Opinion
W.C. No. 3-860-458.
May 25, 2004.
ORDER OF REMAND
The claimant seeks review of an order of Administrative Law Judge Stuber (ALJ) which denied her request to impose penalties on the respondent-insurer. The claimant contends the ALJ erred in finding that she did not prove a violation of Rule of Procedure XVI(K)(1)(b), 7 Code Colo. Reg. 1102-3 at 81, which requires that "all bills" for medical treatment are due and payable within thirty days after receipt of the bill by the payer. We set the order aside and remand for entry of a new order.
The claimant sustained a compensable injury in 1987. On October 16, 2002, the claimant received authorized medical treatment from Dr. Wenham. On an unknown date Dr. Wenham's office prepared a "statement" reflecting that $120 was owed for the October 16 treatment.
On March 25, 2003, the claimant's attorney forwarded Dr. Wenham's "statement" to respondents' counsel, who in turn forwarded it to the insurer where it was received on approximately April 22, 2003. The insurer did not pay Dr. Wenham, and the claimant's counsel sent a second letter requesting payment in May 2003. Still, the physician was not paid.
The regular claims adjuster was out of the office from April 2003 to July 14, 2003. When the adjuster returned to work she noted the computer file showed that Dr. Wenham had not been paid, although an employee had sent the "statement" back to Dr. Wenham requesting that it be resubmitted on form HCFA 1500 (hereinafter HCFA). The adjuster then telephoned Dr. Wenham's office requesting that the form be submitted on an HCFA containing proper procedure codes and the physician's taxpayer identification number. The HCFA was submitted to the insurer on July 25, 2003, and the insurer paid for the services on August 4, 2003.
The claimant requested the imposition of penalties under former § 8-53-116, C.R.S. 2003 ($100 per day penalty) for violation of Rule XVI(K)(1)(b) based on the insurer's failure to pay Dr. Wenham's bill within 30 days of receipt. The respondent defended on the grounds that the document submitted for payment on March 25, 2003 was a mere "statement," not a "bill" within the meaning of rule. Thus, the respondent argued it could not have violated Rule XVI(K)(1)(b).
The ALJ concluded that Rule XVI(G)(2)(a)(1), 7 Code Colo. Reg. 1101-3 at p. 75, required Dr. Wenham to use an HCFA (including procedure codes and taxpayer identification) when submitting his request for payment, but failed to do so until July 25, 2003. The ALJ further recognized that Rule XVI(G)(4)(a), 7 Code Colo. Reg. 1101-3 at 76-77, and Rule of Procedure XVI(K)(2), 7 Code Colo. Reg. 1101-3 at 82, "apparently required the insurer to provide a written notice within 30 days if the bill was not on the require [sic] form." However, the ALJ concluded the claimant did not allege a violation of Rule XVI(G)(4)(a) or XVI(K)(2), and that no penalty could be imposed for violation of these rules. Further, the ALJ found the preponderance of the evidence does not demonstrate the insurer violated Rule XVI(K)(1)(b) because Dr. Wenham did not submit an HCFA until July 25.
On review, the claimant contends the ALJ erred in concluding that he did not sufficiently raise and prove a violation of Rule XVI(K)(1)(b). The claimant argues that Rule XVI(K)(2)and Rule XVI(G)(4)(a) are not independent of Rule XVI(K)(1)(b). Instead, the claimant argues these rules are intertwined because XVI(K)(1)(b) provides the "procedure for payment" of a "bill" and Rule XVI(K)(2) establishes the procedure for contesting payment of a bill. The respondents reply the evidence supports the ALJ's determination that the claimant never submitted a "bill" within the meaning of Rule XVI(K)(1)(b), but instead submitted a "statement" which did not trigger Rule XVI(K)(1)(b). The respondents also contend the claimant never raised the issue of penalties for improper notice of contest. We set the order aside and remand for entry of a new order.
This request for penalties is governed by former § 8-53-116, C.R.S. (1986 Cum. Supp.), which requires the imposition of penalties of up to $100 per day, payable to the Subsequent Injury Fund, for failure to perform any duty lawfully enjoined by the Director of the Division of Workers' Compensation (Director) or violation of any "lawful order" of the Director. This statute is the predecessor to the statute currently codified at § 8-43-304(1), C.R.S. 2003, and it is not now disputed that a violation of Rule XVI(K)(1)(b) is subject to a penalty under § 8-53-116. See Pueblo School District No. 70 v. Toth, 924 P.2d 1094 (Colo.App. 1996); Colorado Compensation Insurance Authority v. Industrial Claim Appeals Office, 907 P.2d 676 (Colo.App. 1995).
