Opinion
W.C. No. 2-435-289
August 30, 2002
FINAL ORDER
The claimant seeks review of an order of Administrative Law Judge Mattoon (ALJ) which denied a petition to reopen and effectively denied the claim for medical benefits to be paid by the Major Medical Insurance Fund (MMIF). The claimant argues, inter alia, that the claim was not closed by an order entered by the Director of the Division of Workers' Compensation (Director) on June 20, 1994. We reverse.
This case has a complicated procedural history which will be reviewed insofar as pertinent. The claimant sustained a compensable back injury in 1971 and underwent surgery. In 1974 the respondents filed a special admission of liability for permanent partial disability benefits. On December 10, 1975, at the request of the respondent-insurer (Hartford), the claimant was admitted to the MMIF because payments for medical expenses exceeded the then existing cap of $20,000. The MMIF reimbursed Hartford for $1,062 it had paid in excess of the cap. By 1992, the claimant began to experience recurrent back pain, although the etiology of the pain was not determined. In 1994 the claimant was referred for a surgical evaluation of her low back pain.
In 1994 an employee of the Division of Workers' Compensation reviewed the file and determined there had been no request for payment of medical expenses by the MMIF since the payment to Hartford in 1976. Therefore, the employee prepared a proposed Order to Cease Payments from the Major Medical Insurance Fund for signature by then Director Platt. The order, issued under the authority of § 8-46-208, C.R.S. 2001, states the claimant "is not currently receiving medical care to promote recovery, alleviate pain or reduce disability from" the industrial injury, and that the claimant "has no need of further medical care." Consequently, the Order determined the claimant "is no longer eligible" for benefits from the MMIF and that the claim "is closed subject to the reopening provisions" of the Act. The order further provides the "decision of the Director is final unless a PETITION TO REVIEW is filed within (20) days." Pursuant to authority issued by Director Platt, an employee stamped the Director's signature on the order on June 20, 1994. The order was mailed to the claimant and her then attorney of record. The order sent to the attorney was returned as undeliverable.
In April 1996 the claimant received a prescription for medication and submitted it to the MMIF for payment. The MMIF declined to pay based on the Director's 1994 order.
In August 1996 the claimant filed a petition to reopen the claim based on a worsened condition. The claimant attached a physician's report opining that the claimant's continuing back symptoms are causally related to the surgery performed after the 1971 industrial injury.
The matter then proceeded to hearing on the issues of medical benefits and the "status" of Director Platt's order. The claimant argued Director Platt did not have authority to issue the order. The claimant further argued that even if the Director had the authority to issue the order it was "interlocutory" under the applicable rules of procedure and did not close the claim. Alternatively, the claimant argued that if the order was final, it denied due process of law because she was not afforded a hearing, and because notice to the claimant and her attorney was inadequate. Finally, the claimant argued the evidence demonstrates the MMIF voluntarily reopened the claim. The MMIF and the respondents argued the claim was closed by the Director's order and that the petition to reopen is barred by the statute of limitations for reopening. See § 8-43-303, C.R.S. 2001.
In the order dated April 5, 2002, the ALJ found as a matter of fact that the claimant proved her "current back condition and need for treatment" are related to the 1971 industrial injury. Nevertheless, the ALJ concluded the Director's June 20, 1994, order was a "final order" which closed the claim. Further, the ALJ found the petition to reopen is barred by the statute of limitations and rejected the claimant's due process arguments. Consequently, the ALJ denied the petition to reopen and, by necessary implication, the claim for medical benefits.
On review the claimant reasserts all of the arguments which she made to the ALJ. We are persuaded by the claimant's argument that the Director's order was insufficient to close the claim in light of the applicable rules of procedure. Consequently, we reverse the order denying medical benefits.
Section 8-46-208(2), C.R.S. 2001, provides in pertinent part that the Director "shall approve or disapprove the expenditure of further sums of money from the major medical insurance fund and in so doing may rely upon medical reports contained in the file if the director deems them adequate." Section 8-46-206, C.R.S. 2001, grants the Director all of the powers provided in the Act for enforcement of the provisions pertaining to the MMIF. This power includes the enactment of rules governing the determination of claims under § 8-46-208(2). Section 8-47-107, C.R.S. 2001; Romans v. Hewlett Electric Corp., 723 P.2d 161 (Colo.App. 1986).
Rule of Procedure VI, 7 Code Colo. Reg. 1101-3 was adopted by the Director and pertains to the "payment of benefits" from the MMIF. Rule VI (B) (1) provides as follows:
A party who is dissatisfied with an order dismissing or denying an application for admission or dissatisfied with a written denial of benefits may request mediation services and/or apply for a hearing.
