE PROVIDER: You must provide all
necessary records to the URO within thirty (30) days of the
date of its request. If you fail to do so, the URO may
proceed with its review, resulting in a determination against
your interest. You, or your agent, must verify that, to the
best of your knowledge, the medical records provided to the
URO constitute the true and complete medical chart as it
related to [Claimant’s] work injury.
R.R. at 109a.
According to the UR Face Sheet, the URO received the assignment from
the Bureau on January 29, 2013. The UR Face Sheet contains the following question:
“Was an employee statement received?” The “No” box was checked. R.R. at 103a.
Michael Ziev, D.O. (Dr. Ziev) evaluated Employer’s UR Request for the URO.
On April 4, 2013, Dr. Ziev issued the following Utilization Review
Determination (UR Determination):
Reasonableness and Necessity of Treatment Under Review
Reasonable and Necessary Care: . . .
Office visits 12/26/2012 and 1/23/2013 for medication
renewals - only these dates
Oxycodone HCL 15mg # 120 one tablet every 6 hours as
needed for pain - 12/26/2012 and 1/23/2013 - only.
Unreasonable and Unnecessary Care: . . .
Any and all care not specifically mentioned above.
3
R.R. at 106a. The UR Determination specified that Dr. Reyer “did not request a
phone consultation,” and that Claimant did not submit a statement for review. R.R. at
106a.
On May 2, 2013, Attorney Dastur timely filed the UR Petition, appealing
from Dr. Ziev’s UR Determination on Claimant’s behalf. See R.R. at 32a-33a. On
the same day, Attorney Dastur filed the Penalty Petition, wherein Claimant averred
that “Employer has violated Section 127.452(b) of the Bureau’s Regulations[, 34 Pa.
Code § 127.452(b),] by failing to notify Claimant’s counsel of its UR Request.” R.R.
at 24a. Employer filed an answer to Claimant’s Penalty Petition, stating therein:
Denied in part, the out[-]of[-]state claims representative did
not knowingly or intentionally omit [Claimant’s] counsel
and [E]mployer[’s] counsel information from the LIBC[-
]601 form, as the claim representative was unfamiliar with
this form[.] [T]he form was not completely prepared[,]
however[,] the [UR Request] was accepted by the [Bureau]
and assigned to a [URO]. The medical provider [(Dr.
Reyer)] received the [UR Request], the [Notice] and the
[UR Determination] in a timely fashion. As [Claimant]
filed a timely [UR Petition,] [his] rights were not
compromised or infringed. There is no prejudice to
[Claimant] and/or [Dr. Reyer].
R.R. at 29a.
Claimant’s UR Petition and Penalty Petition were consolidated for
purposes of litigation and decision. WCJ hearings were held on June 21 and
September 27, 2013 and January 24, 2014. The record was closed on February 24,
2014. By July 9, 2014 decision, the WCJ denied and dismissed Claimant’s UR
Petition and Penalty Petition. Claimant appealed to the Board which, on October 14,
2015, affirmed the WCJ’s decision. Claimant appealed to this Court.2
2
“On review[,] this Court must determine whether constitutional rights were violated, errors
of law were committed, or necessary findings of fact were supported by substantial competent
evidence.” Stepp v. Workers’ Comp. Appeal Bd. (FairPoint Commc’ns, Inc.), 99 A.3d 598, 601 n.6
(Pa. Cmwlth. 2014).
4
Initially, Section 306(f.1)(1)(i) of the WC Act (Act)3 requires employers
to pay “for reasonable surgical and medical services, services rendered by physicians
or other health care providers . . . medicines and supplies, as and when needed.” 77
P.S. § 531(1)(i). Employers must pay a claimant’s medical bills within 30 days of
receiving them, “unless the employer or insurer disputes the reasonableness or
necessity of the treatment provided pursuant to [Section 306(f.1)(6) of the Act, 77
P.S. § 531(6)].” 77 P.S. § 531(5). Section 306(f.1)(6) of the Act provides:
Except in those cases in which a [WCJ] asks for an opinion
from peer review under [S]ection 420 [of the Act, 77 P.S.
