Opinion
BOARD No. 06168790
Filed: July 25, 1997
REVIEWING BOARD DECISION
(Judges McCarthy, Maze-Rothstein and Smith)
APPEARANCES
Thomas F. Grady, Esq., for the employee.
Arthur Jackson, Esq., for the self-insurer.
Both parties appeal from a decision awarding the employee § 30 health care services for chiropractic treatments from March 23, 1991 until January 10, 1996. The judge awarded a G.L.c. 152, § 8 (5) penalty for failure to pay those bills in a timely fashion, and ordered payment of future § 30 medical benefits of no more than 104 chiropractic treatments per year. The self-insurer appeals all of the above orders.
The judge denied the employee's requests for penalties under § 8 (1) and § 14 (1). The employee appeals the determination regarding the course of his future chiropractic treatment — agreeing with the self-insurer that the prospective order of 104 treatments per year is arbitrary and capricious. He also challenges the denial of a penalty under § 8 (1) for late payment of medical bills that the employee had paid himself.
We agree with the parties and reverse the award of 104 future chiropractic treatments per year. Further, we reverse the denial of the § 8 (1) penalty, based upon the circumstances of this case. Finally, we affirm the § 8 (5) penalty assessed on the "additional compensation" awarded at hearing.
On November 1, 1990, the employee who worked for twenty-three years as the Chief Engineer of the Physical Plant at the University of Lowell, injured his back when while checking a hot water problem in the campus gymnasium, he fell four to six feet from a beam onto a concrete floor. (Dec. 25.) He has not returned to work since that date, and has been treating with a chiropractor. (Dec. 26.) While the self-insurer accepted the injury, paying § 34 temporary total benefits for the employee's incapacity (Dec. 24; Tr. 4), it failed to pay for any of the employee's chiropractic treatments from March 23, 1991 onward. (Dec. 28.)
A § 10A conference order issued on June 15, 1992 denied the self-insurer's request to discontinue weekly incapacity payments, and ordered the self-insurer to pay § 30 medical benefits. (Dec. 30, Employee Ex. 3.) The self-insurer did not appeal that order; nor did it pay any of the chiropractic bills submitted for payment. (Dec. 29.) Sometime before the 1995 conference, the employee began to pay for chiropractic treatments out of his own pocket, as payment was not forthcoming from the self-insurer. (Dec. 33; Tr. 22, 27.)
The employee filed the subject claim for § 30 medical benefits. His claim for § 8 (1) and (5) penalties against the self-insurer for its failure to timely pay his chiropractic bills from 1991 onward, was joined at the conference proceedings.
He also sought a § 14 (1) penalty for frivolous defense of his claim for payment of his medical bills. (Dec. 24-25.) The § 14 (1) claim was consistently and permissibly denied throughout the proceedings and, because it has no bearing on this appeal, will not be mentioned again.
On January 10, 1995 after a § 10A conference, a § 30 order of payment issued, which provided that "the insurer . . . pay for all chiropractic services rendered to the employee from March 23, 1991 to the present. . . . Should this order be appealed, I allow the insurer to escrow the payment for all services rendered after May 1, 1991." The employee's claims under § 8 (1) and (5) were also denied. (Employee Ex. 5.) The self-insurer appealed that order to a hearing de novo. In the interim, it neither paid any of the chiropractic bills, nor did it escrow any funds to provide for such payment. (Dec. 25.)
Since there is nothing in the Act which authorizes an administrative judge to order the establishment of an escrow account for payment of benefits, contingent on the outcome of the hearing de novo, we note the error in the judge's order to that effect. We treat the judge's conference order as a plain order of payment of § 30 medical benefits.
When the case came on for hearing on July 17, 1995, the self-insurer still had not paid a single chiropractic bill from March 23, 1991 onward. (Dec. 28.) The employee underwent a § 11A examination. The physician diagnosed chronic lumbar back pain with concomitant muscular spasm associated. He opined that the employee's chiropractic treatments over the past five years were "very definitely" reasonable and necessary, and that the employee should receive treatments for as long as he finds them helpful. (Dec. 27-28.) The judge adopted this opinion (Dec. 28), and ordered payment for all chiropractic services from March 23, 1991 until January 10, 1996. (Dec. 37.)
