Opinion
W.C. No. 4-458-126
January 15, 2003
FINAL ORDER
The claimant seeks review of an order of Administrative Law Judge Friend (ALJ) which denied a penalty for the respondent-insurer's failure timely to pay medical benefits. We affirm.
The claimant suffered an admitted injury that required fusion surgery on November 20, 2000 at St. Anthony Central hospital. A physician for Anesthesia Consultants P.C. (Consultants) was involved in the surgery at a cost of $2,460.
Between June and October 2001, the claimant's counsel made several requests for the respondent-insurer to pay the Consultants' bill. In a letter dated October 3, 2001, the respondent-insurer's attorney notified the claimant's attorney that an admission of liability would be filed. The letter also stated that the:
"surgery performed by Dr. Prall at St. Anthony-Central will be authorized, including the pre-operative and immediate post-operative care and hospitalization, diagnostic work and imaging related to the T2 transpedicular vertebrectomy and interbody cage fusion/posterior hook and rod instrumentation/posterior iliac crest autograft."
However, the letter added:
"Initially, due to the fact the bills you have provided are not itemized as required for payment, the medical bills will be denied and itemized bills requested by the medical providers and then those bills will be processed ad [sic] all bills for services as described above will be paid pursuant to the fee schedule."
On October 15, 2001, the respondent-insurer filed a General Admission of Liability for the payment of additional temporary disability benefits. The claimant subsequently applied for a hearing and requested penalties under § 8-43-304(1), C.R.S. 2002 for the respondent-insurer's alleged failure timely to pay the Consultants' bill. The Consultants' bill was paid on November 28, 2001.
The matter was heard by the ALJ at a hearing on June 13, 2002. At the conclusion of the claimant's case in chief, the ALJ granted the respondent-insurer's motion for a directed verdict to dismiss the claim for penalties. In support, the ALJ determined the claimant presented no evidence that the Consultants complied with the Rules of Procedure, Part XVI, 7 Code Colo. Reg. 1101-3 by giving "proper coding or itemization required, or establishing on what date Respondents were liable for payment of that medical bill." (Finding of Fact 8).
On review the claimant contends the ALJ erroneously granted a directed verdict dismissing the penalty claim. We disagree.
Because the request for penalties was heard by an ALJ and not a jury, the claimant mistakenly relies on C.R.C.P. 50 as governing this claim. Rather, where the case is tried without a jury, C.R.C.P. 41(b)(1) is controlling. Nova v. Industrial Claim Appeals Office, 754 P.2d 800 (Colo.App. 1988) (C.R.C.P. apply insofar as not inconsistent with the procedural or statutory provisions of the Workers' Compensation Act). C.R.C.P. 41(b)(1), provides that after a plaintiff has completed the presentation of his evidence, the defendant may move for a dismissal on the grounds that the plaintiff has failed to present a prima facie case for relief.
In determining whether to grant a motion to dismiss or directed verdict, the court is not required to view the evidence in the light most favorable to the plaintiff. Rowe v. Bowers, 160 Colo. 379, 417 P.2d 503 (1966); Blea v. Deluxe/Current, Inc., W.C. Nos. 3-940-062 (June 18, 1997) (applying these principles to workers' compensation proceedings). Neither is the court required to "indulge in every reasonable inference that can be legitimately drawn from the evidence" in favor of the claimant. Rather, the test is whether judgment for the respondent is justified on the claimant's evidence. American National Bank v. First National Bank, 28 Colo. App. 486, 476 P.2d 304 (1970); Bruce v. Moffat County Youth Care Center, W.C. No. 4-311-203 (March 23, 1998).
Here, the claimant requested the imposition of penalties under § 8-43-304(1), C.R.S. 2002, which allows an ALJ to impose penalties of up to $500 per day for an insurer's violation of the Workers' Compensation Act (Act). See Holliday v. Bestop Inc., 23 P.3d 700 (Colo. 2001); Diversified Veterans Corporate Center v. Hewuse, 942 P.2d 1312 (Colo.App. 1997); Pueblo School District No. 70 v. Toth, 924 P.2d 1094 (Colo.App. 1996). The imposition of penalties under § 8-43-304(1) requires a two-step analysis. The ALJ must first determine whether the disputed conduct constituted a violation of the Act. Allison v. Industrial Claim Appeals Office, 916 P.2d 623 (Colo.App. 1995). If the ALJ finds a violation, penalties may not be imposed unless the actions which resulted in the violation were objectively unreasonable. Colorado Compensation Insurance Authority v. Industrial Claim Appeals Office, 907 P.2d 676 (Colo.App. 1995). In this regard, an insurer's actions are not objectively unreasonable if they are predicated on a rational argument based in law or fact. Diversified Veterans Corporate Center v. Hewuse, supra.
At the commencement of the hearing before the ALJ, the claimant's attorney stated that the claimant sought penalties for the respondent-insurer's violation of § 8-43-401(2), C.R.S. 2002, by failing to pay the Consultants' bill between October 15 and November 27, 2001. (Tr. pp. 8, 21, 22). Insofar as pertinent, § 8-43-401(2)(a), provides that "[A]fter all appeals have been exhausted or in cases where there have been no appeals, all insurers and self-insured employers shall pay benefits within thirty days of when any benefits are due."
Section 8-43-203(2)(d), C.R.S. 2002, requires insurers to pay benefits in accordance with admitted liability. However, a general admission of liability for medical benefits does not preclude the insurer from denying liability for particular treatment based on an argument that the treatment is not reasonable or related to the industrial injury. Snyder v. Industrial Claim Appeals Office, 942 P.2d 1337 (Colo.App. 1997). Accordingly, an insurer cannot be penalized for exercising its right to contest the reasonableness of medical treatment and requiring the claimant to establish the reasonableness of such treatment. Moreover, the insurer's liability is governed by the medical fee schedule and procedural rules promulgated by the Director of the Division of Workers' Compensation for expenses billed under the medical fee schedule. See § 8-42-101(3)(a)(I), C.R.S. 2002.
