Opinion
W.C. No. 4-683-101.
September 22, 2009.
FINAL ORDER
The respondents seek review of a supplemental order of Administrative Law Judge Friend (ALJ) dated June 19, 2009, that ordered the insurer to pay certain penalties. We affirm in part and reverse in part.
The claimant suffered an industrial injury and sought reimbursement for mileage for authorized medical care. The ALJ found that the respondents were late in providing mileage reimbursement. The ALJ imposed a penalty of $565 for violation of Workers' Compensation Rule of Procedure 16-11 (A), 7 Code Colo. Reg. 1101-3 (2009). The ALJ also found that the insurer was late in payment of temporary total disability (TTD) benefits. The ALJ imposed a penalty of $1,125 for violation of § 8-42-105(2)(a) C.R.S. 2009 and Workers' Compensation Rule of Procedure Rule 5-6(B), 7 Code. Colo. Reg. 1101-3 (2009). The respondents bring this appeal.
I.
The respondents contend that the ALJ erred in assessing a penalty against them for violation of Rule 16-11(A) for failing to reimburse the claimant for a medical mileage request. The respondents argue that legal authority does not support the ALJ's order imposing a penalty for failing to reimburse the claimant for a medical mileage request. The respondents argue that the ALJ erred in imposing penalties for violation of Rule 16-11(A) because the claimant is not a "provider" under such rule. Therefore, the respondents contend they are not liable for violation of Rule 16-11(A) for failing to provide mileage reimbursement within thirty days.
Rule 16-11 (A) concerns uncontested payment for billed medical services. Rule 16-11 (A) provides that all bills submitted by a "provider" are due and payable in accordance with the Medical Fee Schedule within thirty days after receipt of the bill by the payer. Here, the ALJ found that the claimant mailed the request to the insurer on June 5, 2008 and the insurer mailed the check on September 22, 2008. The respondents do not challenge this factual finding. Rather the respondents argue that the claimant made numerous requests for mileage reimbursement and that on June 5, 2008 the claimant submitted two requests for mileage reimbursement each requesting different amounts but within the same timeframes for service. The claims adjuster initially thought one of the letters was a duplicate and so only one request was paid on June 5, 2008 and the second request was not paid until September 29, 2008.
We first note that mileage expenses for travel to attend medical appointments are recoverable as incidental to medical treatment under the Workers' Compensation Act. Sigman Meat Co. v. Indus. Claim Appeals Office, 761 P.2d 265 (Colo. App. 1988). We further note that § 8-43-401(2), provides that insurers shall pay benefits within 30 days of when any benefits are due, and if any insurer willfully delays payment of medical benefits for more than thirty days, such insurer shall pay a penalty of eight percent of the amount of wrongfully withheld benefits. However, penalties were not sought under this section of the Workers' Compensation Act. Instead penalties were sought under the general penalty provisions of § 8-43-304 for violation of Rule 16-11(A).
Rule 16-11(A) provides that an uncontested bill submitted by a "provider" is due and payable within thirty days. However, the court of appeals has held that claimants are not treated as "providers" for purposes of submitting mileage reimbursement requests and are not subject to the presumptive deadline for submission of "bills for services" set forth in Rule 16-11(A). Safeway, Inc. v. Industrial Claim Appeals Office 186 P.3d 103 (Colo. App. 2008). We see no principled distinction between Safeway, Inc. v. Industrial Claim Appeals Office and the situation presented here. Because claimants are not treated as "providers" under Rule 16-11(A), the respondents are not liable for failing to reimburse the claimant within thirty days under the Rule 16-11(A), which only provides for reimbursing providers.
Under the circumstances we conclude that the ALJ erred in granting penalties under the general penalty provision of § 8-43-304 for failure to timely reimburse the claimant for mileage under Rule 16. Accordingly, we reverse that portion of the ALJ's order.
Because we conclude that the ALJ erred in awarding penalties for failure to timely reimburse the claimant for mileage it is unnecessary to address the respondents' remaining argument that the ALJ erred in awarding the claim for penalties under the general penalty provision of § 8-43-304, rather than under § 8-43-401. Additionally we need not consider whether the ALJ erred in determining that, although the respondents had timely cured any violation of Rule 16, the claimant had established by clear and convincing evidence that the insurer knew or should have known that it was in violation of Rule 16-11(A).
II.
The respondents next contend that the ALJ erred in determining that the respondents had failed to issue TTD benefits when due and assessing penalties for violations of § 8-42-105(2)(a) C.R.S. 2009 and Rule 5-6(B). The respondents argue that they should not be penalized because the TTD benefits were "issued" timely. We are not persuaded that the ALJ erred.
Section 8-42-105(2)(a)(2) provides that compensation shall be paid at least once every two weeks. Rule 5-6 requires timely payment of compensation benefits. Rule 5-6 (B) provides as follows:
Temporary disability benefits awarded by admission are due on the date of the admission and the initial payment shall be paid so that the claimant receives the benefits not later than 5 calendar days after the date of the admission. Temporary total disability benefits are payable at least once every two weeks thereafter. . . .so long as the filings are timely and benefits timely paid and for the entire period owed as of the date of the admission, the insurer will be considered in compliance.
The respondents argue that the TTD checks in question here were "issued" timely and that the ALJ erred in assessing a penalty for late "receipt" of these TTD checks. The respondents argue that due to a computer error the insurer's system did not retain a change of address to which the TTD checks should be sent. The respondents further argue that the checks were therefore sent to a previous address and only "received" late. The respondents argue that Rule 5-6 does not state that benefits must be "received" but only paid on a timely basis. The respondents, citing Werne v. Brown 955 P.2d 1053 (Colo. App. 1998) argue that payment of TTD benefits means the checks must be "issued" within the two week period not "received."