Under this statute, the claimant must prove a violation of a rule, and that the violation was not reasonable under an objective standard. Where a violation is shown, the reasonableness determination depends on whether the insurer's action or inaction was predicated on a rational argument based in law or fact. See Jiminez v. Industrial Claim Appeals Office, ___ P.3d ___ (Colo.App. No. 02CA2283, September 11, 2003); Diversified Veterans Corporate Center v. Hewuse, 942 P.2d 1312 (Colo.App. 1997). Of course, if the insurer offers no explanation for its conduct, the claimant has made a prima facie showing because the ALJ may infer that there was no reasonable explanation for the insurer's action. See Human Resource Co. v. Industrial Claim Appeals Office, 984 P.2d 1194 (Colo.App. 1999); Davis v. K Mart, W.C. No. 4-493-641 (April 28, 2004); Thomson v. Pioneers Hospital of Rio Blanco County, W.C. No. 4-536-930 (April 14, 2004). Similarly, where an explanation is offered the reasonableness of the insurer's conduct presents a question of fact for the ALJ. Jiminez v. Industrial Claim Appeals Office, supra.
Because these issues a re factual in nature, we must uphold the ALJ's determinations if supported by substantial evidence in the record. Section 8-43-301(8), C.R.S. 2003. This standard of review requires us to view the evidence in the light most favorable to the prevailing party, and defer to the ALJ's resolution of facts in the evidence, credibility determinations, and plausible inferences drawn therefrom. Wilson v. Industrial Claim Appeals Office, 81 P.3d 1117 (Colo.App. 2003). However, we retain the authority to review the correctness of the ALJ's legal conclusions. Schrieber v. Brown Root, Inc., 888 P.2d 274 (Colo.App. 1993).
We first consider the ALJ's order insofar as it may be interpreted as holding that the claimant did not present a prima facie case for violation of Rule XVI(K)(1)(b). The correct interpretation of a rule of procedure is an issue of law subject to the same rules of construction applicable to statutes. See Gerrity Oil and Gas Corp. v. Magness, 923 P.2d 261 (Colo.App. 1995), aff'd. in part., rev'd. in part, 946 P.2d 913 (Colo. 1997). Hence, words and phrases in a rule should be given their plain and ordinary meanings. If a term is undefined by the applicable rule or not subject to some special meaning established through practice or usage, consideration of the dictionary definition is appropriate. Midboe v. Industrial Claim Appeals Office, ___ P.3d ___ (Colo.App. No. 03CA0159, September 25, 2003); White v. Industrial Claim Appeals Office, 8 P.3d 621 (Colo.App. 2000). When two or more rules address the same subject matter, they should be construed together to effectuate a consistent, harmonious and sensible construction of the rules. See Spracklin v. Industrial Claim Appeals Office, 66 P.3d 176 (Colo.App. 2002); Henderson v. RSI, Inc., 824 P.2d 91 (Colo.App. 1991).
Insofar as pertinent, Rule XVI(K)(1)(b) provides as follows:
Unless contested in accordance with the provisions set forth in this section K.2. and 3., all bills submitted by a provider are due and payable in accordance with the Medical Fee Schedule within thirty (30) days after receipt of the bill by the payer. (Emphasis added).
Rule XVI(K)(2) sets forth the requirements for contesting payment of billed services based on "non-medical issues." The rule requires, among other things, that a payer contesting payment of a bill must within thirty days of receipt submit to the "billing party" a "written notification of contest" containing detailed information regarding the reasons for contesting the bill and the billing party's right to resubmit the bill.
The ALJ concluded that the "statement" submitted by the claimant's attorney on March 25, 2003, was not a "bill" within the meaning of the rule because it was not submitted on an HCFA as required by Rule XVI(G)(2)(a)(1), concerning use of "billing forms." However, we conclude the ALJ's interpretation of the term "bill" is too narrow. First, we note that although the rules define "billed services" and "billing party," the definitions do not contain a specific definition for the term "bill." Rule XVI(B), 7 Code Colo. Reg. 1101-3 at 70. More importantly, Rule XVI(G)(4)(a), 7 Code Colo. Reg. 1101-3 at 76-77, provides as follows:
Payment for any services not billed on the forms identified and/or not itemized as instructed in this Rule XVI.G.2 and 3, may be contested until the provider complies. However, when payment is contested, the payer shall comply with the applicable provisions of Rule XVI.K. "Payment of Medical Benefits." (Emphasis added).
