Opinion
No. 197 C.D. 2013
09-18-2013
Mohawk Industries, Inc., Petitioner v. Workers' Compensation Appeal Board (Weyant), Respondent
BEFORE: HONORABLE RENÉE COHN JUBELIRER, Judge HONORABLE MARY HANNAH LEAVITT, Judge HONORABLE ROCHELLE S. FRIEDMAN, Senior Judge
OPINION NOT REPORTED
MEMORANDUM OPINION BY JUDGE COHN JUBELIRER
Mohawk Industries, Inc. (Employer) petitions for review of the Order of the Workers' Compensation Appeal Board (Board) that affirmed, as modified, the Decision of a Workers' Compensation Judge (WCJ) that granted the Claim Petition and Penalty Petition (together, Petitions) of Kenneth Weyant (Claimant); ordered Employer to reimburse all of Claimant's unpaid medical expenses, including those already paid by Claimant's health insurer; and assessed a 20% penalty on the amount of the bill for Claimant's spinal surgery. On appeal, Employer argues that it should not be required to reimburse Claimant or his medical insurer for medical expenses paid by the health insurer and that the WCJ erred in assessing the 20% penalty because Employer did not violate the Workers' Compensation Act (Act).
Act of June 2, 1915, P.L. 736, as amended, 77 P.S. §§ 1 - 1041.4, 2501 - 2708.
Claimant's injury occurred on May 25, 2010 when he fell to the ground after suffering a diabetic seizure while operating a forklift. (WCJ Decision, Findings of Fact (FOF) ¶ 1.) Employer filed a Notice of Compensation Denial (NCD) in which it acknowledged the fall, but denied that Claimant was disabled as a result. (FOF ¶ 1.) The NCD stated that Employer agreed "to pay medical treatment for upper back & neck pain as a result of the fall only." (NCD at 1, R.R. at 19a.) On October 18, 2010, Claimant filed a Claim Petition alleging injuries to his "upper back and neck, resulting in radiculopathy into both upper extremities." (Claim Petition at 1, October 18, 2010, R.R. at 1a; FOF ¶ 2.) On the same date, Claimant filed a Penalty Petition alleging that Employer violated the Act by failing to timely pay for treatment of Claimant's work injury, which the Penalty Petition alleged Employer accepted through issuance of the NCD. (Penalty Petition at 2, R.R. at 12a; FOF ¶ 3.) On January 10, 2011, Claimant filed an additional Claim Petition for permanent disfigurement in the nature of a cervical scar from spinal surgery. (Claim Petition at 1, January 10, 2011, R.R. at 5a; FOF ¶ 4.)
The Petitions were assigned to a WCJ, who held hearings on November 19, 2010, January 14, 2011, June 3, 2011, and August 19, 2011. Claimant testified on his own behalf and presented the deposition testimony of his treating physician, Arnold G. Salotto, M.D. Employer presented the testimony of its human resource manager, an employee who was present at Claimant's accident, and the deposition testimony of Lucian Bednarz, M.D. Relevant to this appeal, Dr. Salotto testified that, as a result of his fall at work, Claimant's pre-existing spinal stenosis, degenerative disc disease, and bone spurs were aggravated and Claimant developed a disc herniation. (FOF ¶ 44.) The WCJ found that Claimant's work-related injury necessitated Claimant's surgery, an anterior cervical discectomy fusion and plating performed by Dr. Salotto on July 13, 2010. (FOF ¶ 44.) The WCJ found that despite the fact that Dr. Bednarz acknowledged that Claimant suffered neck pain as a result of the fall and the bill for the surgery was properly submitted to Employer, Employer did not make payment of the bill within 30 days. (FOF ¶ 45.) Therefore, the WCJ held that Employer violated Section 306(f.1) of the Act and assessed a 20% penalty on the amount of the surgical bill, $25,576.91. (FOF ¶ 45; WCJ Decision, Conclusions of Law (COL) ¶ 4.) In addition, based on his finding that "[s]ome of Claimant's [medical] bills are being paid by BlueCross[/]BlueShield," (FOF ¶ 15), the WCJ ordered Employer to reimburse medical expenses paid by BlueCross/BlueShield. (WCJ Decision at 10.)
Employer briefly argues that the WCJ's finding that Dr. Bednarz acknowledged that Claimant's neck pain was caused by the fall was not supported by substantial evidence. However, as Employer quotes in its brief, Dr. Bednarz testified that "I think as a result of the fainting episode, [Claimant] subsequently had neck pain as a result of the fall." (Employer's Br. at 30 (quoting Bednarz's Dep. at 20, R.R. at 97a).) Thus, the WCJ's finding in this regard was supported by substantial evidence.
