Opinion
No. 251 C.D. 2011
12-07-2011
Liberty Mutual Insurance Company, Petitioner v. Bureau of Workers' Compensation, Fee Review Hearing Office (Luber, D.O. c/o East Coast TMR), Respondent
BEFORE: HONORABLE BERNARD L. McGINLEY, Judge HONORABLE JOHNNY J. BUTLER, Judge HONORABLE KEITH B. QUIGLEY, Senior Judge
OPINION NOT REPORTED
MEMORANDUM OPINION BY SENIOR JUDGE QUIGLEY
Liberty Mutual Life Insurance Company (Insurer) petitions this Court for review of a decision of a fee review officer involving eighteen consolidated fee review petitions, all relating to therapeutic magnetic resonance (TMR) treatment provided by Ronald Luber, D.O. (Provider) to workers' compensation claimant Joseph Foisy (Claimant). The fee review officer (FRO) concluded that Insurer failed to follow the procedures for changing Provider's billing codes, and, accordingly, resolved the applications for fee review in favor of Provider pursuant to 34 Pa. Code §127.207(d). We affirm.
The FRO listed the matters on page 3 of his adjudication, designating them as cases A through R. The FRO found that Insurer failed to make any payment in cases A through J. Case H involved six separate treatment dates. The FRO found that Insurer failed to meet its burden of proof as to four of the dates and that Provider's application for fee review was untimely as to the remaining two dates. The FRO also found that Insurer failed to properly down-code the charges at cases K through P and case R. Finally, the FRO found that Insurer correctly down-coded Provider's charges in case Q. Provider did not appeal those cases in which the FRO found in favor of Insurer.
By way of background, Section 306(f.1)(3) of the Workers' Compensation Act (Act), incorporates Medicare billing rates and billing codes into the definition and schedule for reimbursement of reasonable medical care for the treatment of compensable injuries under the Act. Billing codes under the Act follow the HCPCS-HCFA Common Procedure Coding System (CPT). 34 Pa. Code §127.3. When a provider submits a bill to an insurer for payment, it identifies the code under which the treatment is billed. However, an insurer is not required to accept the billing code submitted by a provider; it may change the billing code.
Act of June 2, 1915, P.L. 736, as amended, 77 P.S. §531(3)(i).
To that end, Section 127.207 of the Bureau of Workers' Compensation Cost Containment Regulations provides the procedure whereby an insurer may change the billing code for treatment submitted by the provider. Section 127.207 provides:
(a) Changes to a provider's codes by an insurer may be made if the following conditions are met:
(1) The provider has been notified in writing of the proposed changes and the reasons in support of the changes.
(2) The provider has been given an opportunity to discuss the proposed changes and support the original coding decisions.
(3) The Insurer has sufficient information to make the changes.
(4) The changes are consistent with Medicare guidelines, the Act and this subchapter.
(b) For purposes of subsection (a)(1), the provider shall be given 10 days to respond to the notice of the proposed changes, and the insurer must have written evidence of the date notice was sent to the provider.
(c) Whenever changes to a provider's billing codes are made, the insurer shall state the reasons why the provider's codes were changed in the explanation of benefits required by §127.209 (relating to explanation of benefits paid).
(d)If an insurer changes a provider's code without strict compliance with subsections (a)-(c), the Bureau will resolve an application for fee review filed under §127.252 (relating to application for fee review-filing and service) in favor of the provider under §127.254 (relating to downcoding disputes). (Emphasis added).
In this case, Provider treated Claimant on various dates between September 24, 2008 and September 14, 2009. Fee Review Officer's decision (FRO decision) at 1. The TMR treatments consisted of electromagnetic waves or impulses applied to affected areas of the body, providing temporary pain relief. FRO decision at 4-5. Provider billed Insurer at the rate of $3298 per session, using billing code (CPT) 76498. The FRO noted that there is no listed CPT Code for TMR treatments, and that CPT Code 76498 is a code for an unlisted magnetic resonance procedure, e.g., "diagnostic, inverventional" which falls under the subtopic of radiologic procedures. An unlisted code is a CPT code for a given subclass of services for which a more specific code does not exist. FRO decision at 5-6, findings of fact Nos. 12-14.
The FRO noted that a Workers' Compensation Judge (WCJ) concluded that Insurer was not liable for TMR treatment as of November 9, 2009 and ongoing. The treatments at issue here all pre-date November 9, 2009. FRO decision at 3, n.3.
Insurer initially denied payment of Provider's billings, but later adjusted and "down-coded" Provider's bills. The "down-coding" resulted in payment under CPT Codes 97035 or 97032 in amounts ranging from $25 to $85.72 per treatment. FRO decision at 6-7, findings of fact Nos. 20-21. Although Provider timely contested the proposed "down-coding," Insurer proceeded to issue checks for the "down-coded" procedures along with explanations of benefits.
