Opinion
W.C. No. 4-369-843
May 17, 2001
ORDER OF REMAND
The claimant seeks review of a Corrected Order of Administrative Law Judge Wheelock (ALJ), insofar as the ALJ denied her claim for penalties. We set aside the contested portion of the order, and remand for the entry of a new order.
On January 14, 1998, the claimant sustained admitted bilateral upper extremity injuries. Following a hearing on July 13, 1999, the claimant was found to be permanently and totally disabled. On April 20, 1999, Dr. Thomas Higginbotham prescribed "essential home services-laundry, vacuuming, general housekeeping 2-3 days per week at 2 hours per day." Dr. Higginbotham admitted he did not personally provide the prescription to the respondents. However, it is undisputed claimant's counsel mailed the prescription to respondents' counsel prior to May 6, 1999. In correspondence dated May 6, 1999, respondents' counsel denied payment for housekeeping services "pending resolution at hearing."
The record also includes a letter addressed to respondents' counsel, and dated September 7, 1999, in which the claimant's counsel stated "demand is made for immediate provision of essential services as prescribed by Dr. Higginbotham." (Claimant's Exhibit 48). Further, in a letter addressed to claimant's counsel and dated October 6, 1999, respondents' counsel again stated, "respondents deny liability for `essential services' as prescribed by Dr. Higginbotham." (Claimant's Exhibit 49).
In the order on review, the ALJ found that to prevent the claimant's condition from deteriorating, Dr. Higginbotham issued a "prescription for the provision of essential home services." Relying on Grover v. Industrial Commission, 759 P.2d 705 (Colo. 1988), and Atencio v. Quality Care, Inc., 791 P.2d 7 (Colo.App. 1990), the ALJ found that the prescribed services are reasonable and necessary to relieve the claimant from the effects of the work related injury. Therefore, the ALJ ordered that respondents provide essential services in accordance with Dr. Higginbotham's prescription.
The claimant also requested an order imposing penalties for the respondents' failure to comply with the Rules of Procedure XVI (J)(1)(a)(2), 7 Code Colo. Reg. 1101-3 at 77-80, in response to the claimant's request for authorization for housekeeping services. However, finding that the claimant "did not make a request for prior authorization of essential services," the ALJ denied the claimant's request for penalties.
On appeal, the claimant contends the ALJ erred in denying the request for penalties. In particular, the claimant contends the record is contrary to the ALJ's finding that the claimant failed to request preauthorization for essential services. We conclude that further proceedings are necessary to resolve the issue of whether penalties are warranted.
I.
Initially, we note that the claimant's Designation of Record includes the "entire files maintained by the Division of Workers' Compensation and the Division of Administrative Hearings." The record transmitted to us for review apparently does not include the complete Division of Workers' Compensation file. However, our review is limited to the evidentiary record before the ALJ, and there is no evidence in the record which tends to suggest the claimant requested the ALJ consider the entire Division of Workers' Compensation file as part of the evidentiary record for the hearing. See City of Boulder v. Dinsmore, 902 P.2d 925 (Colo.App. 1995); Rules of Procedure, Part VIII(A)(7), 7 Code Colo. Reg. 1101-3 at 22. Consequently, we have not obtained or considered the Division of Workers' Compensation file.
The ALJ made no specific findings of fact concerning the evidence she relied upon to find the claimant failed to prove she requested prior authorization for essential services. Consequently, the ALJ's findings are legally insufficient to ascertain the basis of her determination that the claimant did not make a request for prior authorization of essential services. Therefore, we remand the matter for the entry of additional findings and the entry of a new order on the issue of penalties.
Rule XVI(I)(1) provides that prior authorization for payment shall be obtained from the payer when the prescribed services exceeds the limitations for that service in the medical treatment guidelines or prior authorization is required by the guidelines or medical fee schedule. The parties concede preauthorization was required for the essential services.
Rule XVI(I)(2)(c) states that:
"It shall be the responsibility of the provider to obtain prior authorization for payment from the payer when prior authorization for payment is required by these Rules." (Emphasis added).
