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What's Hot in Workers' Comp

The Commonwealth Court of Pennsylvania Narrows Who May Seek Recourse Through The Workers’ Compensation Act’s Fee Review Process

Scomed Supply v. Hartford Accident & Indemnity Company and Sedgwick Claims Management Services (Bureau of Workers' Compensation Fee Review Hearing Office), No. 79 C.D. 2025 (Pa. Cmwlth. March 16, 2026)

March 19, 2026

by Alana M. Staniszewski

On March 16, 2026, the Pennsylvania Commonwealth Court provided much-needed clarification on who may seek recourse under Section 306(f.1)(5) of the Pennsylvania Workers’ Compensation Act—specifically through the Fee Review process. In Scomed Supply v. Hartford Accident & Indemnity Company and Sedgwick Claims Management Services, the court held that Scomed Supply, a retail seller of durable medical equipment and medical supplies, does not qualify as a “health care provider” under the Act, and therefore had no standing to dispute the amount of payment issued by the workers’ compensation insurance carrier through a fee review.

The case itself stems from a straightforward set of facts. Scomed provided medical supplies (electrodes, batteries, lead wires, moisturizer, and alcohol wipes) to the claimant. The supplies were all related to the claimant’s TENS unit that had been prescribed by the claimant’s physician for treatment of a work-related injury. Between July 2023 and April 2024, Scomed provided these supplies to the claimant on ten separate occasions, and billed the workers’ compensation carrier.

The carrier paid less than the full amount billed. Unsatisfied with the amount of the payment, Scomed filed five fee review applications with the Bureau of Workers’ Compensation Medical Fee Review Section. The section found that the carrier was not required to issue any additional payment. Still unsatisfied with the amount of payment issued, Scomed filed hearing requests, which were assigned to Hearing Officer Colleen Pickens.

In its defense, the carrier argued and Hearing Officer Pickens agreed that Scomed was not a health care provider as defined by Section 109 of the Act and thus, had no recourse under Section 306 (f.1)(5). Notably, a Fee Review Hearing Officer has the jurisdiction to conduct a hearing on whether a person invoking the remedy set forth in Section 306(f.1)(5) is a “provider" under the Act. See Armour Pharmacy v. Bureau of Workers 'Comp. Fee Rev. Hearing Off (Wegman's Food Markets, Inc.), 206 A.3d 660, 671 (Pa. Cmwlth. 2019) (en banc).

Section 109 of the Act defines a "health care provider" as

any person, corporation, facility or institution licensed or otherwise authorized by the Commonwealth to provide health care services, including, but not limited to, any physician, coordinated care organization, hospital, health care facility, dentist, nurse, optometrist, podiatrist, physical therapist, psychologist, chiropractor or pharmacist and an officer, employee or agent of such person acting in the course and scope of employment or agency related to health care services. (emphasis added).

Scomed argued that the Act defines health care providers broadly and should be construed to include durable medical equipment. The court rejected this argument, noting that both Section 109 and the Act's Medical Cost Containment (MCC) Regulations describe entities that are "licensed by the Commonwealth to provide health care services." The court emphasized that Scomed concerns itself primarily with the sale or distribution of medical goods, not services. They do nothing to treat a patient, but instead merely dispense a product and function as a middleman. The court emphasized that this is insufficient to extend the recourse offered by the Fee Review process.

The court then reviewed two related decisions issued by it and the Pennsylvania Supreme Court: Harburg Medical Sales Company v. PMA Management Corp., No. 635 C.D. (Pa. Cmwlth., August 30, 2021) (holding medical supplies distributor at issue was not a health care provider because it was neither licensed nor authorized by the Commonwealth to provide health care services); and Schmidt v. Schmidt, Kirifides, and Rassias, PC (WCAB), 333 A.3d 310 (Pa. 2025) (holding any item prescribed by a health care provider as a part of a treatment plan for a work-related injury qualifies as medicines and supplies under Section 306(f.1)(1)(i)).

Scomed attempted to argue that it was distinguishable from the company at issue in the Harburg case, emphasizing that its various accreditations and compliance with federal regulations made it a more qualified provider than the one at issue in Harburg. While the court acknowledged Scomed’s accreditations, it rejected the argument, again turning the focus to Scomed’s function as a provider of goods, not health care services.

Scomed also attempted to assert that the Pennsylvania Supreme Court’s decision in Schmidt should permit recourse for itself under the Act’s fee review process, as the decision broadly interprets the phrase “medicines and supplies” and broadly interprets what items should be covered by the insurance carrier. However, the court emphasized that whether an item qualifies as a covered supply, is an entirely separate issue from who qualifies as a provider, and the core of this litigation was whether Scomed was a provider. As such, the court also rejected this argument.