In light of this regulation, we agree with the claimant that the Director's order was not a "final" order subject to appeal. Rule of Procedure VI (B) (1) expressly provides that a Director's order denying benefits payable by the MMIF may be disputed by requesting mediation or a hearing. No party denies the validity of this rule. Thus, by regulation, an initial Director's order denying medical benefits from the MMIF contemplates further proceedings before the denial becomes final and reviewable for purposes of § 8-43-301(2), C.R.S. 2001. See Bestway Concrete v. Industrial Claim Appeals Office, 984 P.2d 680 (Colo.App. 1999) (a reviewable order is one which finally disposes of the issue); United States Fidelity and Guaranty, Inc. v. Kourlis, 868 P.2d 1158 (Colo.App. 1994) (order remanding for additional findings concerning penalty was not final and reviewable because the issue was undisposed).
We recognize the Director attempted to render the order final by affixing a notice that the claimant was required to file a "petition to review" within 20 days. However, the notice did not vitiate the effect of the valid rule. In order to be effective, a notice may not be "misleading in any material respect." Scofield v. Industrial Commission, 697 P.2d 815, 817 (Colo.App. 1985) (notice concerning time for appeal to court was insufficient where it failed to notify claimant of pending change in requirements for service of petition); see also, Industrial Commission v. Martinez, 102 Colo. 31, 77 P.2d 646 (1938).
Here, the notice on the Director's order was misleading. The notice indicated the order would become "final" unless a petition to review was filed within 20 days. The notice did not advise the claimant that this consequence could be avoided by requesting mediation or a hearing, nor did it advise the claimant of any time limit for requesting such action. In fact, as the claimant points out, the rule itself does not establish any time limit for requesting mediation or a hearing. Moreover, the misleading nature of the notice is material. The evidentiary standard for appellate review of a Director's order by the Industrial Claim Appeals Office is narrowly restricted by the substantial evidence standard established by § 8-43-301(8), C.R.S. 2001, while an ALJ enjoys broad fact-finding authority in connection with an evidentiary hearing. See Metro Moving and Storage Co. v. Gussert, 914 P.2d 411 (Colo.App. 1995). Had the claimant been informed in 1994 of her right to request a hearing, it is possible she would have made an earlier discovery of the causal relationship between her condition and the 1971 injury and presented such evidence to an ALJ.
It follows the claimant's failure to appeal the 1994 order did not close the claim. Therefore, the statute of limitations on reopening is not applicable. Because the ALJ found the claimant proved a causal relationship between the injury and her need for treatment, the denial of the claim for the medication must be reversed. In light of this determination, we need not reach the claimant's other arguments.
IT IS THEREFORE ORDERED that the ALJ's order dated April 5, 2002, is reversed, and the MMIF is ordered to pay for the prescription submitted by the claimant in April 1996. The claimant's entitlement to any other medical benefits shall be decided in accordance with the provisions of § 8-46-208 and the applicable Rules of Procedure.
INDUSTRIAL CLAIM APPEALS PANEL
________________________________ David Cain
________________________________ Kathy E. Dean
NOTICE
This Order is final unless an action to modify or vacate this Order is commenced in the Colorado Court of Appeals, 2 East 14th Avenue, Denver, CO 80203, by filing a petition for review with the Court, within twenty (20) days after the date this Order is mailed, pursuant to § 8-43-301(10) and § 8-43-307, C.R.S. 2001. The appealing party must serve a copy of the petition upon all other parties, including the Industrial Claim Appeals Office, which may be served by mail at 1515 Arapahoe Street, Tower 3, Suite 350, Denver, CO 80202.
Copies of this decision were mailed to the following parties:
Nora Bachicha, 1828 E. Abriendo, Pueblo, CO 81004 St. Mary Corwin Hospital, 1008 Minnequa Ave., Pueblo, CO 81004
Hartford Accident Indemnity Company, c/o Tom Corrigan, ITT Specialty Risk Services, Inc., P. O. Box 221700, Denver, CO 80222
Major Medical Insurance Fund, Tower 2, #630, Division of Workers' Compensation-Interagency Mail
Steven U. Mullens, Esq., 1401 Court St., Pueblo, CO 81003 (For Claimant)
Tama L. Levine, Esq., 999 18th St., #1755, Denver, CO 80202 (For Respondents St. Mary Corwin Hospital and Hartford Accident Indemnity Company)
Joseph F. Haughain, Esq., 1525 Sherman St., 5th floor, Denver, CO 80203 (For Major Medical Insurance Fund)
By: A. Hurtado