We first note that Werne v. Brown involved the payment of past due rent by mail and did not involve a claim under the Workers' Compensation Act. To the extent Werne v. Brown is relevant it held that if payment by mail is authorized the time when payment is made is when a letter properly addressed with postage prepaid, is put in the mail. Here the ALJ found that although advised of a change of address the insurer sent certain checks to the previous address and others were sent to the wrong address. This factual finding is not challenged by the respondents on appeal. Rather the respondents argue that the insurer did not violate Rule 5-6(B) or § 8-42-105(2) because the TTD benefits were issued and mailed timely.
In Werne v. Brown the court noted that when use of the mail is authorized, the vast majority of courts, acknowledging the risk inherent in using the mail, have allocated that risk to the party in control of the transaction. Here the insurer was in control of correctly addressing the payment and we read nothing in Werne v. Brown to prevent the ALJ's awarding penalties for delay in delivery caused by the insurer's error in sending payment to the wrong address. In light of the ALJ's finding that the mail carrying the TTD benefits was not properly addressed we perceive no error in the ALJ's award of penalties for violation of Rule 5-6(B) or § 8-42-105(2).
The respondents next argue that they cured any violation of failing to issue TTD benefits when due and the ALJ's order amounts to the imposition upon them of a strict liability standard. The ALJ did find that the violations of § 8-42-105(2) and Rule 5-6(B) were timely cured. However, the ALJ found that the insurer knew or should have known that it was in violation of its requirement to pay the TTD on a timely basis.
The ALJ found that certain TTD benefits owed to the claimant were late because the payments "fell off the insurer's "autopay" system. The ALJ further found that the insurer was aware that payments occasionally "fall off autopay and that the insurer knew that consequently some TTD payments would be late. In this regard, the ALJ found that the respondents were aware of this problem but did not fix it.
The respondents argue that there was absolutely no evidence in the record to support the ALJ's finding that the insurer was aware that payments occasionally fell off autopay and that the insurer knew that some TTD payments would be late under the system. The respondents argue that the claims adjuster testified that there were only two occasions when the autopay system issued late TTD checks in this case and both occurrences happened when she was out of the office and unable to correct the problem until her return. Therefore, the respondents argue that the ALJ erred in assessing penalties against the respondents in light of their cure of any violation of § 8-42-105(2) and Rule 5-6(B).
If an insurer cures a violation within twenty days after the filing of the application for hearing, no penalty may be imposed unless it is proven by clear and convincing evidence that the insurer knew or reasonably should have known it was in violation. Section 8-43-304(4); Diversified Veterans Corporate Center v. Hewuse, 942 P.2d 1312 (Colo. App. 1997). The question of whether a factual proposition has been proven by clear and convincing evidence is one of fact for the ALJ, and is reviewable on the substantial evidence standard. Metro Moving Storage Co. v. Gussert, 914 P.2d 411 (Colo. App. 1995).
In our view, the ALJ's determination that the insurer was aware that payments occasionally fall off autopay and consequently knew some TTD payments would be late is supported by substantial evidence in the record. The claims adjuster testified that a TTD payment was issued late because it fell off the insurer repetitive pay system for some reason. Tr. 64. The claims adjuster testified that although she had tried to figure out how that happened she had not been able to do so. Tr. 64. The claims adjuster also testified that a second TTD check was late because the prior payment had fallen off. Tr. 65-66. The claims adjuster agreed that the insurer had the responsibility to pay TTD benefits every two weeks. Tr. 75. The claims adjuster testified that this was not the only claim where a claimant's TTD check had fallen off the automated pay system of the insurer. Tr. at 79. The claims adjuster testified that late payments unfortunately happen from time to time. Tr. at 79.
Despite the respondents arguments to the contrary, in our view this evidence supports the ALJ's inference the insurer was aware that payments occasionally fell off autopay and that the insurer knew that some TTD payments would be late under the system. Therefore, we perceive no reversible error in the ALJ's factual determination that the claimant had proven by clear and convincing evidence the insurer knew or should have known that it was in violation and therefore a penalty should be assessed.
IT IS THEREFORE ORDERED that the ALJ's order dated June 19, 2009 is reversed insofar as it ordered the respondents to pay $565 for failure to reimburse the clamant for mileage in violation of rule 16-11(A).
IT IS THEREFORE FURTHER ORDERED that the ALJ's order issued June 19, 2009 is otherwise affirmed.
INDUSTRIAL CLAIM APPEALS PANEL
______________________________ Curt Kriksciun
______________________________ Thomas Schrant
BETTY J HIGUERA, 523 CENTENNIAL ROAD, GRAND JUNCTION, CO, (Claimant).
BETHESDA FOUNDATION, Attn: DAN VAGLE, COLORADO SPRINGS, CO, (Employer).
INSURANCE COMPANY OF THE STATE OF PENNSYLVANIA, Attn: KELLY THOMPSON, C/O: SPECIALTY RISK SERVICES, DENVER, CO, (Insurer).
KILLIAN, JENSEN DAVIS, PC, Attn: AMY K EATON-FITZPATRICK, ESQ., GRAND JUNCTION, CO, (For Claimant).
TREECE, ALFREY, MUSAT BOSWORTH, PC, Attn: CHRISTOPHER P. AHMANN, ESQ., DENVER, CO, (For Respondents).