The FRO, noting the vast difference between the $3282 billed by Provider and the $25-85 paid by Insurer, opined that based on the evidence presented by the parties, Insurer's classification of the treatment at less than $100 per treatment seemed more reasonable. FRO decision at 11-13. However, because Insurer failed to follow the procedures required by 34 Pa. Code §127.207, above, the FRO concluded that the dispute must be resolved in favor of the Provider. Accordingly, the FRO ordered payments totaling $55,723.48, plus interest.
Insurer now presents three arguments in its brief to this Court, which we shall reorder. Our scope of review is limited to determining whether there has been a violation of constitutional rights or errors of law committed and whether necessary findings of fact are supported by substantial evidence. National Mutual Fire Insurance Co. v. Bureau of Workers' Compensation Fee Review Hearing Office and Hospital of the University of Pennsylvania, 981 A.2d 366 (Pa. Cmwlth. 2009).
Insurer's statement of questions involved lists seven separate issues. Insurer's brief, however, contains only three numbered arguments. We shall address the arguments as presented in Insurer's brief rather than as stated in the statement of questions. See Pa.R.A.P. 2119(a); Woods v. Cicierski, 937 A.2d 1103 (Pa. Super. 2007).
Unconstitutional Penalty
Insurer first argues that the decision of the FRO results in a 1300% penalty, which Insurer alleges is both unconstitutional and violates Section 435 of the Act, 77 P.S §991(d)(i). We disagree. The FRO did agree that CPT Code 97032, one of two proferred by Insurer at different times, was "the more appropriate" billing code for TMR treatments. As to the one treatment (case Q) in which Insurer followed the procedures in the regulations and downcoded to CPT Code 97032, the FRO agreed that no additional payment was required.
Added by the Act of February 8, 1972, P.L. 25. --------
This Court recently decided a case involving TMR treatments in the context of a penalty petition, which aptly illustrates the difference in procedures. In CVA, Inc. and State Workers' Insurance Fund v. Workers' Compensation Appeal Board (Riley), ___ A.3d ___ (Pa. Cmwlth., No. 2658 C.D. 2010, filed October 14, 2011), the claimant received TMR treatments for more than a year. The employer summarily denied payment for the reason that "[d]ocumentation does not support charges as billed" and "[d]ocumentation does not support billing of a radiology code." Id. at ___, slip op. at 2. As in this case, the employer in CVA, Inc. unilaterally down-coded the TMR procedure in some instances and simply declined to pay in others. The claimant then filed a penalty petition as to the unpaid bills. The Workers' Compensation Judge (WCJ) first found that the claimant did not seek a penalty as to the down-coded bills because the dispute could be resolved through the fee review process. Id. at ___, slip op. at 3. The WCJ granted the claimant's penalty petition and the Workers' Compensation Appeal Board affirmed. On further appeal, we affirmed the Board, discussing why penalties were appropriate where the insurer failed to pay or otherwise challenge the claimant's medical expenses through the utilization review process. The Court stated:
Employer did not submit any of the bills for Claimant's TMR treatment to utilization review. Section 127.467 of the Medical Cost Containment Regulations requires that utilization reviewers "shall apply generally accepted treatment protocols as appropriate to the individual case before them." 34 Pa. Code §127.467 (Emphasis added) Thus, whether a particular treatment is generally accepted in the medical community is a matter to be determined through utilization review, not in a penalty proceeding. Employer was required to file a utilization review to address its objections to the
treatment where Employer, not claimant, bears the burden of proof.Id. at ___, slip op. at 7-9. (footnote omitted)
Similarly, Employer's objections to the cost of the treatment are irrelevant. The codes and costs assigned to medical procedures must be decided in accordance with the fee review established in Section 306(f.1)(5) of the Act, 77 P.S. §531(5). The Bureau of Workers' Compensation, not workers' compensation judges, oversees fee reviews. Enterprise Rent-A-Car v. Workers' Compensation Appeal Board (Clabaugh), 934 A.2d 124, 128 (Pa. Cmwlth. 2007). Claimant did not have to show that the cost of his TMR treatments was reasonable to make out his case for penalties.
