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The fee review arena lacks the jurisdiction to determine reasonableness and necessity of treatment. Evidence presented by an insured that billing from a provider was contrary to Medicare policy does not preempt the issue of reasonableness and/or necessity

January 1, 2019
Workers’ Compensation Security Fund v. Bureau of Workers’ Compensation, Fee Review Hearing Office (Scomed Supply, Inc.); 429 C.D. 2018; filed Oct. 5, 2018; Sr. Judge Leadbetter

The claimant was using a neuromuscular electrical stimulation device. The provider dispensed supplies, including two replacement lead wires, on a bi-monthly basis, four times in a six-month period, and billed the insurer on the same basis. The insurer denied payment, stating the provider was only entitled to an annual payment for lead wires.

After its applications for fee review were denied, the provider appealed to the Medical Fee Review Hearing Office. At that level, the insurer presented evidence in the form of a Medicare Advantage Policy statement, which said that lead wires would “rarely” be medically necessary more often than yearly. The hearing officer awarded payment for the lead wires, holding that the medical necessity and reasonableness of treatment is determined through the Utilization Review Process. According to the hearing officer, the fee review arena lacks the jurisdiction to determine the reasonableness and necessity of treatment.

The insurer appealed to the Commonwealth Court and argued that, because payment for lead wires supplied more often than annually is contrary to Medicare policy, this preempts the issue of reasonableness and/or necessity, removing it from the utilization arena and putting it into the medical fee review arena. The court disagreed, noting that the fee review process presupposes that liability has been established. According to the court, the insurer’s remedy would have been through the utilization review process and was not a defense in the fee review process.


Case Law Alerts, 1st Quarter, January 2019

Case Law Alerts is prepared by Marshall Dennehey Warner Coleman & Goggin to provide information on recent developments of interest to our readers. This publication is not intended to provide legal advice for a specific situation or to create an attorney-client relationship. Copyright © 2019 Marshall Dennehey Warner Coleman & Goggin, all rights reserved. This article may not be reprinted without the express written permission of our firm.

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