§§ 831, 832], disputes as to reasonableness or necessity of
treatment by a health care provider shall be resolved in
accordance with the following provisions:
(i) The reasonableness or necessity of all treatment provided
by a health care provider under this [A]ct may be subject to
prospective, concurrent or retrospective utilization review at
the request of an employe, employer or insurer. The
[D]epartment shall authorize [UROs] to perform utilization
review under this [A]ct. Utilization review of all treatment
rendered by a health care provider shall be performed by a
provider licensed in the same profession and having the
same or similar specialty as that of the provider of the
treatment under review. Organizations not authorized by
the [D]epartment may not engage in such utilization review.
(ii) The [URO] shall issue a written report of its findings
and conclusions within thirty (30) days of a request.
(iii) The employer or the insurer shall pay the cost of the
utilization review.
(iv) If the provider, employer, employe or insurer disagrees
with the finding of the [URO], a petition for review by the
[D]epartment must be filed within thirty (30) days after
receipt of the report. The [D]epartment shall assign the
petition to a [WCJ] for a hearing or for an informal
Claimant is not challenging the merits of the UR Determination. See Pet. for Review; see
also Board Op. at 3.
3
Act of June 2, 1915, P.L. 736, as amended, 77 P.S. §§ 1 - 1041.4, 2501-2708.
5
conference under [S]ection 402.1 [of the Act, 77 P.S. §
711.14]. The utilization review report shall be part of the
record before the [WCJ]. The [WCJ] shall consider the
utilization review report as evidence but shall not be bound
by the report.
77 P.S. § 531(6).
Claimant argues that since Employer’s failure to serve Claimant’s
counsel with the UR Request violated Section 127.452 of the Bureau’s Regulations
and, thus, invalidated the UR Determination, the WCJ erred by denying Claimant’s
UR Petition and Penalty Petition. Specifically, Claimant contends that “[b]y
depriving [C]laimant’s counsel [of] the opportunity to discuss the legal significance
of the UR Request, . . . [Employer] significantly increased the likelihood that [Dr.
Reyer’s] treatment would be found unreasonable and unnecessary.” Claimant Br. at
13. Moreover, Claimant asserts that the Claimant’s personal statement or a telephone
conference with Dr. Reyer “may have persuansed [sic] the reviewer to reach a
different determination.” Claimant Br. at 13. We disagree.
Section 306(f.1)(6) of the Act does not specify the manner in which a
UR Request (Form LIBC-601) is to be completed. However, Section 127.452 of the
Bureau’s Regulations states, in pertinent part:
(a) A party seeking [utilization review] of treatment
rendered under the [A]ct shall file the original and 8 copies
of a form prescribed by the Bureau as a [UR Request]. All
information required by the form shall be provided. If
available, the filing party shall attach authorizations to
release medical records of the providers listed on the
request.
(b) The [UR Request] shall be served on all parties and
their counsel, if known, and the proof of service on the
form shall be executed. If the proof of service is not
executed, the [UR Request] will be returned by the Bureau.
4
Added by Section 13 of the Act of June 24, 1996, P.L. 350.
6
(c) [UR Requests] shall be sent to the Bureau at the address
listed on the form.
(d) The [UR Request] shall identify the provider under
review. . . .
34 Pa. Code § 127.452 (emphasis added). Section 127.453(b) of the Bureau’s
Regulations also directs: “The Bureau will send a notice of assignment of the [UR
Request] to the URO; the employe; the employer or insurer; the health care provider
under review; and the attorneys for the parties, if known.” 34 Pa. Code
§ 127.453(b) (emphasis added).
Employer did not present evidence proving that it served the UR Request
upon Claimant’s counsel. Claimant testified at the September 27, 2013 WCJ Hearing
that the only document he received from Avizent5 regarding Employer’s UR Request
was a form that, by his understanding, requested the names of his doctors. See R.R.
at 82a, 85a-86a, 88a-91a. Claimant explained that he wrote names of his doctors,
including Dr. Reyer, on the form and returned the form to Avizent. See R.R. at 82a-
82a, 88a, 90a-91a. When asked if he received Employer’s UR Request, Claimant
responded: “I do not remember this document.” R.R. at 86a. Relative to the
Bureau’s Notice, Claimant related: “I don’t recollect this. I received several
documents. . . . I got everything in a file at my home. But to tell you I received this,
I can’t tell you I did.” R.R. at 88a. When Claimant was asked if he received the UR
Determination, he stated: “I do not know if I received this document.” R.R. at 89a.
