Opinion
W.C. No. 3-111-363.
July 18, 2011.
ORDER
The claimant seeks review of the March 4, 2011 corrected order of Administrative Law Judge Walsh (ALJ) that denied the claim for penalties against the respondent. We set aside the order and remand this matter to the ALJ concerning the request for prior authorization. However, we affirm the denial of penalties for late reimbursement of the claimant's out-of-pocket expenses to secure prescription medications.
The claimant sought penalties against the respondent employer for failing to timely authorize an evaluation of the claimant and also for failing to timely reimburse the claimant for out-of-pocket medical expenses. Several of the ALJ's findings are summarized as follows. The claimant receives permanent total disability benefits as a result of an injury she sustained in 1993. The claimant also receives maintenance medical treatment. The claimant received a permanency rating for her cervical spine, left wrist, right shoulder, and mental impairment. On October 12 or 13, 2009, the claims adjuster for the employer received an authorized treating physician's written referral for the claimant to go to Steadman Hawkins. On June 7, 2010, the adjuster called Steadman Hawkins to approve the evaluation, and the adjuster followed up by a letter dated June 28, 2010.
On or about January 11, 2010 and February 4, 2010, the adjuster received letters from the claimant's attorney requesting reimbursement for the claimant's out-of-pocket payments of prescribed medications. The claimant does not have to pay out-of-pocket for prescriptions because she has a prescription card with a service that manages and pays for authorized prescriptions. When the adjuster received the reimbursement requests, she checked a prescription computer screen and saw that the prescriptions at issue were approved. This led the adjuster to assume that the corresponding medical bills for prescriptions had been paid and that the claimant's requests had been in error. Later, while preparing for hearing, the adjuster reviewed payment screens and realized that there had been no payments for the prescriptions. The adjuster issued a check to the claimant on August 26, 2010 to reimburse the claimant for the prescriptions.
The claimant sought prior authorization for an evaluation at Steadman Hawkins pursuant to W.C. Rule of Procedure 16-9, 7 Code Colo. Reg. 1101-3. Based on the delay in the employer's approval of the request for an evaluation, the claimant sought penalties pursuant to § 8-43-304(1), C.R.S. That statute provides for penalties against an employer who does any of the following: "(1) violates any provision of the Workers' Compensation Act (Act); (2) does any act prohibited by the Act; (3) fails or refuses to perform any duty lawfully mandated within the time prescribed by the director or the Panel; or (4) fails, neglects, or refuses to obey any lawful order of the director or the Panel." Pena v. Industrial Claim Appeals Office, 117 P.3d 84, 87 (Colo. App. 2004). The failure to comply with a procedural rule is a failure to obey an "order" within the meaning of § 8-43-304(1). Pioneers Hosp. v. Industrial Claim Appeals Office, 114 P.3d 97, 98 (Colo. App. 2005).
The imposition of penalties under § 8-43-304(1) is a two-step process, first requiring the ALJ to determine if the employer's conduct violated the Act, a rule, or an order. If a violation occurred, the ALJ must determine whether the party's actions were objectively reasonable. Colorado Compensation Insurance Authority v. Industrial Claim Appeals Office, 907 P.2d (Colo. App. 1995); see also Jiminez v. Industrial Claim Appeals Office, 107 P.3d 965, 967 (Colo. App. 2003) (reasonableness of conduct in defense of penalty claim is predicated on rational argument based in law or fact); but see Pioneers Hospital of Rio Blanco County v. Industrial Claim Appeals Office, 114 P.3d 97, 100 (Colo. App. 2005) (conduct examined to determine whether conduct was merely unreasonable without consideration of whether it was based on a rational argument).
I.
The claimant argues that the employer needed to plead the alleged insufficiency of the request for authorization as an affirmative defense. However, we find no error in the ALJ's consideration of whether the provider's request was complete for purposes of Rule 16-9. As the proponent, it was the claimant's burden to prove entitlement to a penalty.
Under Rule 16-9(E), the provider must explain the medical necessity of the requested service and provide relevant supporting medical documentation. The ALJ concluded that there was no completed request for prior authorization and that the employer, therefore, did not violate the rule. However, Rule 16-9(B) states that the request may be transmitted by someone other than the provider, as in this case.
The ALJ failed to make sufficient findings of fact regarding the completeness of the request for prior authorization. The record includes the cover letter from claimant's counsel to the employer's attorney and the treating physician's referral to Steadman Hawkins. Exhibits 10-11. The record also includes a medical report dated September 30, 2009, which in part addresses the referral. Exhibit 18. The ALJ did not find whether or when the employer received this report, or in what respect the report was deemed insufficient to complete the referral request. Since we are not able to make our own findings, it is necessary to remand this matter to the ALJ for additional findings to resolve the issue. See § 8-43-301(8), C.R.S. (Panel may remand if findings of fact not sufficient to permit appellate review).
