Opinion
W.C. No. 4-694-053.
November 23, 2009.
FINAL ORDER
The claimant seeks review of an order of Administrative Law Judge Krumreich (ALJ) dated June 19, 2009 that denied her claim for penalties. We affirm.
The ALJ conducted an evidentiary hearing pursuant to our order remanding this matter for consideration of whether the respondents' conduct violated an earlier version of an administrative rule that is part of the regulations pertaining to the medical fee schedule. The claimant had sought penalties under § 8-43-304(1), C.R.S. for the employer's alleged violation of W.C. Rule of Procedure 18-6(A), 7 Code Colo. Reg. 1101-3 (2006 and 2007). At the time of the alleged violations the rule read as follows:
(A) Conferences Held at the Request of a Party
Telephonic or face-to-face conferences shall be related to the injured worker's treatment. All parties shall receive actual notification from the requesting party in advance and within 24 hours of scheduling.
(emphasis added). The ALJ initially granted summary judgment for the employer based, in part, on his reliance on an opinion of the Director of the Division of Workers' Compensation. The Director indicated that Rule 18-6(A) was intended to set fees for reimbursing physicians for conferences and did not set out standards for when a conference was required or prohibit outright any contact between an employer and the treating physician without the claimant present. However, we concluded that the ALJ erred in granting summary judgment under the circumstances. We remanded the matter to the ALJ for further consideration, including whether the respondents' conduct was objectively unreasonable.
On remand the ALJ considered whether the respondents violated either Rule 18-6(A) or § 8-47-203. The factual bases for the claimant's action appear to be undisputed. The claimant alleged that she sustained a compensable injury on June 28, 2006, but another ALJ subsequently denied her claim in an order dated June 20, 2008. Prior to the claim's dismissal a claims adjuster and the employer's director of human resources met with the claimant's treating physician on October 11, 2006. The claimant did not receive notice of the meeting, referred to by the ALJ as a "staffing," and did not attend. The physician explained the status of the claim, the type of treatment being administered, and the treatment plan. The adjuster did not ask the doctor questions. On January 8, 2007 the human resources director met again with the doctor and his assistant. The employer initiated the meeting and, again, the claimant was not notified of the meeting in advance and did not attend. The object of the meeting was for the employer to become current with the doctor's treatment and plan of treatment. The human resources director took notes about the claimant's medical condition and noted that the claimant would probably get a rating.
The ALJ heard from three workers' compensation practitioners and considered written opinions of the Director. The attorneys offered various opinions as to the general application of Rule 18-6(A) and § 8-47-203(1), as well as to its application to the particular circumstances of this case. A physician also provided testimony about ex parte communications. The ALJ determined that the employer did not violate either provision. The ALJ also determined that the employer's conduct was objectively reasonable under the circumstances and denied the claimant's request for penalties.
The claimant raises four arguments in support of her contention that the ALJ erred by not imposing penalties against the respondents. The claimant asserts that the record does not support the ALJ's finding that one of the claimant's expert witnesses, Mr. Babcock, opined that the employer "had an objectively reasonable basis to conduct staffing meetings with the [authorized treating physician] without notice to or attendance by Claimant in light of the Director's February 5, 2008 letter because such staffing meetings were not `conferences' as referenced in WCRP 18-6(A)." Findings of Fact, Conclusions of Law, and Order (Order) at 4, ¶ 14. However, Mr. Babcock, who was accepted as an expert in workers' compensation practice in Colorado, testified as follows: "From what I know about the case, I don't think there is a violation of 18-6." Tr. (5/14/ 09) at 54. He also discussed a letter from the Director in the context of what the rule meant by the term "conference." Tr. (5/14/ 09) at 46-48. Mr. Babcock acknowledged that the Director, in his written response to an inquiry about the application of Rule 18-6(A), indicated that the need to contact parties in advance did not apply unless all parties were getting together. Tr. (5/14/ 09) at 49; Exhibit M. The ALJ's corresponding findings are reasonable inferences from the record and are binding on review. Section 8-43-301(8), C.R.S. 2009; Harrison Western Corp. v. Claimants in re Death of Hicks, 185 Colo. 142, 522 P.2d 722 (1974); Cary v. Chevron U.S.A., Inc., 867 P.2d 117 (Colo. App. 1993).
The claimant also asserts that the limited waiver provision of the physician-patient privilege found in § 8-47-203(1) is unconstitutionally vague. We lack authority to resolve this constitutional challenge. Section 8-43-301(8), C.R.S. 2009; Celebrity Custom Builders v. Industrial Claim Appeals Office, 916 P.2d 539 (Colo. App. 1995).
The claimant's remaining arguments assert that the employer is not allowed to have any ex parte contact with the claimant's treating physician without an order and that the respondents violated Rule 18-6(A) by meeting with the claimant's treating physician without notifying the claimant in advance of the meeting. However, we do not find it necessary to address the claimant's remaining arguments under the circumstances.