Claimant nevertheless admitted that Employer’s UR Request, the
Bureau’s Notice and the UR Determination were properly addressed to him at his
new address, and that he has received all of the Bureau’s other documents at that
address. See R.R. at 87a-88a. Claimant declared that, with the exception of the
utilization request form he completed and returned to Avizent, he forwarded all of the
5
Employer’s WC insurer/administrator was Avizent/Frank Gates Service Co. Avizent
subsequently became York Risk Services Group.
7
documents he has received to Attorney Dastur either by mail or facsimile transmittal.
See R.R. at 92a. At the January 27, 2014 WCJ hearing, Attorney Dastur presented
copies of the documents Claimant faxed to him regarding the utilization review at
issue in this litigation. See Original Record, Notes of Testimony, January 27, 2014 at
10-11. The documents reflect that Claimant faxed the Face Sheet and the UR
Determination to Attorney Dastur on May 2, 2013.
The WCJ made the following relevant finding:
Based upon the entire evidence of record, including
[Claimant’s] live testimony and demeanor, I specifically
reject the testimony of [Claimant] as to whether or not he
received [Employer’s] filing of the [UR Request] or
[Notice] as not being credible, convincing or persuasive.
[Claimant] received the [Face Sheet] . . . and my [January 9,
2013 decision], as well as all of the hearing notices[,] as all
of these documents properly listed [Claimant’s] correct
name and address. [Claimant’s] testimony [] that he merely
did not remember receiving them is not convincing or
persuasive. . . . Additionally, I reject [Claimant’s] counsel’s
legal argument that the [UR] Determination must be
vacated due to the [Employer’s] violation of Section
127.452(b) of the Bureau[’s] Regulations that the [UR
Request] shall be served on all parties and their counsel, if
known, and the proof of service on the form shall be
executed and if the proof of service is not executed, the [UR
Request] will be returned by the Bureau. Although I agree
that [Employer] made a technical violation of this [s]ection
by not completing paragraphs #3 and #6 of the [UR
Request] as to [Claimant’s] counsel and [Employer’s]’
counsel’s names and addresses which were obviously
known and identified in the circulation of my [January 9,
2013 decision], [when] [it] fil[ed] the [UR Request]
received by the Bureau on January 22, 2013. [sic] I
appreciate [Claimant’s] counsel’s legal arguments of the
reasons why claimant[s’] counsels must be listed on the
[UR Request] Form, although he misses the point that I
have found as a fact that [Claimant] was, in fact, properly
notified by [Employer] of its filing of the [UR Request] and
by the Bureau’s filing of the [Notice,] which negates
[Claimant’s] counsel’s arguments. Furthermore, [Claimant]
8
at his own choice then did not submit an Employee
Statement and furthermore, the provider under review (Dr.
Reyer) did not request a phone consultation for
consideration by the utilization reviewer.
R.R. at 6a-7a.
Neither the Board nor the Court may reweigh the evidence or the WCJ’s
credibility determinations. Sell v. Workers’ Comp. Appeal Bd. (LNP Eng’g), 771
A.2d 1246 (Pa. 2001). In addition, “Section 422(a) [of the Act] does not permit a
party to challenge or second-guess the WCJ’s reasons for credibility determinations.
Unless made arbitrarily or capriciously, a WCJ’s credibility determinations will be
upheld on appeal.” Dorsey v. Workers’ Comp. Appeal Bd. (Crossing Constr. Co.),
893 A.2d 191, 195 (Pa. Cmwlth. 2006) (citation omitted). This Court has stated:
‘[I]t is irrelevant whether the record contains evidence to
support findings other than those made by the WCJ; the
critical inquiry is whether there is evidence to support the
findings actually made.’ [Minicozzi v. Workers’ Comp.
Appeal Bd. (Indus. Metal Plating, Inc.), 873 A.2d 25, 29
(Pa. Cmwlth. 2005)] (quoting [Del. Cnty.] v. Workers’
Comp. Appeal Bd. (Baxter Coles), 808 A.2d 965, 969 (Pa.
Cmwlth. 2002)). We review the entire record to determine
if it contains evidence a reasonable mind might find
sufficient to support the WCJ’s findings. If the record
contains such evidence, the findings must be upheld even
though the record contains conflicting evidence.
Lahr Mech. v. Workers’ Comp. Appeal Bd. (Floyd), 933 A.2d 1095, 1101 (Pa.
