Opinion
W.C. No. 4-632-887.
July 31, 2008.
FINAL ORDER
The claimant seeks review of an order of Administrative Law Judge Stuber (ALJ) dated March 25, 2008, that denied her request for penalties against the respondents concerning authorization of hip surgery. The claimant alleged at hearing that the respondents unreasonably delayed her hip surgery and sought penalties for an alleged violation of Workers' Compensation Rule of Procedure 16. We affirm.
The ALJ's findings of fact are summarized as follows. The claimant sustained a compensable injury in 2004. Dr. Bradley assigned a medical impairment rating for injuries to her lumbar spine, but there was no rating or diagnosis concerning her hip. One of two subsequent MRI screenings indicated an anterior tear of the left hip labrum. Dr. Xenos, an orthopedic surgeon, examined the claimant in May 2007. He suspected an overlap of symptoms between the claimant's lumbar spine injuries and her hip pathology; however, another MRI of the claimant's left hip showed no significant findings. Dr. Xenos wrote a letter to Dr. Bradley in which he diagnosed a likely labral tear of the claimant's left hip and indicated that the claimant consented to undergoing elective arthroscopic surgery on her left hip. The claimant eventually underwent the hip surgery on October 25, 2007, which resulted in the repair of a labral tear. The claimant's symptoms improved after the surgery.
The respondents' claims adjuster received a copy of Dr. Xenos' letter by facsimile transmission on September 20, 2007, but did not review the letter until September 26, 2007. The letter had no attached information and the adjuster was unsure whether Dr. Xenos sought prior authorization for the hip surgery. After an unsuccessful attempt to reach someone at Dr. Xenos' office the adjuster directed legal counsel to send a letter to Dr. Xenos denying authorization for the surgery on the ground of relatedness and, also, to set up a review by another physician. Counsel did as instructed. The respondents also sought additional time up to and including October 11, 2007, in which to comply with Rule 16.
Dr. Davis reviewed the claimant's medical records in the respondents' possession and issued a report on October 8, 2007. Dr. Davis concurred with Dr. Xenos' recommendation for the arthroscopic hip surgery. The adjuster received Dr. Davis' report on October 10, 2007. That same day the adjuster notified Dr. Xenos by both telephone and letter that the surgery was authorized.
On the date that the claimant underwent the hip surgery, the claimant filed an application for hearing. The claimant sought statutory penalties for the respondents' alleged failure to authorize the surgery in accordance with Rule 16. The ALJ determined that Dr. Xenos' letter did not constitute a "completed request for prior authorization" because Dr. Xenos "did not explain the medical necessity of the services requested and provide relevant supporting medical documentation." Findings of Fact, Conclusions of Law, and Order (Order) at 5, ¶ 23. Citing Cross v. Microglide, Inc., W.C. No. 4-355-764 (February 25, 2003), aff'd, Cross v. Industrial Claim Appeals Office, No. 03CA1807 (Colo.App. Oct. 7, 2004) (not selected for publication), the ALJ concluded that penalties were not appropriate absent a completed request for prior authorization. The ALJ further determined that the respondents received Dr. Xenos' letter on September 20, 2007, and timely responded to the letter. The ALJ denied the claim for penalties for the alleged violation of Rule 16.
The claimant appealed the ALJ's order and argues that he erred in ruling that Dr. Xenos' letter was not a request for prior authorization and in ruling that, in any event, he erred in ruling that the respondents' timely responded to the request. We perceive no reversible error in the ALJ's order.
I.
Here, the claimant sought penalties pursuant to § 8-43-304(1), C.R.S. 2007, which allows the Director or an ALJ to impose penalties up to $500 per day against any employer or insurer who commits one of four types of violations. A person may be penalized "who violates any provision of articles 40 to 47 of [title 8], or does any act prohibited thereby, or fails or refuses to perform any duty lawfully enjoined within the time prescribed by the director or panel, for which no penalty has been specifically provided, or fails, neglects, or refuses to obey any lawful order made by the director or panel or any judgment or decree made by any court. . . ." Moreover, a failure to comply with the Workers' Compensation Rules of Procedure is a failure to perform a "duty lawfully enjoined" within the meaning of § 8-43-304(1). See Diversified Veterans Corporate Center v. Hewuse, 942 P.2d 1312 (Colo.App. 1997); Pueblo School District No. 70 v. Toth, 924 P.2d 1094 (Colo.App. 1996). The imposition of penalties under § 8-43-304(1) is a two step process. Thus, the ALJ must first determine whether the disputed conduct constituted a violation of the Act, of a duty lawfully enjoined, or of an order. If the Director finds such a violation, he may impose penalties if he also finds that the employer's actions were objectively unreasonable. City Market, Inc. v. Industrial Claim Appeals Office, 68 P.3d 601 (Colo.App. 2003). The amount of the penalty is discretionary up to a maximum of $500 per day for each offense.
