The board held an employer liable to pay the claimant's surgery bill as well as a statutory fine where it failed to properly submit the medical bill to utilization review within the required time.

This case involved a legal hearing requested by the claimant on a utilization review issue, and the decision provides some instruction on the handling of medicals under the Healthcare Practice Guidelines. The claimant had surgery for an accepted work injury without any preauthorization having been given for the surgery. Thereafter, the surgical center submitted its bills and the operative report to the employer's insurance carrier by certified mail on September 27, 2010. The bill consisted of two parts: for the treating surgeon in the amount of $32,538; for his assistant in the amount of $6,510. The carrier, on October 19, 2010, filed a timely utilization review request but only regarding the bill for the physician's assistant. The claimant's contention was that the employer had not properly followed the utilization review procedure. The Board determined that the employer had neither paid the charges of the surgeon nor submitted them to utilization review as required by §2322 F (h). The Board further noted that the requested utilization review as to the bill from the physician's assistant was rejected and properly so on the basis that the treatment provided by the surgeon and his assistant were the same and that utilization review could not review the treatment in question unless both bills were being challenged. Accordingly, the Board concluded that the carrier had failed to perfect the utilization review referral and, therefore, both the bill for the doctor as well as that for his assistant must be paid in accordance with the Practice Guidelines. In addition, since the carrier had failed either to pay or properly contest the surgeon's bill within the 30-day time limit, it was found liable for a statutory fine in the minimum amount of $1,000. A second issue raised by the claimant was that the carrier had improperly used a third party in an attempt to negotiate a lower payment on the surgeon's bill by offering to pay the amount of $19,522. The Board found that there was nothing improper with this use of a third party and that the Act does not prohibit an employer or carrier from attempting to negotiate a lesser payment to a health care provider. The reason for this is that the fee schedule established under the Practice Guidelines sets forth the maximum allowable payment, but this does not mean the provider cannot accept a lesser amount. On the other hand, the Board did point out that the provider is not required to accept such a lower payment and that, obviously, the doctor in this case refused the lower amount offered.

Case Law Alert - 2nd Qtr 2011