Rule XVI(J)(1)(a), provides that where the insurer seeks to deny prior authorization for a requested service, the insurer must do the following within five business days of the receipt of the request for preauthorization:
(1) Have the request reviewed by a medical professional with knowledge and expertise in the contested area; and
(2) Furnish the provider and the parties with a written denial setting forth the following information:
(a) An explanation of the specific medical reasons for the denial . . . .
Rule XVI(J)(1)(a) is designed to prevent the insurer from unreasonably delaying treatment by limiting the time period during which the insurer must review the request. Furthermore, Rule XVI(N) provides that the failure to comply with Rule XVI shall subject the violator to penalties.
The respondents contend that only the provider who expects to render the disputed service may request prior authorization. In this case, the claimant's husband actually "provided" the disputed services. Because the husband did not explicitly request prior authorization for essential services, the respondents contend that they were not required to comply with XVI(J)(1)(a). We disagree.
Rule XVI(B)(1)(k) defines the term "provider" as the person or entity providing authorized health care services to the injured worker. Rule XVI(E) defines "health care providers" to include "physicians" and "non-physicians" explicitly listed. Individuals who perform housekeeping services are not included in the recognized list of "non-physician" health care providers. Consequently, we are not persuaded the rules required the claimant's husband to request prior authorization for the essential services. Our conclusion is buttressed by rule XVI(I)(2)(d) which states that the provider's request for prior authorization shall "explain the medical necessity of the services requested" and provide "supporting medical records."
Here, it was the claimant's primary authorized treating physician, Dr. Higginbotham, who prescribed essential services for the claimant. Consequently, we conclude that Dr. Higginbotham is the "provider" under Rule XVI. This construction of the rule is consistent with the rule's purpose, and insures the medical necessity of the treatment. Therefore, it was Dr. Higginbotham's duty to request prior authorization for the services.
However, the rule does not provide a particular method for requesting prior authorization. Therefore, the critical issue before the ALJ was whether the respondents were provided the request for essential services consistent with Dr. Higginbotham's prescription, an explanation for the medical necessity of the services and all pertinent supporting medical records.
The record contains evidence the provider's prescription and medical justification for the essential services were provided to the respondents. In fact, it is undisputed the respondents explicitly denied two requests for disputed services. However, the sufficiency and probative weight of the evidence are matters solely within the province of the ALJ. Rockwell International v. Turnbull, 802 P.2d 1182 (Colo.App. 1990)
On remand the ALJ shall redetermine whether the claimant made a request for preauthorization and shall make specific findings of fact which articulate the evidence she relied upon to resolve the issue. Based upon that determination the ALJ shall enter a new order on the issue of penalties.
II.
Because the issue of whether penalties are warranted pursuant to § 8-43-401(2)(a), C.R.S. 2000 or § 8-43-304(1), C.R.S. 2000 may arise on remand, we address it now.
In her statement of issues to be addressed by the ALJ, the claimant did not specify whether she was requesting that penalties be assessed under § 8-43-401(2)(a), or § 8-43-304(1). However, the claimant now contends that the appropriate penalty section is § 8-43-304(1). We are unable to ascertain from the ALJ's order whether the ALJ considered the application of penalties under § 8-43-401(2)(a), or § 8-43-304(1). Nevertheless, the claimant contends that the conduct which subjects the respondents to penalties concerns failure to comply with Rule XVI.
Section 8-43-304(1) allows ALJs to impose penalties up to $500 per day for each day the insurer:
" . . . 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 . . . ."
Section 8-43-401(2)(a), which applies to claims arising on or after July 1, 1991, provides that:
"If any insurer or self-insured employer willfully delays payment of medical benefits for more than thirty days or willfully stops payments such insurer or self-insured employer shall pay a penalty to the division of eight percent of the amount of withheld benefits."
In Sears v. Penrose Hospital, 942 P.2d 1345 (Colo.App. 1997), cert. denied, September 15, 1997, the Court of Appeals concluded that the specific penalty provisions of § 8-43-401(2)(a) supersede the general penalty provisions of § 8-43-304(1) where the "gravamen" of the disputed conduct is the insurer's failure to pay medical benefits in a timely fashion. In so doing, the court rejected the notion that the General Assembly intended to create two penalties for the late payment of medical expenses. Rather, the court concluded that the general penalty provisions in § 8-43-304(1) apply only when the Act does not create a "specific penalty" for the violation in question.