Here, as noted, the ALJ determined that the respondents had not violated Rule 16, both because the letter from Dr. Xenos was not a request for prior authorization pursuant to the rule and because, in any event, the respondents timely responded to the letter initially denying authorization for the proposed surgery.
The claimant first asserts that Dr. Xenos' letter should be construed as a proper request for prior authorization under Rule 16 because the respondents effectively waived any objection to its form by responding to the letter as such. The ALJ found that the letter from Dr. Xenos to Dr. Bradley, dated August 14, 2007, did not constitute a completed request for prior authorization. Order at 5, ¶ 23; Claimant's Exhibits at 12-13. As noted by the ALJ, in order to complete a prior authorization request, the provider must "concurrently explain the medical necessity of the services requested and provide relevant supporting medical documentation," which means "documents used in the provider's decision-making process to substantiate the need for the requested service or procedure." Rule of Procedure 16-9(E), 7 Code Colo. Reg. 1101-3 at 92. The letter is devoid of supporting medical documentation. Furthermore, the letter contains no explanation of why the left hip arthroscopy is necessary. Instead, Dr. Xenos describes the procedure as "elective." Claimant's Exhibits at 13. We agree with the ALJ that Dr. Xenos' letter to another physician did not comply with the requirements for requesting prior authorization of the hip surgery.
In this regard, we note that Rule 16 represents an administrative "effort . . . to assure appropriate and timely medical care at a reasonable cost." W.C. Rule of Procedure 16-1, 7 Code Colo. Reg. 1101-3 at 84. Prior authorization of treatment under the rule has been described as facilitating the determination of the reasonableness of treatment in advance of the treatment by directing the physician to submit a request for prior authorization, which is either granted or denied by the insurer. The rule therefore protects the provider from providing treatment considered by the insurer to be non-compensable. Repp v. Prowers Medical Center, W.C. No. 4-530-649 (September 12, 2005). Here, as noted, we agree with the ALJ's conclusion that Dr. Xenos was not seeking authorization from the insurer for the surgery, but was merely notifying Dr. Bradley regarding the results of his examination of the claimant and of her "election" to proceed with the hip surgery.
The claimant also argues that the respondents effectively waived any defect in the document under Rule 16 by treating it as a request for prior authorization, as evidenced by their letter in response to Dr. Xenos' letter. A waiver exists when there has been the intentional relinquishment of a known right. A waiver may be explicit or implicit, but must be voluntary, knowing and intelligent. Johnson v. Industrial Commission, 761 P.2d 1140, 1147 (Colo. 1988). We disagree with this argument.
The respondents' attorney wrote a letter to Dr. Xenos, dated September 27, 2007, in which she advised him that pending review by another physician, the respondents denied authorization for the surgery because it was "not reasonable and necessary and many not be related to the admitted injury." The letter further advised Dr. Xenos that he was "free to provide the respondents with any information" he had as to "the reasonableness, necessity, and relatedness of the request for surgery," consistent with the prior authorization provisions of Rule 16. Exhibit Q at 39. It thus appears from the respondents' letter that they were clearly disputing the propriety of the "elective" surgery proposed by Dr. Xenos pending further medical information as required under Rule 16 for prior authorization. Claimant's Exhibits at 13. In our view the respondents' correspondence with Dr. Xenos does not supplant or eliminate the need for the provider to comply with Rule 16 in the first instance. See Cross v. Microglide, Inc., supra (rejecting assertion respondents waived right to contest due to noncompliance with Rule 16 where provider failed to complete prior authorization process — provider retained duty to request prior authorization).