While the decision refers to a § 11A examination, since only medical bills and penalties were in dispute, § 8 (4) would have been the appropriate statutory mechanism because it operates where the dispute is solely a question of whether treatments are reasonable and necessary. See G.L.c. 152, § 8 (4). Under the circumstances, we view this error as harmless.
The judge then addressed whether the self-insurer's failure to pay the chiropractic bills — all of which were subject to the January 10, 1995 conference order — was a violation of the penalty provisions of § 8 (1). He stated:
§ 8 (1) provides for a penalty of up to $10,000 for the failure "to make all payments due an employee under the terms of an order, decision,. . . ." The Commonwealth, in failing to pay for the chiropractic treatment received by the employee between March 23, and May 1, 1991, that I ordered on January 10, 1995 (employee's exhibit 5) has ignored my express and binding order for 365 days; a time frame far in excess of the 90 days necessary to trigger the $10,000 penalty. If one were to interpret [the] June 15, 1992 order (employee's exhibit 3) as requiring payment for chiropractic treatment, then the length of the Commonwealth's obstinance is three and a half years.
In many cases, the nonpayment of medical bills for several years leads to the deprivation of the needed medical treatment. Fortunately for the employee in this case, the chiropractic treatment continued, although it did so only because he was able to shoulder the costs himself. It is with severe misgivings, that I rely on Diaz [v. Western Bronze, 9 Mass. Workers' Comp. Rep. 528 (1995) (concluding the § 8 (1)'s "payments due the employee" does not include payment of bills to medical providers)] to exempt the Commonwealth from the payment of a $10,000 penalty pursuant to § 8 (1).
(Dec. 32, 34; see Employee's Ex. 2 (§ 11A report wherein it is noted that further chiropractic care was denied after May 1, 1991; that itemized bills for further treatments between June 1, 1991 and July 30, 1993 were submitted for review; and that the employee was paying for the treatments out of his own pocket)).
The judge, however, did order the self-insurer to pay the employee a penalty under § 8 (5), for its failure "to make any payments required under this chapter. . . ." Under that statutory provision, when "additional compensation is later ordered, the employee shall be paid by the insurer a penalty equal to twenty percent of the additional compensation due on the date of such finding." (Dec. 34.) The employee was awarded a penalty equal to twenty percent of the total amount due to his chiropractor for the nearly five years of treatment at issue as of the filing of his decision on January 10, 1996. (Dec. 35.) And, prospectively, the self-insurer was ordered to pay for the employee's chiropractic treatment, not to exceed 104 treatments per year. (Dec. 37-38.) Both parties appeal to the reviewing board.
We address two issues raised by the employee and the § 8 (5) award. The employee argues that the order of future chiropractic treatment is erroneous. Moreover, he asserts that the denial of § 8 (1) penalty was contrary to law.
The § 8 (1) Penalty
First, we turn to the disposition of the employee's claim for a § 8 (1) penalty. G.L.c. 152, § 8 (1) provides, in pertinent part:
Any failure of an insurer to make all payments due an employee under the terms of an order . . . shall result in a penalty payable to the employee to whom such payments were required to be paid . . . of ten thousand dollars if not made within ninety days. No penalty shall be assessed a self-administered public employer . . . where delivery has been made to the employee . . . of a copy of an official request made by such employer . . . to the appropriate authority for the issuance of a check in the appropriate amount. . . .
(Emphasis supplied).
The judge noted in his analysis of the § 8 (1) penalty issue, that the employee's self-payment of his chiropractic bills might have an impact on the attachment of a penalty for the insurer's failure to timely pay. The judge posed and answered the query thus:
The employee has paid for his chiropractic treatment out of his own pocket. Therefore, the money for the payment of the chiropractic bills will go to the employee, and not to a third party. Does this fact pattern negate the holding (sic) of Diaz? There is no case on this point. With some misgivings, I rule that the analysis of the immediately preceding paragraph [describing Diaz and its application to the payments to be made directly to the chiropractor] is applicable in this case. The legislative intent appears to be to preclude § 8 (1) penalties for the reimbursement of medical bills.
(Dec. 33.) The employee argues that the above determination is erroneous. We agree, and reverse the judge's denial of a § 8 (1) penalty for the self-insurer's failure to timely reimburse the employee for self-paid chiropractic treatments.