Cmwlth. 2007) (citation omitted). Moreover, this Court has held:
‘Substantial evidence is such relevant evidence as a
reasonable person might accept as adequate to support a
conclusion.’ Waldameer Park, Inc. v. Workers’ Comp.
Appeal Bd. (Morrison), 819 A.2d 164, 168 (Pa. Cmwlth.
2003). ‘In performing a substantial evidence analysis, this
court must view the evidence in a light most favorable to
the party who prevailed before the factfinder.’ Id.
‘Moreover, we are to draw all reasonable inferences which
are deducible from the evidence in support of the
factfinder’s decision in favor of that prevailing party.’ Id.
9
3D Trucking Co., Inc., v. Workers’ Comp. Appeal Bd. (Fine & Anthony Holdings
Int’l), 921 A.2d 1281, 1288 (Pa. Cmwlth. 2007).
Here, the Board upheld the WCJ’s decision dismissing Claimant’s UR
Petition, stating:
Upon review, the WCJ did not err in his denial of the UR
Petition on the basis that Claimant’s counsel was not served
with a copy of the UR Request. Here, the WCJ found that
Claimant did receive such service, and that to the extent
Claimant and the provider proceeded absent any advice of
counsel, no prejudice was established. (Finding of Fact 11).
Based on the Court’s statements in Gallie [v. Workers’
Compensation Appeal Board (Fichtel & Sachs Indus.), 859
A.2d 1288 (Pa. 2004)], related to a claimant who had
received required service of a document and who proceeded
without advice of counsel in the absence of service having
been made to the claimant’s counsel, where no prejudice
was found, we cannot agree the WCJ erred in finding no
prejudice. Furthermore, in the usual circumstance, the
courts have held that a finding concerning the existence of
prejudice is for the WCJ, and is not to be overturned on
appeal. [US Airways v. Workers’ Comp. Appeal Bd.
(McConnell), 870 A.2d 418 (Pa. Cmwlth. 2005)].
Moreover, we understand that where a remedy is sought
based on an allegation of a lack of service, the party
alleging the lack of service is to further assert a lack of
actual knowledge of the filing of the document, with that
lack of actual knowledge resulting in prejudice. See
generally, as persuasive authority, the unpublished
Commonwealth Court decision in Cadena v. [Workers’
Comp. Appeal Bd.] (Acme Mkts., Inc.), (Pa. Cmwlth., No.
1592 C.D. 2014, filed March 25, 2015) (wherein the
claimant’s counsel asserted that he had not been served with
a termination petition and that he became aware of the filing
of that petition during the taking of a deposition, and was
prejudiced during the deposition). Claimant’s counsel on
[a]ppeal asserts that the lack of service to him of the UR
Request resulted in prejudice; however, we find no basis for
assigning error to the WCJ, as we see no indication that
Claimant’s counsel on [a]ppeal has asserted a lack of actual
knowledge on his part of the filing of the UR Request, with
10
prejudice arising from that lack of actual knowledge. See
Fraisar [v. Gillis, 892 A.2d 74 (Pa. Cmwlth. 2006)];
Cadena. No error was committed.
Board Op. at 7-8.
It is clear based on this record that Employer (itself and/or by and
through its insurer/administrator) was aware that Attorney Dastur represented
Claimant at the time the UR Request was filed. Employer’s failure to properly
complete the UR Request form with that information violated Section 127.452(b) of
the Bureau’s Regulations. However, under the specific circumstances of this case,
we cannot conclude that Employer’s error requires this Court to invalidate the UR
Determination.
First, neither Section 306(f.1)(6) of the Act, nor Section 127.452(b) of
the Bureau’s Regulations mandate such a result. Second, the record supports the
WCJ’s conclusion based upon his credibility determinations that Claimant received
the UR Request, the Notice and the UR Determination. Third, the Notice clearly
informed Claimant that he “may have an attorney assist [him] in preparing [his]
written personal statement.” R.R. at 109a. Fourth, in light of Claimant’s receipt of
the relevant documents, the fact that Attorney Dastur did not receive them directly
from the Bureau did not prejudice Claimant. Gallie. Accordingly, we hold that the
Board did not err by affirming the WCJ’s denial of Claimant’s UR Petition.