77 P.S. § 531. Relevant to this case, Section 306(f.1)(5) provides that an employer must pay a claimant's medical bills within 30 days of receipt. 77 P.S. § 531(5).
In addition, the WCJ granted Claimant's Claim Petition alleging disfigurement due to Claimant's surgical scar and awarded benefits for 18 weeks. (COL ¶ 6.) Employer argued before the Board that the award for disfigurement "should not be payable while Claimant is still receiving total disability benefits." (Board Op. at 7.) The Board noted that this issue had been resolved by stipulation of the parties and neither party makes any argument before this Court regarding the disfigurement award.
Employer appealed to the Board, arguing that the WCJ erred in granting Claimant's Penalty Petition because Employer never accepted liability for Claimant's neck injury and that the WCJ erred in ordering reimbursement of medical expenses paid by BlueCross/BlueShield because the health insurer had not filed a subrogation lien. The Board held that when an injury is recognized by an Employer and further medical attention reveals an additional diagnosis to the same part of the body, the employer bears the burden of proving that the new diagnosis is not work-related. (Board Op. at 3 (citing Body Shop v. Workers' Compensation Appeal Board (Schanz), 720 A.2d 795 (Pa. Cmwlth. 1998).) An employer that refuses to pay medical bills for the new condition accepts the risk that it will be subject to penalties if a WCJ later determines that treatment for the condition is work-related. (Board Op. at 3 (citing Listino v. Workmen's Compensation Appeal Board (INA Life Insurance Co.), 659 A.2d 45 (Pa. Cmwlth. 1995).) The Board held that, through the NCD, Employer accepted an injury to Claimant's neck. (Board Op. at 5-6 & n.4.) The Board held further that the WCJ properly determined that the surgery to Claimant's neck was necessitated by his work injury and, thus, Employer was subject to penalties for refusing to pay for the surgery. (Board Op. at 5-6.)
The Board also rejected Employer's argument that the WCJ's Decision requiring Employer to reimburse medical expenses paid by Claimant's health insurer constituted payment of a subrogation lien. The Board held that, even where no subrogation lien is asserted, an employer may not avoid paying for medical expenses for which it is liable even if a third party has already paid the expenses. (Board Op. at 6.) Citing Frymiare v. Workmen's Compensation Appeal Board (D. Pileggi & Sons), 524 A.2d 1016, 1019 (Pa. Cmwlth. 1987), the Board held that the WCJ's Decision properly directed reimbursement of medical expenses to Claimant, even if the expenses had already been paid by third parties, including Claimant's health insurer. (Board Op. at 7.) Thus, the Board held that the WCJ had not ordered payment of a non-existent subrogation lien. (Board Op. at 7.) Employer now petitions this Court for review.
Commissioner Frioni filed a concurring opinion stating that, while he believed the Board's application of Frymiare was correct, he argued that it led to an unjust result, resulting in a windfall to Claimant and rising health care costs. (Board Op. at 9 (Frioni, Concurring).)
This Court's review is "limited to determining whether an error of law was committed, whether necessary findings of fact are supported by substantial evidence and whether constitutional rights were violated." DeGraw v. Workers' Compensation Appeal Board (Redner's Warehouse Markets, Inc.), 926 A.2d 997, 999 n.2 (Pa. Cmwlth. 2007).
Before this Court, Employer argues that: (1) the WCJ erred in assessing the 20% penalty against Employer because Employer did not violate the Act by refusing to pay for Claimant's surgery; and (2) where Claimant's health insurer paid for the surgery, but did not file a subrogation lien during the pendency of the matter, Employer is not obligated to reimburse either the health insurer or Claimant. We first address Employer's argument that the WCJ erred in assessing a penalty against Employer because Employer did not violate the Act.
Section 435(d) of the Act, 77 P.S. § 991(d), provides that penalties may be assessed for violations of the Act or the Board's regulations. An employer must violate the Act before a penalty may be assessed against it under this provision. Snizaski v. Workers' Compensation Appeal Board (Rox Coal Co.), 586 Pa. 146, 161, 891 A.2d 1267, 1276 (2006). The WCJ and the Board found that Employer violated Section 306(f.1) of the Act, 77 P.S. § 531, by unreasonably delaying payment for Claimant's surgery. Section 306(f.1)(5) provides, in relevant part, that an employer must pay a claimant's medical bills within 30 days of receipt. 77 P.S. § 531(5).
Added by Section 3 of the Act of February 8, 1972, P.L. 25.