In Sears v. Penrose Hospital, supra, the claimant argued that § 8-43-401(2)(a) did not govern a claim for penalties based on the insurer's failure to investigate the reasonableness of prescribed treatment. Although the court did not establish a method for determining the "gravamen" of a claim for penalties, the Sears court rejected the argument that the "gravamen" of the disputed conduct in that case was something other than the failure to pay medical benefits. The court held that the insurer's failure to investigate the reasonableness of the unpaid medical expenses was "necessarily encompassed in the broader question whether the employer willfully delayed or stopped payment" of medical benefits. Id. at 1347. Consequently, the court concluded that § 8-43-402(2)(a) is applicable if the conduct to be penalized is an "underlying act or omission" involving the failure or refusal to provide medical benefits. Id. at 1347.
Here, the ALJ specifically found that the essential household services are reasonable and necessary to relieve the claimant from the effects of the work related injury. The services are therefore necessary "medical treatment." Country Squire Kennels v. Tarshis, 899 P.2d 362 (Colo.App. 1995). It follows that the "gravamen" of the claimant's request for penalties, is the respondents' delayed payment for her reasonable and necessary medical treatment by improperly denying a request for prior authorization of essential services. See Sears v. Penrose Hospital, supra. Under these circumstances, we conclude the penalty claim is governed by § 8-43-402(2)(a).
In reaching our conclusion we recognize that in Holliday v. Bestop, Inc., __P.3d __(Sup.Ct. 99SC742, May 14, 2001), the court concluded penalties may be imposed under § 8-43-304(1), where the penalty claim is based on the insurer's failure to comply with a lawful order for the payment of medical benefits. The court reached this determination regardless of whether the duty imposed was one for which "no penalty has been specifically provided." However, there is no finding or assertion the respondents violated a lawful order to pay for essential services. Moreover, as we indicated, the claimant contends that the conduct which subjects the respondents to penalties concerns failure to properly deny or pay for medical benefits. Therefore, Holliday is not authority contrary to our conclusion.
Furthermore, in cases where § 8-43-401(2)(a) applies, a penalty may not be assessed unless the ALJ determines that the respondents' conduct was both "willful" and "wrongful." Willful means that the action was the result of "deliberate intent," and the term wrongful connotes "unlawful" or "unjust" acts.
Consequently, on remand, the ALJ shall determine whether the respondents violated Rule XVI. If the ALJ finds a violation, the ALJ shall determine whether the violation was willful and wrongful. Based upon these determinations the ALJ shall enter a new order on the claim for penalties.
In remanding the matter, we should not be understood as expressing any opinion concerning whether penalties should be imposed. Rather, our statements should be understood as requiring only that on remand, the ALJ shall consider the request for penalties under the appropriate statute and legal standard.
IT IS THEREFORE ORDERED that the ALJ's Corrected Order dated September 18, 2000, is set aside insofar as it denied penalties, and the matter is remanded to the ALJ for further proceedings in accordance with the views expressed herein.
INDUSTRIAL CLAIM APPEALS PANEL
____________________________________ Kathy E. Dean
____________________________________ Robert M. Socolofsky
Copies of this decision were mailed May 17, 2001 to the following parties:
Cheryl Wilkens, 2843 Valley Hi Ave., Colorado Springs, CO 80910
First Lutheran Church, 1515 N. Cascade Ave., Colorado Springs, CO 80907
Church Mutual Insurance Company, 777 S. Wadsworth, Building One, #207, Denver, CO 80226
Church Mutual, % Nancy Bellin, Church Mutual Insurance Company, P. O. Box 342, Merrill, WI 54452
Steven U. Mullens, Esq., P. O. Box 2940, Colorado Springs, CO 80901-2940 (For Claimant)
Janice M. Greening, Esq., 950 17th St., 21st floor, Denver, CO 80202 (For Respondents)
BY: A. Pendroy