Thus, the language of Rule XVI(G)(4)(a) unambiguously contemplates that some documents constitute medical "bills" even though they are not submitted on the HCFA form mandated by Rule XVI(G)(2)(a)(1). Moreover, Rule XVI(G)(4)(a) grants an insurer discretion to "contest" a "bill" which is not submitted on an HCFA, but only if the insurer complies with "applicable" provisions of Rule XVI(K). There can be little doubt that the applicable provisions of Rule XVI(K) are (K)(1)(b) requiring uncontested "bills" to be paid within thirty days, and (K)(2) which establishes procedures to "contest" a disputed bill based on "non-medical issues." It follows that reading the rules together in a consistent and harmonious fashion when Rule XVI(K)(1)(b) refers to "bills submitted" the rule is not referring only to those "bills" which comply with the formatting requirements of Rule XVI(G)(2)(a)(1).
Instead, as used in Rule XVI(K)(1)(b) the term "bill" must connote the ordinary dictionary definition of an "itemized list of fees or charges." Webster's II New College Dictionary (1995). The insurer's argument and the ALJ's conclusion notwithstanding, there is no meaningful distinction between a "statement" and a "bill" for purposes of Rule XVI(K)(1)(b). First, Rule XVI does not contain any definition of the term "statement" so that it might be differentiated from a "bill." Moreover, the pertinent dictionary definition of the term "statement" is an "abstract of a commercial or financial account due: BILL." Webster's II New College Dictionary (1995).
Thus, we hold the ALJ erred as a matter of law in construing Rule XVI(K)(1)(b) as inapplicable until an HCFA was submitted. (Conclusion of Law 4). Rather, Rule XVI(K)(1)(b) contemplates payment within thirty days of any itemized list of fees and charges for medical services rendered unless the insurer contests payment in accordance with Rule XVI(G)(4)(a) and/or Rule XVI(K)(2).
However, this ruling does not demonstrate that penalties must be imposed as a matter of law. On remand, the ALJ shall determine whether the documents submitted to the insurer with the letter of March 25, 2003, constitute a "bill" for services as we have defined that term. If so, the ALJ shall determine whether the insurer violated Rule XVI(K)(1)(b) by failing to either pay the "bill" within thirty days of receipt or properly "contesting" it in a timely fashion. If the insurer did not pay the bill or contest it as required by Rule XVI(K)(1)(b), the ALJ shall determine whether the insurer offered a rational explanation in law or fact for its conduct.
It follows from this discussion that we reject the insurer's argument and the ALJ's conclusion that the claimant did not sufficiently plead or raise a violation of Rule XVI(K)(1)(b). We agree with the respondents that they were entitled to reasonable notice of both the legal and factual issues to adjudicated so that they could present evidence and argument in support of their position and properly dispute the claimant's evidence and argument. Hendricks v. Industrial Claim Appeals Office, 809 P.2d 1076 (Colo.App. 1990). However, at the commencement of the hearing the claimant made it clear the claimant was seeking a penalty for failure to pay the medical bill within thirty days of receipt. The insurer expressed no surprise at this contention, and took the position that the claimant did not submit a "bill" as required by the rules, but instead submitted a "statement" which the insurer properly returned to Dr. Wenham. (Tr. Pp. 4-11). During the hearing the respondents presented the testimony of the regular adjuster and submitted various documents which were pertinent to the issues before the ALJ. Thus, it appears the respondents were fully aware of the legal and factual bases of the claim, and took the same position before the ALJ that they take on appeal. Under these circumstances, we perceive no violation of due process or standards of pleading which were not either expressly or impliedly waived by the respondents' conduct. Cf. Pueblo School District No. 70 v. Toth, supra, Robbolino v. Fischer-White Contractors, 738 P.2d 70 (Colo.App. 1987); Davis v. K Mart, supra.
We particularly note that the claimant raised the issue of a violation of Rule XVI(K)(1)(b) by presenting a prima facie case that the claimant submitted a "bill" which was not paid within thirty days of receipt by the insurer. The respondents then had the burden to come forward with evidence that the bill had been paid or that it was properly contested under Rule XVI(K)(1)(b). See Rockwell International v. Turnbull, 802 P.2d 1182 (Colo.App. 1990) (where claimant presents a prima facie case of compensability, burden of going forward shifts to employer to show claim lacks merit).
IT IS THEREFORE ORDERED that the ALJ's order dated November 7, 2003, is set aside, and the matter is remanded for entry of a new order consistent with the views expressed herein. This order does not authorize another hearing, and the order shall be entered based on the existing record.
INDUSTRIAL CLAIM APPEALS PANEL
David Cain
Kathy E. Dean
Barbara Sue Copeland, Colorado Springs, CO, Vrooman Constructors, Inc., c/o Marsha A. Kitch, Esq., Evergreen, CO, Shirl Ammerman, Zurich Insurance Company, Kansas City, MO, Kat Pennucci, Subsequent Injury Fund, of Workers' Compensation — Interagency Mail, Steven U. Mullens, Esq., Colorado Springs, CO, (For Claimant).
Marsha A. Kitch, Esq., Evergreen, CO, (For Respondents).