Armour Pharmacy v. Bureau of Workers’ Compensation Fee Review Hearing Office (National Fire Insurance Company of Hartford); 1613 C.D. 2017; filed August 7, 2018; President Judge Leavitt

A C&R Agreement cannot be used to set aside a fee review determination. Rather, a determination in favor of a provider may be set aside only by following the proper procedure set forth in the Act.

The claimant and the employer entered into a C&R Agreement in 2000, settling wage loss benefits, but leaving medical treatment open. In 2015, the employer requested Utilization Review of a topical compound pain cream. A Utilization Review Organization determined the cream was reasonable and necessary, and the employer did not file a Utilization Review Petition. Later, an identical cream was prescribed for the claimant, and the employer denied payment “based on a Utilization Review.” The billing pharmacy filed a timely Fee Review. It was determined that the employer owed the pharmacy $6,644.30 plus 10% interest.

The employer requested a hearing to contest the Fee Review Determination. The employer presented the Hearing Officer with a copy of a C&R Agreement approved by a workers’ compensation judge just three weeks before. The agreement included language stating: “No past, present or future benefits shall be paid for any compounded prescription cream, including but not limited to compound prescription creams prescribed by physician Dr. Jason Bundy. (See Addendum).” The agreement also said there was “a belief” that the physician had a financial interest in the pharmacy and that neither the physician nor the pharmacy would hold the claimant responsible for charges related to the compounding prescription cream.

In light of the C&R Agreement, the Hearing Officer concluded that the Medical Fee Review Determination could not stand. The pharmacy then appealed to the Commonwealth Court, which held the C&R Agreement could not be used to set aside a Fee Review Determination which concludes that an employer owes reimbursement to a provider for a particular course of treatment. According to the court, paragraph 10 of the C&R Agreement—stating that the employer would pay reasonable, necessary and related medical expenses incurred before the hearing date—obligated the employer to pay for the compound creams dispensed by the pharmacy in 2016 since the expense had already been incurred. The court further noted that a valid C&R Agreement is binding upon the parties, but the pharmacy was not a party to the agreement. Consequently, the court held that a C&R Agreement to which a provider is not a party cannot be used to deprive that provider of the fee review procedures or to excuse the employer from paying the provider. To do so would violate the Act and due process.

 

Case Law Alerts, 1st Quarter, January 2019

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