The judge misread Diaz v. Western Bronze, 9 Mass. Workers' Comp. Rep. 528 (1995). In it the reviewing board concluded that the phrase used in § 8 (1), "payments due an employee," refers only to those payments ordered to be made directly to the employee, not to amounts due medical providers for treating work-related injuries. Id. at 533. However, that is not everythingDiaz said.
Indeed, in Diaz we also recognized that the plain meaning of § 8 (1)'s "payments due an employee" necessarily includes "instances when the employee has personally paid for reasonable and necessary treatment expenses out of his own pocket." Diaz at 533, n. 4. See also Graham v. Malden Hospital, 10 Mass. Workers' Comp. Rep. 513 (1996) ("the § 8 (1) penalties would be due where the employee had paid the medical bill and then made a claim for reimbursement.")
This is exactly what happened here. After the self-insurer contravened the June 15, 1992 order of payment for "medical expenses", specifically the chiropractic bills dating back to March 1991 for at least one year, the employee started to pay per visit. (Employee Ex. 3; Tr. 22, 27.) When the judge issued his January 10, 1995 conference order requiring payment of all outstanding bills (Employee Ex. 5), many of which were self-paid, the 8 (1) clock began ticking. By April 15, 1995, over ninety days from when the self-insurer certainly would have received the judge's order, the unpaid reimbursement, "payments due the employee," qualified the employee for the maximum $10,000 penalty available under § 8 (1). The judge should have awarded the penalty in his January 10, 1996 decision. We reverse his denial and award the payment under § 8 (1).
We reiterate that the judge's order allowing the self-insurer to escrow the necessary funds pending its appeal was beyond the scope of his authority. We consider the self-insurer's disregard of that unauthorized vehicle as the simple non-payment that it was.
We note in passing that the Commonwealth, as a "self-administered public employer" was only required to make timely delivery "to the employee or other recipient of a copy of an official request made by such employer . . . to the appropriate authority for the issuance of a check in the appropriate amount to said recipient" to avoid the accrual of a penalty. G.L.c. 152, § 8 (1). There is no contention that any such delivery of an official request was ever made in this case.
The Order of Future Chiropractic Treatment
The order, "[t]hat the Commonwealth pay for not more than 104 chiropractic treatments per year, beginning in 1996, pursuant to §§ 13 and 30" (Dec. 38), is erroneous. As the reviewing board stated in Pagnani v. Demoulas/Marketbaskets, 9 Mass. Workers' Comp. Rep. 4 (1995):
That order is too far reaching, because it fails to take into consideration the possibility of a change in the employee's medical picture down the road. Medical conditions are rarely static, and present . . . need for treatment does not presuppose there will be [the same] future necessity for treatment.
Id. at 5. The order of 104 treatments per year, while appearing generous at first blush, could actually result in either an arbitrary denial or an allowance of excessive coverage for the employee's work-related treatments. See Fragale v. MCF Industries, 9 Mass. Workers' comp. Rep. 168, 173 (1995) (judge may not deny future treatment if both causally related to, and reasonable and necessary for the aftermath of an industrial accident). See also Colon v. Andover Courtyard/Marriott, 9 Mass. Workers' Comp. Rep. 9, 11 (1995) (vacating denial of future chiropractic treatment). As the conclusion that the employee be limited to 104 treatments per year into the indefinite future is speculative and, therefore, arbitrary, we reverse that order. SeeChadwick v. Chadwick Greenhouse, Inc., 9 Mass. Workers' Comp. Rep. 12, 14 (1995).
Section 8 (5) Penalty
The penalty provision of § 8 (5) was enacted in 1985, as part of the reform effort to eliminate payment delays. L. Locke, Workmen's Compensation § 1.1 at 7 (Nason Wall Supp. 1995). Section 8 (5) reads in pertinent part:
Except as specifically provided above, if the insurer . . . fails to make any payments required by this chapter, and additional compensation is later ordered, the employee be paid by the insurer a penalty equal to twenty per cent of the additional compensation due on the date of such finding.
G.L.c. 152, § 8 (5), as inserted by St. 1985, c. 572, § 21.
