PA WCJ Has Jurisdiction to Assess Penalties for Nonpayment of Medical Bills Related to Work Injury

The Pennsylvania Workers’ Compensation Act (Act) is very specific – a workers’ comp insurance carrier is responsible for the payment of all reasonable and necessary medical expenses, which are related to a work injury.  As always, the devil is in the details.  For example, is the payment of medical bills something which can only be addressed by Fee Review and not by a Workers’ Compensation Judge (WCJ)?

As the Commonwealth Court of Pennsylvania indicated in the recent case of Day-Timers, Inc. v. Rhonda Horton (Workers’ Compensation Appeal Board), a WCJ does, indeed, have jurisdiction to address the nonpayment of medical bills.  But, initially, let’s examine the confusion.

Under the Act, a PA workers’ compensation insurer has 30 days to either pay a medical bill related to a work injury, or file for Utilization Review (UR), which challenges whether such treatment was reasonable and necessary.  If a healthcare provider is not satisfied with the timing or amount of the payment for medical treatment, the provider has the ability to file for Fee Review.  This statutory scheme could lead an insurance carrier to argue that an injured worker cannot file a Petition for Penalties, for the nonpayment of a medical bill, since that is a subject solely for Fee Review.

And that brings us to the Day Timers case.  Here, Alliance Medication Service filled several prescriptions related to the work injury and submitted bills to the workers’ comp insurance carrier.  The insurer paid a small portion of each bill, so Alliance Medication Service filed for Fee Review on each bill.  All of the Fee Reviews were found in favor of Alliance, and the insurance carrier was told to pay Alliance a total of $1,490.25.  The insurance carrier did not dispute any of the Fee Reviews, but simply failed to make the payment.

The injured worker filed a Petition for Review (which in reality appears to have been a Petition for Penalties), since the insurance carrier did not make the payment pursuant to the Fee Review Determinations.  The insurance carrier presented no evidence in this litigation, but simply argued that the WCJ lacked jurisdiction to address this issue (since it pertained solely to the amount of the payment made on medical bills).

After listening to the arguments, and reviewing the evidence and the Act, the WCJ granted the Petition for Review and ordered the insurance carrier to pay a 50% penalty on all unpaid and untimely paid medical bills in this litigation.  Additionally, the WCJ ordered the payment of counsel fees for unreasonable contest.

Not happy with this result, the workers’ compensation insurer appealed to the Workers’ Compensation Appeal Board (WCAB), again arguing that a WCJ lacks jurisdiction to address matters that would fall under Fee Review.  The WCAB rejected this argument, as had the WCJ.  The entire purpose of penalties, said the WCAB, is to assure compliance.  Here, the healthcare provider filed for Fee Review and obtained successful Determinations in that process.  The insurer declined to contest any of the Fee Review Determinations, electing to simply not pay.  According to the WCAB, this made the assessment of penalties and attorney fees completely appropriate.

Deciding to appeal once again, now to the Commonwealth Court of Pennsylvania, the insurer argued that since this “involved a fee review between Provider and Employer,” the WCJ lacked jurisdiction to address the matter.  Insurer was, once again, unsuccessful.

In affirming the WCAB, the Court first noted that the Fee Review process applies to healthcare providers.  There is no prohibition from an injured worker filing a Petition for Penalties when medical bills related to the work injury are not properly paid by the terms of the Act.  As to the merits, there is no dispute that Insurer here failed to pay for medical treatment related to the work injury.  This is a violation of the Act, for which a WCJ is perfectly within their purview to assess penalties and attorney fees.  The Court further observed that the issue before the WCJ was not the amount of the payment made (something which would fall under Fee Review), but instead, “the issue before the WCJ was whether Employer violated the Act by failing to pay the amounts owed under the Determinations.”

As attorneys who represent injured workers throughout the State of Pennsylvania, we are heartened to see this common sense approach by the WCJ, WCAB and the Court.  We are often faced with the situation where an insurer does not properly pay medical bills related to a work injury.  It is nice to see that the insurance carriers cannot just run from those bills and evade their responsibility.