Employer argues that it had no obligation during the pendency of the Claim Petition to pay for Claimant's surgical bills. An employer may, through an NCD, accept a work injury for medical purposes only but deny that the claimant suffers disability as a result of the injury. Zuchelli v. Workers' Compensation Appeal Board (Indiana University of Pennsylvania), 35 A.3d 801, 806-07 (Pa. Cmwlth. 2011) (citing Forbes Road CTC v. Workers' Compensation Appeal Board (Consala), 999 A.2d 627, 629 (Pa. Cmwlth. 2010)). In this case, Employer accepted liability for an injury to Claimant's neck and back by stating on the NCD that "Carrier will agree to pay medical treatment for upper back & neck pain as a result of the fall only." (NCD at 1, R.R. at 19a.) Employer argues that, through the NCD, it only accepted liability for medical expenses resulting from Claimant's fall, not for all medical expenses. However, the WCJ determined that Claimant's surgery was necessitated by his fall. (FOF ¶ 45.) Once an employer accepts liability for an injury, it has an absolute duty to pay the claimant's medical bills until a determination is made that the liability no longer exists. Listino, 659 A.2d at 47; Gens v. Workmen's Compensation Appeal Board (Rehabilitation Hospital of Mechanicsburg/Aetna Life and Casualty), 631 A.2d 804, 807 (Pa. Cmwlth. 1993). An employer disputing the causal connection between a work-related injury and medical treatment may file a petition to review medical treatment. CVA, Inc. v. Workers' Compensation Appeal Board (Riley), 29 A.3d 1224, 1229 (Pa. Cmwlth. 2011). However, "[a]n employer who unilaterally ceases payment of a claimant's medical bills based solely on causation assumes the risk that it will be subject to penalties, contingent upon a WCJ's ruling concerning the causal relation of the medical costs." Roadway Express, Inc. v. Workers' Compensation Appeal Board (Iwasko), 723 A.2d 1076, 1079 (Pa. Cmwlth. 1999) (citing Listino, 659 A.2d 45) (emphasis added).
In the context of workers' compensation claims, the term "[d]isability is synonymous with a loss of earning power." Coyne v. Workers' Compensation Appeal Board (Villanova University), 942 A.2d 939, 945 n.7 (Pa. Cmwlth. 2008).
Employer argues at length why it would have been inappropriate for Employer to file a petition for utilization review when it disputed causation. We observe, however, that a petition for review of medical treatment is quite different from a petition for utilization review. See Bloom v. Workmen's Compensation Appeal Board (Keystone Pretzel Bakery), 677 A.2d 1314, 1318 (Pa. Cmwlth. 1996) (stating that "[a]n action concerning causation cannot be raised before a [utilization review organization]; therefore it must be raised in a petition that is intended to be heard directly by a WCJ," but that "an action concerning the reasonableness and necessity of treatment is to be raised in a request for [utilization review] that will be submitted to a URO").
Employer argues that the WCJ erroneously based the award of the penalty on the fact that Employer did not request utilization review of Claimant's medical treatment. The WCJ found that the expense for Claimant's surgery was "not currently under utilization review." (FOF ¶ 45.) The Board held that this was merely an observation relating to the fact that the medical bill was currently due and payable, rather than tolled pursuant to the Board's regulations relating to utilization review. (Board Op. at 6 n.3.) We agree that, in context, the WCJ's observation is not faulting Employer for not requesting utilization review, but for failing to pay a currently due workrelated medical expense.
Here, Employer unilaterally refused to pay for Claimant's surgery solely on the belief that it was not causally related to Claimant's injury and thereby assumed the risk that the WCJ would later find otherwise. Because the cervical disc herniation and aggravation of Claimant's pre-existing spinal stenosis, degenerative disc disease, and bone spurs were caused by Claimant's work-related neck and back injury (FOF ¶ 44), which the Employer acknowledged through the NCD, Employer violated Section 306(f.1) by refusing to timely pay for the treatment of these conditions, even though it was contesting the Claim Petition.
Employer argues that even if it did violate the Act, the WCJ abused his discretion by granting the Penalty Petition. When an employer has been found to have violated the Act, whether to assess penalties and the amount of the penalties assessed is within the discretion of the WCJ. City of Philadelphia v. Workers' Compensation Appeal Board (Sherlock), 934 A.2d 156, 160-61 (Pa. Cmwlth. 2007). "Absent an abuse of discretion by the WCJ, this [C]ourt will not overturn a WCJ's assessment of penalties. An abuse of discretion is not merely an error of judgment but occurs when the law is misapplied in reaching a conclusion." Id. at 161 (internal citations omitted). Employer argues that the WCJ abused his discretion in awarding the penalty because, at the time Employer refused to pay for Claimant's surgery, the Claim Petition was still pending and an order had not been issued imposing an obligation on Employer to pay Claimant's medical bills. However, as discussed above, Employer accepted responsibility for the medical bills arising from Claimant's work-related injury through the NCD. It is well-established that, by refusing to pay Claimant's medical expenses and not filing a petition to review medical treatment, Employer assumed the risk that it would be liable for penalties if Claimant's medical treatment was subsequently determined to arise from his work-related injury. Roadway Express, 723 A.2d at 1079. Therefore, the WCJ's Decision to grant the Penalty Petition was not an abuse of discretion.