We construe the term "any payments required by this chapter" to include health care services specifically awarded at conference. Chapter 152, § 17 provides that an insurer must immediately comply with a conference order for payment of compensation, even though the order is under appeal. Medical benefits are "compensation". See Boardman's Case, 365 Mass. 185, 192-193 (1974). Conference orders of payment are enforceable. See G.L.c. 152, § 12. Thus, the Act requires the insurer's prompt payment of medical bills specified in a conference order.
Although the Act contains special provisions for payment to public employees, these provisions do not exempt the Commonwealth from the same obligations. The penalty for noncompliance is now not only on a graduated scale based on the degree of delay (§ 8 (1)), but also there is a 20% charge against the "additional compensation due." The judge's § 8 (5) penalty was sound.
General Laws c. 152, § 86 requires the Division of Dispute Resolution to send a certified copy of the conference order to the Commissioner of Public Employee Retirement. There a payment voucher is certified and submitted to the state treasurer who issues the payment. See G.L.c. 152, §§ 69B and 70.
We therefore award the employee $10,000 for the self-insurer's failure to make payments due the employee, within ninety days of the judge's January 10, 1995 conference order requiring such payments, for his out-of-pocket costs of reasonable and necessary chiropractic treatment. We reverse the order of 104 chiropractic treatments per year. We otherwise affirm the decision.
We award the employee an attorney's fee under the provisions of G.L.c. 152, § 13A(6) in the amount of $1,148.01.
So ordered.
_____________________________ Susan Maze-Rothstein Administrative Law Judge
______________________________ William A. McCarthy Administrative Law Judge
Filed: July 25, 1997
The statutory scheme of G.L.c. 152, § 8 does not provide for the imposition of a double penalty, i.e. under both § 8 (1) and additionally under § 8 (5). Section 8 (1) penalties may be imposed for nonpayment of health care services only where an order instructs the insurer to directly reimburse the employee for medical bills paid by him. The conference orders in this case did not do so. The judge's factual finding regarding the reasonableness and necessity of future chiropractic treatment was based upon competent evidence in the record and was authorized by the workers' compensation act. I would affirm the decision.
Section 8 (1)
Unlike the requirement in § 8 (2) that an insurer continue paying weekly wage replacement benefits until permitted to stop, the worker's compensation act does not prohibit an insurer's unilateral termination of ongoing medical payments. Nevertheless, a cessation of payment for ongoing medical care should be based on reasonable grounds. See G.L.c. 152, § 14 (1). Otherwise, an insurer may provoke a complaint of unfair claims handling techniques, see 452 CMR 7.04, which may jeopardize its insurance license.
The workers' compensation act provides a balance between an employee's need for uninterrupted treatment and an insurer's obligation to prevent overutilization of procedures or other inappropriate treatment. See G.L.c. 152, § 13. When a dispute arises regarding continuing care, an insurer may unilaterally terminate medical payments without becoming liable for a penalty. As DeFilippo did here, an employee may then pursue §§ 13 and 30 utilization review and dispute resolution procedures. See 452 CMR 1.07 (2)(c) [documentation required for claim for health care services].
A conference order cannot reach beyond its own terms, and can only establish that which it specifically awards. See Lape v. Town Lyne House, 10 Mass. Workers' Comp. Rep. 805, 807 (1996). A standard form generic third party provider order for reasonable and necessary health care services does not specifically award any bill but merely recognizes an employee's general right to medical care. It cannot support the imposition of a penalty. SeeGraham and Diaz, supra. There is no evidence in this record that chiropractic bills were presented for payment in 1992. One would infer from the specific order to pay other medical bills, and the absence of any mention of chiropractic bills, that the issue of chiropractic payment was not raised or adjudicated at the 1992 conference. Nor is there any evidence in the record that, at the time of the 1992 conference, the employee was paying for chiropractic treatment himself. Thus the prerequisites for a penalty based on the 1992 conference order do not exist. See Id.
The 1995 conference order provided for payment of the chiropractic treatment, but did not order the insurer to directly reimburse the employee for payments he had made. Instead, the judge, apparently not confident enough to order payment which would not be recoupable from a financially strapped employee, allowed the establishment of an escrow account. He wrote:
I used the term escrow as a vehicle to make a determination in favor of the employee, as I thought was warranted at the time, without placing the Commonwealth in the position of having to pay a large sum of money that would not likely be recouped, had they prevailed at the hearing . . . I made what proved to be the right decision, ordering payment of the chiropractic bills, without leaving the Commonwealth without a realistic recourse if they had prevailed at the hearing. (Dec. 31-32.)