Here, it is undisputed the respondent-insurer filed a general admission of liability on October 15, 2001 for the payment of additional temporary disability benefits. However, the admission did not admit liability for any particular medical benefits. In fact, the respondent-insurer expressly qualified the October 15 admission in the October 3 letter which notified the claimant that the respondent-insurer refused to pay previously submitted medical bills until it received itemized statements from the providers.
Rule XVI(G)(2) requires all health care providers to use billing forms HCFA 1500 or UB-92 to bill medical expenses for treatment of industrial injuries. Further Rule XVI(G)(3) requires that "all billed services shall be itemized on the appropriate billing form as set forth in" Rule XVI(G)(2) and "shall include applicable billing codes and modifiers from the fee schedule."
The claimant was the only witness to testify at the hearing. We have reviewed the hearing transcript and the documentary record. Neither the claimant's testimony nor the claimant's exhibits contain any evidence the Consultants submitted a bill on form HCVA 1500 or UB-92. Neither did the claimant present evidence that the bill was itemized or that it could not be itemized as required by Rule XVI(G)(3).
It follows that even if the claimant established prima facie evidence that the respondent-insurer violated the Act, and the burden of proof shifted to the respondent-insurer to establish that its actions were objectively reasonable, the claimant's evidence supports the conclusion the respondent-insurer's failure to pay the disputed medical bill was based on a rational argument that no payment was due until the provider submitted a bill which conformed to the requirements of Rule XVI(G)(2). Under these circumstances, the ALJ did not err in finding the claimant's evidence was legally insufficient to support the imposition of penalties. See Diversified Veterans Corporate Center v. Hewuse, supra. Therefore, the ALJ did not err in granting a directed verdict in favor of the respondent-insurer.
Contrary to the claimant's further argument Claimant's Exhibit 31 does not contain evidence the Consultants complied with Rule XVI(G)(2). Exhibit 31 was not admitted to the record. (Tr. p. 30). In any case, Exhibit 31 merely verifies that the Consultants' bill was paid on November 28, 2001. Similarly, Claimant's Exhibit 14 was not admitted and is simply a copy of the October 3 letter where the respondent-insurer demanded itemization of the Consultants' fees. Therefore, we reject the claimant's contention that this evidence establishes the respondent-insurer's liability for penalties.
The claimant also contends there is no evidence the respondent-insurer's payment of the Consultants' bill was based on any itemization or coding statement beyond the information it had as of October 15, 2001. Therefore, the claimant argues the respondent-insurer failed to prove the delayed payment was predicated on the provider's failure to comply with Rule XVI(G). Contrary to the claimant's contention, the November 28, 2001 letter from the respondent-insurer's attorney to the claimant's attorney indicates that the Consultants' bill was "returned to the vendor for further information necessary to allow processing of the bill and payment," which was not received until November 27, 2001. (Claimant Exhibit 28).
The claimant further contends the ALJ erroneously failed to admit Claimant's Exhibit 4. In view of our disposition, the ALJ's exclusion of Claimant's Exhibit 4, is at most harmless error. See § 8-43-410 C.R.S. 2002; A R Concrete Construction v. Lightner, 759 P.2d 831 (Colo.App. 1988). (error which is not prejudicial will be disregarded). Exhibit 4 is a June 15, 2001, letter in which the claimant's attorney requested that the respondent-insurer pay the Consultants' bill. The respondent-insurer objected to the admission of Exhibit 4 on grounds it was not relevant. (Tr. p. 24). It is implicit that the ALJ agreed with the respondent-insurer. (Tr. p. 30).
At hearing the claimant expressly conceded that the respondent-insurer was not required to pay the bill prior to October 15, 2001. Therefore, the June 15 request for payment does not compel a finding that the respondent-insurer's failure to pay the bill between October 15 and November 27 was objectively unreasonable. Furthermore, because the ALJ found no punishable violation, the claimant's contention that Exhibit 4 is relevant to the amount of penalty to be imposed is moot.
IT IS THEREFORE ORDERED that the ALJ's order dated June 24, 2002, is affirmed.
INDUSTRIAL CLAIM APPEALS PANEL
____________________________________
Kathy E. Dean
____________________________________
Robert M. Socolofsky
NOTICE
This Order is final unless an action to modify or vacate this Order is commenced in the Colorado Court of Appeals, 2 East 14th Avenue, Denver, CO 80203, by filing a petition for review with the Court, within twenty (20) days after the date this Order is mailed, pursuant to § 8-43-301(10) and § 8-43-307, C.R.S. 2002. The appealing party must serve a copy of the petition upon all other parties, including the Industrial Claim Appeals Office, which may be served by mail at 1515 Arapahoe, Tower 3, Suite 350, Denver, CO 80202.
Copies of this decision were mailed ________January 15, 2003 __________to the following parties:
Laurette Patrick, 1409 Allison St., #54, Lakewood, CO 80214
Berkey Properties, Inc. d/b/a Samurai Sam's Teriyaki Grill, 12482 W. Ken Caryl Ave., Unit A-3, Littleton, CO 80127
Legal Department, Pinnacol Assurance — Interagency Mail
Jack Kintzele, Esq., 1317 Delaware St., Denver, CO 80204 (For Claimant)
Craig H. Russell, Esq., 999 18th St., #3100, Denver, CO 80202 (For Respondents)
BY: __________A. Hurtado__________