The claimant sought penalties under § 8-43-304(1), C.R.S. 2009, which provides that any employer or insurer who fails or neglects to obey any lawful order shall be punished by a fine of not more than $500 per day for each such offense. Giddings v. Industrial Claim Appeals Office, 39 P.3d 1211 (Colo. App. 2001). The term "order" as used in this penalty provision includes a "rule." See § 8-40-201(15), C.R.S. 2009; Holliday v. Bestop, Inc., 23 P.3d 700 (Colo. 2001); Spracklin v. Industrial Claim Appeals Office, 66 P.3d 176 (Colo. App. 2002); Pioneers Hospital of Rio Blanco County v. Industrial Claim Appeals 114 P.3d 97 (Colo. App. 2005). Section 8-40-201(15) defines an "order" as "any decision, finding and award, direction, rule, regulation, or other determination arrived at by the director or an administrative law judge.
It is generally not necessary for the party seeking penalties to prove that the violator knew or reasonably should have known they were in violation. All that is necessary is that the party seeking penalties prove the putative violator acted unreasonably under an objective standard. See Jiminez v. Industrial Claim Appeals Office, supra; Pueblo School District No. 70 v. Toth, 924 P.2d 1094 (Colo. App. 1996). In order to impose a penalty under § 8-43-304(1), it must be found that there was a violation of an order, and that the violation was not objectively reasonable. See Colorado Compensation Insurance Authority v. Industrial Claim Appeals Office, 907 P.2d 676 (Colo. App. 1995). Thus, the ALJ must determine whether the respondents offered a reasonable factual or legal explanation for their actions. Human Resource Co. v. Industrial Claim Appeals Office, 984 P.2d 1194 (Colo. App. 1999). Determination of these issues is for the ALJ as fact finder, and we may not interfere if the order is supported by substantial evidence in the record. Section 8-43-301(8), C.R.S. 2007; Pueblo School District No. 70 v. Toth, supra.
The reasonableness of the respondents' actions depends on whether the actions were predicated on a rational argument based on law or fact. Diversified Veterans Corporate Center v. Hewuse, 942 P.2d 1312 (Colo. App. 1997). In this regard, the issue is not whether the respondents had a reasonable explanation for their actions. Instead, the issue is whether the respondents' failure to comply with the rule was predicated on a rational argument in law or fact that they were not required to comply with the rule. See Porras v. World Service Co., Inc., W.C. No. 155-161 (October 12, 1995).
As noted by the ALJ, generally, the imposition of penalties under § 8-43-304(1) requires a two-step analysis. First, it must be determined whether a party has violated the Act in some manner, or failed to carry out a lawfully enjoined action, or violated an order. If a violation is found, it must be determined whether the violator acted reasonably. See Bettinger v. The Great Indoors, W.C. No. 4-513-392 (May 11, 2009).
In this case the ALJ not only found that the respondents did not violate Rule 18-6(A) or § 8-47-203(1), but that their conduct was objectively reasonable. In her arguments the claimant does not address the reasonableness of the respondents' conduct. In any event, we agree with the ALJ that even if there were violations of the rule and the statute, penalties under § 8-43-304(1) are unavailable in light of the reasonableness of the respondents' conduct.
The reasonableness of the challenged conduct is usually a question of fact for determination by the ALJ. Human Resource Co. v. Industrial Claim Appeals Office, 984 P.2d 1194 (Colo. App. 1999). Thus, we must uphold the ALJ's determination of these issues if supported by substantial evidence in the record. Section 8-43-301(8). In reviewing the ALJ's order refusing to impose penalties, we are bound by his factual findings if they are supported by substantial evidence in the record. Section 8-43-304(8), C.R.S. 2009; City of Durango v. Dunagan, 939 P.2d 496 (Colo. App. 1997). This narrow standard of review also requires that we defer to the ALJ's resolution of conflicts in the evidence, as well as credibility determinations and plausible inferences drawn from the record. Wilson v. Industrial Claim Appeals Office, 81 P.3d 1117 (Colo. App. 2003).
The ALJ made the following findings concerning the propriety of the respondents' conduct in addition to those referred to above. The Director issued an order in this matter and found that Rule 18-6 should not be read to prohibit an employer from ever talking to an authorized treating physician without the claimant being present, although certain such conversations are clearly inappropriate. Respondents' Opposed Motion for Summary Judgment, Exhibit K. The Director issued an interpretive bulletin recognizing that § 8-47-203(1) provides that filing a claim for workers' compensation is deemed to be a limited waiver of the doctor-patient privilege that applies to the injury or disease that is the subject of the case. Exhibit J at 93. One of the claimant's expert witnesses, Ms. Furutani, wrote to the Director seeking clarification as to the meaning of the term "conference" as it is used in Rule 18-6(A). Exhibit M at 97. The Director responded that the rule was intended to apply when there was a conference such as a Samms conference. [ See Samms v. District Court, 908 P.2d 520 (Colo. 1995)]. The term "conference" is meant to cover situations in which "all parties are getting together with a doctor." All parties should be present and there must be advance notice when holding a conference. Exhibit M at 98.