Employer also argues that its delay in paying Claimant's medical expenses was not unreasonable or excessive; therefore, it should be subject to, at most, a 10% penalty. Section 435(d)(i) provides that a 10% penalty may be imposed for violations of the Act, but that the penalty may be increased up to 50% "in cases of unreasonable or excessive delays." 77 P.S. § 991(d)(i). Again, Employer bases this argument solely on its assertion that it had no obligation to pay the disputed medical bills while the Claim Petition was pending. We reject this argument for the reasons discussed above. --------
We next address Employer's argument that the WCJ and the Board erred in ordering reimbursement, to either Claimant or to BlueCross/BlueShield, of medical bills that have already been paid by BlueCross/BlueShield. Employer argues that reimbursement to the health insurer is improper because it filed no subrogation lien and reimbursement to Claimant would constitute a windfall. The WCJ's Decision stated:
[Employer] is ordered to pay for all past, present, and future causally related, reasonable, and necessary medical treatment incurred, or to be incurred, in conjunction with Claimant's aforementioned work-related injury, including the reimbursement of medical expenses paid by BlueCross[/BlueShield].(WCJ Decision at 10 (alteration in original).) The WCJ Decision is ambiguous as to whether it is Claimant or BlueCross/BlueShield who should be reimbursed for medical expenses paid by BlueCross/BlueShield. Employer is correct that no reimbursement to BlueCross/BlueShield is possible because Claimant's health insurer did not file a subrogation lien during the litigation before the WCJ. Section 319 of the Act provides that where an employer or insurer pays medical expenses to an employee:
on the basis that the injury and disability were not compensable under [the Act] in the event of an . . . award for that injury the employer or insurance company who made the payments shall be subrogated out of the . . . award to the amount so paid, if the right to subrogation . . . is established at the time of the hearing before the [WCJ] or the [B]oard.77 P.S. § 671 (emphasis added). However, this provision "is not self-executing and must be asserted with reasonable diligence." Independence Blue Cross v. Workers' Compensation Appeal Board (Frankford Hospital), 820 A.2d 868, 872 (Pa. Cmwlth. 2003). If a subrogation claim is not asserted during the pendency of the claim proceeding, it is lost. Id. Therefore, to the extent that the Decision of the WCJ and Order of the Board direct reimbursement to BlueCross/BlueShield, they are in error.
The Board interpreted the WCJ's Decision as directing "payment to Claimant of medical expenses already paid by third parties." (Board Op. at 7 (emphasis added).) However, both Employer and Claimant argue that Claimant has never sought reimbursement for medical bills paid by Claimant's health insurance. "Allowing the WCJ to grant more relief than [a party] has requested 'is prejudicial to the [other party], who, never having been put on notice that'" such relief was sought, "'has no opportunity to defend against it.'" Badyrka v. Workers' Compensation Appeal Board (Clarks Summit State Hospital), 729 A.2d 182, 185 (Pa. Cmwlth. 1999). In this case, Claimant submitted only his unpaid medical bills into evidence before the WCJ, along with the bill for his surgery, which he submitted only for purposes of the Penalty Petition. (Hr'g Tr. at 6-7, June 3, 2011.) Thus, Employer was not put on notice that Claimant was seeking reimbursement for medical bills paid by Claimant's health insurance. Without such notice, Employer was unable to mount a defense or argue, for example, that it should have been entitled to a credit because it provided Claimant's medical insurance. See, e.g., Frymiare, 524 A.2d at 1019 (holding that an employer may be entitled to a credit where it has provided a health plan that paid for medical expenses stemming from a work-related injury). Because Claimant never sought to be reimbursed for medical expenses paid by BlueCross/BlueShield, the Order of the Board was in error insofar as it required such reimbursement to Claimant.
For these reasons, we reverse the Order of the Board to the extent that it requires Employer to reimburse medical expenses that have been paid by BlueCross/BlueShield and affirm in all other respects.
/s/ _________
RENÉE COHN JUBELIRER, Judge ORDER
NOW, September 18, 2013, the Order of the Workers' Compensation Appeal Board in the above-captioned matter is hereby REVERSED insofar as it orders reimbursement of medical expenses paid by BlueCross/BlueShield and is hereby AFFIRMED in all other respects.
/s/ _________
RENÉE COHN JUBELIRER, Judge