Employer bristles at the notion that it had to file a petition when confronted with Claimant's large TMR invoices, believing, apparently, that it had no choice but to allow the bills to accumulate. However, Employer had several options. Employer could have filed a petition to review medical treatment if it believed the treatments were not for Claimant's work injury. If Employer questioned the reasonableness and necessity of the type of treatment or its frequency, it could have submitted the matter for utilization review. Employer also had a remedy for what it describes as its greatest concern, i.e., the cost of the treatment. As noted by the WCJ, Employer downcoded and paid a lesser amount for some of the TMR treatments, which took those bills beyond the penalty petition. Ironically, if Employer had simply downcoded all of the bills, there would have been nothing on which to assess a penalty. Instead, Employer chose to do nothing in the face of mounting medical bills and, as a result, is now subject to a penalty.
CVA, Inc. illustrates that failure to pay or contest bills submitted by a provider may result in a penalty, and suggests that an insurer may avoid penalties by contesting the reasonableness of the treatment or by properly down-coding the bills, which could then be contested by the provider in a fee review proceedings. Insurer here, like the employer in CVA, Inc., attempted to down-code some of the charges and simply refused to pay others. Failure to pay, as seen in CVA, Inc., may result in the filing of a penalty petition by the claimant. Section 435(d)(i) of the Act provides that:
employers and insurers may be penalized a sum not exceeding ten per centum of the amount awarded and interest accrued and payable: Provided, however, That 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. (Emphasis added).
Here, Claimant did not seek penalties for the unpaid bills. Rather, Provider challenged Insurer's down-coding in a fee review proceeding. The remedy for violation of the regulatory down-coding procedures is a finding in favor of provider. 34 Pa. Code §127.207(d). This can hardly be viewed as a "penalty," certainly not as that phrase is used in Section 435 of the Act. The remedy provided by Section 127.207(d) does not relate at all to the "amount awarded" to a claimant, nor is it payable to the same person to whom the compensation is payable. Rather, it merely awards the amount requested by provider as a proper remedy for petitioner's failure to follow the correct procedures.
Where an insurer believes that a billing code different from that submitted by the provider should be used, the insurer must notify the provider in writing of the proposed changes and reasons in support of the changes, and must then give the provider an opportunity to discuss the proposed changes and support the original coding decisions. 34 Pa. Code §127.207; City of Philadelphia and Comp Services v. Medical Fee Review Hearing Office (RJS Industries), 737 A.2d 356 (Pa. Cmwlth. 1999). Failure to strictly comply with these procedures results in the disputes being found in favor of the provider. RJS Indust., 737 A.2d at 359.
Because we conclude that Section 127.207(d) does not impose a "penalty" as defined by Section 435(d)(i) of the Act, we reject Insurer's arguments that the regulation constitutes an unconstitutional penalty.
Provider's Failure to Present Evidence
Insurer next argues that the FRO erred in ruling in Provider's favor despite the fact that Provider failed to present evidence regarding the usual of customary charge for TRM or his actual cost in rendering this treatment. We disagree. First, having concluded that Section 127.207(d) of the Medical Cost Containment Regulations is constitutional, the result reached by the FRO is required. Second, Insurer's objections to the cost of the treatment are irrelevant for the same reasons that the objections in CVA, Inc. were found to be irrelevant. Once the FRO found that Insurer failed to comply with the regulation, a finding in Provider's favor resulted by operation of the regulation. Like the employer in CVA, Inc., however, Insurer is not without a remedy. Had Insurer followed the procedures set forth in the regulation, it could have prevailed, as it did in the one instance where the regulations were followed.
Medicare Reimbursement Mechanism
Finally, Insurer argues that the Workers' Compensation Bureau may not, by regulation, impose an obligation to pay more than 113% of the Medicare reimbursement rate, citing Section 306(e)(3)(i) of the Act, 77 P.S. §531(3)(i). This argument is again unavailing. Having failed to properly contest Provider's charges, those charges are deemed to be correct. In Wertz v. Workers' Compensation Appeal Board (Department of Corrections), 683 A.2d 1287 (Pa. Cmwlth. 1996), the employer was found responsible for the payment of services rendered by a counselor, despite the fact that the counselor was not a licensed practitioner because employer had never requested review of the reasonableness or necessity of such treatment. Similarly, in Johnson v. Workers' Compensation Appeal Board (Albert Einstein Medical Center), 586 A.2d 991 (Pa. Cmwlth. 1991), this Court concluded that where the employer violated the Act by unilaterally refusing to pay medical expenses, the employer was obligated to pay such claims, regardless of whether certain medical expenses submitted were unreasonable.
Accordingly, having found no merit to Insurer's arguments, we affirm the adjudication of the FRO.
/s/_________
KEITH B. QUIGLEY, Senior Judge ORDER
NOW, December 7, 2011, the order of the Fee Review Hearing Officer, dated January 21, 2011, is AFFIRMED.
/s/_________
KEITH B. QUIGLEY, Senior Judge