Dr. Hughes, a board certified occupational medicine physician, testified that the limited waiver provision of § 8-47-203(1) is ambiguous and that opinions differed among occupational medicine physicians as to the appropriateness of "staffings" with the physician without the patient being present. Tr. (5/14/09) at 15-16, 18, 29-30. Mr. Babcock acknowledged that nothing in the Workers' Compensation Act or in the Division's rules of procedure directly prohibited the staffing meetings held in this matter. Tr. (5/14/09) at 58. He testified that the language of Rule 18-6(A) is ambiguous. Tr. (5/14/09) at 46. Mr. Kanan, another attorney practicing in the area of workers' compensation, testified that the term "conference" in Rule 18-6(A) is unclear. Tr. (5/14/09) at 108-09. He considered the staff meetings held in this matter not to be conferences under Rule 18-6(A). Tr. (5/14/09) at 111. The ALJ also found that the respondents' adjuster and human resources director were persons who were necessary to resolve the claim as contemplated by § 8-47-203(1). Tr. (4/14/08) at 62; Exhibit 1.
In addition to finding no statutory or rule violation by the respondents, the ALJ found that "[based upon the conflicting opinions of the witnesses and the evidence presented, the ALJ finds that [the respondents] had an objectively reasonable basis to believe that conducting staff meetings with the [authorized treating physician] on October 11, 2006 and January 8, 2007 without prior notice to Claimant and without Claimant's attendance were not violations of WCRP 18-6(A) or Section 8-47-203(1), C.R.S." Order at 5, ¶ 20. We note in this regard that the Director indicated that the term "conference" as used in Rule 18-6(A) is meant to address situations in which "all parties are getting together with a doctor." Exhibit M at 98. One of the claimant's expert witnesses, Mr. Babcock, acknowledged that without the Director's written interpretation of Rule 18-6(A), he would be "caused concern" that the literal language of the rule would limit his own ability to communicate as a claimant's attorney regarding "that type of communication." Tr. (5/14/09) at 47. The respondents' expert witness, Mr. Kanan, also acknowledged that the rule would apply to claimants' lawyers if read literally. Tr. (5/14/09) at 107. He went on to testify that he would not expect an employer or an adjuster to know abut the rule, as opposed to those involved in billing practices. Tr. (5/14/09) at 111-12. Mr. Kanan opined that there was no violation of the rule, in part, because the respondents were involved in a case management conference, rather than a "Samms conference." Tr. (5/14/09) at 111. Moreover, Ms. Furutani, another expert witness for the claimant, sought clarification of the rule from the Director. Exhibit M at 97. Concerning the limited waiver of the physician-patient privilege under § 8-47-203(1), Mr. Babcock testified that nothing in the Workers' Compensation Act or in corresponding regulations indicated that the type of ex parte communication at issue was allowed. Tr. (5/14/09) at 39. However, he acknowledged that nothing in the Act or rules prohibited such contact. Tr. (5/14/09) at 41. Ms. Furutani opined that an employer has no right to have ex parte communications with the doctor. Tr. (5/14/09) (5/14/09) at 75. It is therefore apparent from the record that the rule and the statute are subject to substantially different interpretations as evidenced by the variety of expert opinions.
We have reviewed the record and the findings regarding penalties. The objective reasonableness of the respondents' actions is supported by substantial evidence in the record. The findings support the conclusion that the claimant failed to prove she is entitled to an award of penalties.
IT IS THEREFORE ORDERED that the ALJ's order dated June 19, 2009 is affirmed.
INDUSTRIAL CLAIM APPEALS PANEL ______________________________
John D. Baird ______________________________
Thomas Schrant
MICHELLE ELLER, LAFAYETTE, CO, (Claimant).
BOULDER VALLEY SCHOOL DISTRICT, Attn: BETH COLLINS/BOB JAMIESON, BOULDER, CO, (Employer).
CHRIS FORSYTH LAW OFFICE LLC, Attn: CHRIS FORSYTH, ESQ., DENVER, CO, (For Claimant).
RITSEMA LYON, PC, Attn: FRED RITSEMA, ESQ./KELLIE BURDICK, ESQ., DENVER, CO, 80202 (For Respondents).
CCMSI, Attn: PAULA LOWDER, GREENWOOD VILLAGE, CO, (Other Party).