Next, Claimant asserts that the WCJ erred by denying Claimant’s
Penalty Petition. We disagree. Section 435(d) of the Act provides, in relevant part:
The [D]epartment, the [B]oard, or any court which may
hear any proceedings brought under this [A]ct shall have
the power to impose penalties as provided herein for
violations of the provisions of this [A]ct or such rules and
regulations or rules of procedure:
(i) Employers and insurers may be penalized a sum
not exceeding ten per centum of the amount
awarded and interest accrued and payable:
11
[p]rovided, however, [t]hat such penalty may be
increased to fifty per centum in cases of
unreasonable or excessive delays. Such penalty
shall be payable to the same persons to whom the
compensation is payable.
77 P.S. § 991(d).6 However, “the imposition of a penalty and the amount of the
penalty are discretionary and absent an abuse of discretion by the WCJ or the Board
will not be overturned on appeal.” Crucible, Inc. v. Workers’ Comp. Appeal Bd.
(Vinovich), 713 A.2d 749, 753 (Pa. Cmwlth. 1998) (emphasis added).
Here, the WCJ found:
In dismissing the [Claimant’s] Penalty Petition, I find that
there are insufficient grounds to assess a penalty for a
de[]minimis non-compliance with the [Bureau’s]
Regulations and that the [Claimant] did not establish
prejudice as a result thereof. Likewise, I find as a fact that
[Employer] had a reasonable basis to contest the
[Claimant’s] Penalty and [UR] Petitions as there [] was a
legitimate legal issue involved and the [Employer’s] contest
was not frivolous or to harass the [Claimant]. Furthermore,
an [Employer’s] contest is not unreasonable as a matter of
law whenever a violation of the Act or . . . Regulations is
established as held in the case of Hough v. [Workers’
Compensation Appeal Board] (AC &T Companies), 928
A.2d 1173 (Pa. Cmwlth. 2000) as rather each case must be
decided on its own facts to determine whether an
[E]mployer’s contest was reasonable.
R.R. at 7a. The Board stated:
The WCJ found that while a technical violation occurred, it
was de minim[i]s, and awarded no penalty. (Finding of Fact
11).
Upon review, we cannot conclude the WCJ erred in
determining that a penalty was not appropriate on the basis
that the violation was de minim[i]s. Because the assessment
of a penalty and the amount of the penalty are within the
6
Added by Section 3 of the Act of February 8, 1972, P.L. 25.
12
WCJ’s discretion, and we find no abuse of discretion, we
cannot agree the WCJ erred.
Board Op. at 8-9. Finding no error in either the Board’s or the WCJ’s reasoning or
conclusions, we hold that the Board did not err by affirming the WCJ’s denial of
Claimant’s Penalty Petition.
Lastly, Claimant contends that the WCJ erred by not awarding Claimant
attorney’s fees. We disagree. Section 440(a) of the Act provides:
In any contested case where the insurer has contested
liability in whole or in part . . . the employe . . . in whose
favor the matter at issue has been finally determined in
whole or in part shall be awarded, in addition to the award
for compensation, a reasonable sum for costs incurred for
attorney’s fee . . . [p]rovided, [t]hat cost for attorney[’s] fees
may be excluded when a reasonable basis for the contest
has been established by the employer or the insurer.
77 P.S. § 996(a).7 Accordingly, under Section 440 of the Act, an award of attorney’s
fees to a prevailing claimant is mandatory, unless the employer can establish a
reasonable basis for its contest. Bell’s Repair Serv. v. Workers’ Comp. Appeal Bd.
(Murphy, Jr.), 850 A.2d 49 (Pa. Cmwlth. 2004). Because Claimant’s UR Petition and
Penalty Petition were unsuccessful, Claimant is not entitled to attorney’s fees and,
therefore, the WCJ did not err by not awarding them.
Because the Board did not err by affirming the WCJ’s decision, the
Board’s order is affirmed.
___________________________
ANNE E. COVEY, Judge
7
Added by Section 3 of the Act of February 8, 1972, P.L. 25.
13
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Edward Dixon, :
Petitioner :
:
v. :
:
Workers’ Compensation Appeal :
Board (Medrad, Inc.), : No. 2277 C.D. 2015
Respondent :
ORDER
AND NOW, this 21st day of October, 2016, the Workers’ Compensation
Appeal Board’s October 14, 2015 order is affirmed.
___________________________
ANNE E. COVEY, Judge