II.
The claimant also argues that the ALJ erred by denying benefits for the employer's failure to reimburse her out-of-pocket expenditures for approved drug prescriptions. The ALJ considered penalties under § 8-43-401(2)(a), C.R.S., which requires self-insured employers to pay benefits within 30 days after they are due. In the event that the employer willfully delays payment of medical benefits for more than 30 days, it must pay a penalty amounting to eight percent of the amount of benefits wrongfully withheld. The statute was substantially amended in 2010, but the amendments were not in effect at the time the employer failed to pay for the prescriptions in issue here. See Ch. 287, §§ 2-3, § 8-43-401, 2010 Colo. Sess. Laws 1340-41. There is no assertion by the parties that the amendments control in this matter and we apply the statute as previously codified.
The court of appeals has construed the term "willful" to reflect deliberate intent, and "wrongful" to mean unlawful or unjust action, which can be shown by a determination that the offending party acted unreasonably in the circumstances. Miller v. Industrial Claim Appeals Office, 49 P.3d 334, 336 (Colo. App. 2001). The ALJ was persuaded that, although the employer's adjuster was negligent in handling the claimant's request for reimbursement, the adjuster did not act knowingly or with deliberate intent. The ALJ found that the adjuster made an effort to check and see if the prescriptions were approved, and after viewing a computer screen that indicated approval, she looked no further because prescriptions were typically paid directly by a third party administrator. Given the requirement to show willful or deliberate action on the part of the employer and the ALJ's determination that the adjuster's conduct rose only to the level of negligence, we decline to disturb the ALJ's denial of benefits under § 8-43-401(2)(a), C.R.S. As noted by the claimant, there is evidence that could support contrary inferences and findings. However, the existence of evidence which, if credited, might permit a contrary result affords no basis for relief on appeal. Cordova v. Industrial Claim Appeals Office, 55 P.3d 186 (Colo. App. 2002).
The claimant discusses the potential application of § 8-43-304(1), C.R.S., arguing that the employer's failure to reimburse the claimant in a timely manner for her prescriptions constitutes a failure to provide medical care under the provisions of the Act. See § 8-40-102(1), C.R.S. (Act to be interpreted to assure quick and efficient delivery of disability and medical benefits); see also Giddings v. Industrial Claim Appeals Office, 39 P.3d 1211 (Colo. App. 2001) (penalties under general penalty provisions of § 8-43-304(1) available for nonpayment of medical expenses where corresponding order violated). The claimant suffered the consequence of not being reimbursed in a timely manner, but she was not deprived of the benefit of her prescriptions. Moreover, the ALJ found that the claimant had a prescription card that could have been used and she was not required to pay out-of-pocket. Therefore, we are not persuaded that a penalty is appropriate under § 8-43-304(1).
The claimant also seeks application of § 8-42-101(5), C.R.S. . This subsection provides that if a party applies for a hearing regarding entitlement to medical maintenance benefits that are unpaid and contested, and such benefits are admitted fewer than 20 days before hearing (or ordered after the application for hearing is filed), the claimant receives costs incurred in pursuing the medical benefits. However, in this case the employer did not contest the claimant's entitlement to medical benefits for the prescriptions. We therefore find no error in the ALJ's failure to apply § 8-42-101(5).
IT IS THEREFORE ORDERED that the ALJ's order dated March 4, 2011 is set aside insofar as it denies a penalty for the employer's conduct regarding the request for prior authorization, and is remanded for additional findings and a new determination. The order is otherwise affirmed.
INDUSTRIAL CLAIM APPEALS PANEL
_______________________ John D. Baird
_______________________ Dona Rhodes
SHARON McDANIEL, VAIL, CO, (Claimant).
VAIL ASSOCIATES INC, Attn: CARRIE CATHCART — OCCUPATIONAL HEALTH MGR, C/O: VAIL RESORT MANAGEMENT COMPANY, KEYSTONE, CO, (Employer).
STEVEN U MULLENS, Attn: STEVEN U MULLENS PC, COLORADO SPRINGS, CO, (For Claimant).
CLISHAM, SATRIANA BISCAN, LLC, Attn: PATRICIA JEAN CLISHAM, ESQ., DENVER, CO, (For Respondents).
CCMSI, Attn: JACKIE SLADE, GREENWOOD VILLAGE, CO, (Other Party).