Moreover, the respondents' letter reflects an effort to insure regulatory compliance in any event. See Gauvin v. Microfilm Imaging of Durango, W.C. No. 4-570-204 (September 27, 2006); Timko v. Cub Foods, W.C. No. 3-969-031 (December 26, 2003) (amendment to Rule 16 requires response within seven business days from receipt of completed request for prior authorization that was not required under rule). We are not persuaded that the respondents effectively waived their ability to contest whether the provider completed a request for prior authorization of surgery.
II.
The claimant also asserts that the ALJ erred in finding that the respondents acted in a timely manner to contest the requested surgical procedure. Penalties may be imposed if the ALJ determines that the payer caused an "[u]nreasonable delay or denial of prior authorization." Rule of Procedure 16-10(F), 7 Code Colo. Reg. 1101-3 at 93. A payer's failure to contest a request for prior authorization is "deemed authorization for payment of the requested treatment" if no hearing is timely requested. Rule of Procedure 16-10(E), 7 Code Colo. Reg. 1101-3 at 93. However, the ALJ found that the payer timely responded to Dr. Xenos' letter.
"There is a rebuttable presumption that a letter which was properly addressed, stamped, and mailed was duly delivered to the addressee. . . . However, when the evidence is conflicting as to whether the letter was mailed initially, the presumption does not arise and the conflict must be resolved by the trier of fact. . . . ." Campbell v. IBM, 867 P.2d 77, 80 (Colo.App. 1993) (citations omitted). The ALJ was not persuaded that Dr. Xenos' letter dated August 14, 2007, was mailed to the respondent insurer. Order at 3, ¶ 10. Instead, he found that the respondents' adjuster received a copy of the letter by facsimile transmission on September 20, 2007. Order at 3, ¶ 11. The respondents sent Dr. Xenos a letter by facsimile and mail on September 27, 2007. Order at 3, ¶ 14.
Because the issue of the respondents' receipt of the provider's letter is one of fact, we must uphold the ALJ's determination if supported by substantial evidence in the record. Section 8-43-301(8), C.R.S. 2007. This standard of review requires us to defer to the ALJ's resolution of conflicts in the evidence, his credibility determinations, and the plausible inferences he drew from the record. See University Park Care Center v. Industrial Claim Appeals Office, 43 P.3d 637(Colo.App. 2001). Furthermore, the ALJ is not required to enter specific findings concerning evidence or theories that he finds unpersuasive. See, e.g., Tilley v. Industrial Claim Appeals Office, 924 P.2d 1173, 1177 (Colo.App. 1996) (hearing officer in unemployment proceeding not required to address specific evidence not found persuasive).
The ALJ's findings concerning the respondents' receipt of the provider's report concerning hip surgery are supported by the adjuster's testimony. The adjuster testified that she received Dr. Xenos' correspondence in her "in-box" on September 20, 2007. Tr. at 88. She later indicated that she received Dr. Xenos' letter by facsimile on September 20, 2007. Tr. at 115. The claimant does not dispute that the respondents wrote to the provider on September 27, 2007, to challenge the need for the surgery. The ALJ's corresponding findings support his determination that the respondents timely complied with the applicable provisions of Rule 16. Order at 6, ¶ 3. It is certainly true that the ALJ was not compelled by the evidence to draw the particular inference he reached. However, the existence of evidence in the record from which the hearing officer could have drawn contrary inferences does not provide a basis for relief on appeal. Cordova v. Industrial Claim Appeals Office, 55 P.3d 186 (Colo.App. 2002).
We agree with the ALJ that the provider failed to complete a request for prior authorization and, in any event, the respondents complied with any potentially applicable requirements imposed by Rule 16. Accordingly, we affirm the ALJ's order.
IT IS THEREFORE ORDERED that the ALJ's order dated March 25, 2008, is affirmed.
INDUSTRIAL CLAIM APPEALS PANEL
____________________________________ John D. Baird
____________________________________ Curt Kriksciun
BARBARA SKELLY, 1305 T, PENROSE, CO, (Claimant).
CLAIMS MANAGEMENT, INC., Attn: LEA ANN GAVELLAS, C/O: AMERICAN HOME ASSURANCE, BENTONVILLE, AR, (Insurer).
STEVEN U. MULLENS, PC, Attn: RICHARD LAMPHERE, ESQ., C/O: STEVEN U. MULLENS, ESQ.,, PUEBLO, CO, (For Claimant).
RITSEMA LYON, PC, Attn: MARGARET A METZGER, ESQ., DENVER, CO, (For Respondents).