The Commissioner of Public Employee Retirement, upon receipt of a voucher with the 1995 order, could not tell from the terms of the order that the chiropractic bills had to be paid within 14 days, the shorter time period provided by § 8 (1) ordinarily reserved only for weekly wage replacement payments. See G.L.c. 152, § 69B. Nor would the Commissioner or State Treasurer know, from the language of the order, to issue a check directly to the employee as opposed to the third party provider or an escrow agent. See G.L.c. 152, § 70. The employee never complied with the requirements of 452 CMR 1.07 (2)(b) [documentation required for a claim for penalties] or 452 CMR 1.23 [amendments to claims] when he requested a penalty at the 1994 conference. It is clear from the record that the employee had not paid all the outstanding chiropractic bills. Yet there is no competent evidence in the de novo hearing record as to the amount of reimbursement, as opposed to third party provider payment, sought or ordered.
The law does not even require submission of the order to the Commissioner within the 14 day period. See G.L.c. 152, § 86.
452 Code Mass. Regs. § 1.07 (2)(b) provides, in pertinent part:
Claims for penalties under M.G.L.c. 152, § 8 (1) shall be accompanied by a copy of the order . . . with which it is alleged the insurer has failed to comply, together with an affidavit signed by the claimant or the claimant's attorney attesting to the date payment was due, the date, if any, on which payment was made, and the amount of penalty the claimant is owed. (emphasis supplied).
The board file does not contain such a claim document. One would have to go to unsworn conference documents, not offered or admitted at the hearing de novo, to determine which chiropractic bills were unpaid and due the third party provider and which had been paid by the employee for which he was seeking reimbursement.
I do not condone the self-insurer's egregious failure to comply with the 1995 conference order to pay specific chiropractic bills. However, I agree with the administrative judge that under these peculiar unique circumstances, the sole remedy for that misconduct resides in the next penalty provision, § 8 (5).
Section 8 (5)
I disagree that a § 8 (5) penalty may be cumulatively imposed on top of a § 8 (1) penalty. Section 8 (5) begins "Except as specifically provided above." Where nonpayment results in a penalty being imposed "above", i.e. under § 8 (1), § 8 (5) by its terms becomes inapplicable. It is clear from both the plain language of this subsection and its separate historical development, that the penalties are not cumulative.
Prospective Award of Medical Benefits
The workers' compensation act provides for a prospective award of adequate, reasonable and necessary medical services. See e.g. G.L.c. 152, § 10A(2). It also requires insurers to continuously monitor the adequacy and reasonableness of ongoing health care services to insure that employees receive necessary and effective treatment. G.L.c. 152, §§ 13 and 30; 452 CMR 6.07 (Utilization Review and Quality Assessment).
Section 10A(2) provides in pertinent part: "Nothing in this section shall restrict the authority of an administrative judge to order weekly benefits or health care services for a closed period into the future or to order that such benefits or services be initiated, modified, or terminated at a particular date in the future."
Orders for future medical benefits are subject to revision as circumstances change. Increased medical care in the future is not precluded by an order limiting ongoing health care services to the current approved plan. "As with future incapacity for an industrial injury, future medical benefits always remain open."Fragale v. MCF Industries, 9 Mass. Workers' Comp. Rep. 168, 173 (1995).
Here, the record contains evidence to support the judge's prospective order of limited ongoing chiropractic services. The impartial medical examiner opined that the care the employee was currently receiving was reasonable and necessary. (Dep. 28.) The employee was seeing his chiropractor twice a week: 104 times a year. (Employee Ex. 2.) The judge's order in effect approved the current treatment plan. There is no evidence in the record which would support a greater award.
Conclusion
Because the judge's decision is consistent with the applicable law and properly grounded in the record evidence, it should be affirmed. See Scheffler's Case, 419 Mass. 251, 258 (1994); G.L.c. 152, c. 11C.
____________________________ Suzanne E.K. Smith Administrative Law Judge