Finally, Scomed attempted to argue that as a matter of policy, the court should extend the recourse offered through the fee review process, as shutting medical supply companies out of the process undermines the Act and impacts injured workers’ access to necessary supplies. The court acknowledged Scomed’s concern but asserted that the plain language of the Act does not permit an extension of the fee review process, and if Scomed wants this to change, that change must come from the legislature.

Ultimately, this case provides workers’ compensation carriers and claims administrators a much needed line of defense against fee review challenges from entities that supply medical goods, not services, to injured workers. It also provides defense counsel a vehicle through which they can seek the dismissal of some of the ever increasing number of fee reviews. However, this case does leave an issue unresolved—what recourse, if any, do these medical supply companies have when they believe bills have been underpaid? Until that question is resolved by the legislature or further court order, practitioners and insurers alike should review all fee reviews to determine the applicability of this new defense.

Firm Highlights

Thought Leadership

Ohio Supreme Court Holds That a Binding Appraisal Award May Not Be Set Aside Absent Specific Evidence of Manifest Mistake or Fraud

On July 23, 2026, the Ohio Supreme Court issued a rare opinion on the binding effect of an appraisal award in a property insurance policy.  The Court in One Church held: A binding appraisal award will not be set aside unless an error is so palpably wrong that it undermines the intent of the agreement, such as corruption or gross mistake, not a mere error of judgment—To plead a claim of mistake with particularity as required by Civ.R. 9(B), facts alleged in a complaint must constitute the elements of mistake—Allegation that additional, hidden damage was discovered after appraisal award failed to state a claim of mistake that could justify setting aside binding appraisal.  The case arose out of a claim brought by One Church against its insurer, Brotherhood Mutual Insurance Company for roof damage from a storm. Pursuant to the terms of the insurance policy, the parties agreed to submit the matter to appraisal. The two appraisers inspected the building, and both appraisers agreed that the damages were $313,271.98. The insurer paid the agreed appraised amount.  Thereafter, the insured submitted a claim for an additional $206,663.09 in damages. The insured argued that these additional damages were not discovered until after the repairs began, and that they should be permitted to submit an additional claim, even though there had already been a binding appraisal of damages. The insurer refused to pay the additional damages, and the insured sued for breach of contract and bad faith.  In the trial court, the insurer moved to dismiss for failure to state a claim, arguing that the binding appraisal award barred any further claims. The insured took the position that additional hidden damages could not be discovered until after the repairs began, and therefore there was a mutual mistake. The trial court dismissed the case on the insurer’s motion, because there was no “evidence of fraud, misfeasance, or mistake”. The Court of Appeals agreed that appraisal awards are generally binding, but noted that an appraisal award can be set aside for fraud or manifest mistake. The Court of Appeals reversed and remanded the case to the trial court, finding that the insured had pled mistake with sufficient particularity. The insurer appealed to the Ohio Supreme Court. On appeal, the Ohio Supreme Court reversed the Court of Appeals, and reinstated the trial court decision dismissing the case for failure to state a claim upon which relief can be granted. The Supreme Court found that since the insured had already demanded appraisal, and the appraisal award was binding, “something more than error of judgement, such as corruption in the arbitrator, or gross mistake” must be pled with particularity, and proven for the insured to override the appraisal award. Since the complaint did not allege fraud or manifest mistake with sufficient particularity, something more than a mere error of judgment, the complaint was insufficient to state a claim.  The complaint in this case did not challenge the appraisal award. It pled that additional damages were discovered that were not apparent when the appraisal was done. It did not specify “who discovered the damages, how they were discovered, where they were found, why they were previously hidden, or why they rise to the level of a manifest mistake that the “appraiser would have corrected...had it been called to his attention”. Id at ¶22 citing Lakewood Mfg. Co. v. Home Ins. Co. of New York, 422 F.2d 796, 798 (6th Cir. 1970). Cases deciding the effect of appraisal awards are unusual. The Ohio Supreme Court’s decision in One Church relies primarily on 19th century case law for its conclusion. This emphasizes the fact that there is minimal case law deciding the effect of binding appraisal clauses in property insurance policies, and makes this case all the more significant. A lengthy dissent was written by Justice Fisher, who would have affirmed the Court of Appeals decision reversing and remanding the case for a decision on the merits. Of course, the decision works both ways, and an insurer dissatisfied with a binding appraisal award will likewise be without further recourse absent evidence of corruption, fraud, misfeasance, or manifest mistake, which must be pled with particularity. To constitute manifest mistake, “the mistake must be of such character that the arbitrator or appraiser would have corrected it had it been called to his attention.”  Lakewood Mfg. Co. v. Home Ins. Co. of New York, 422 F.2d 796, 798 (6th Cir. 1970).  The majority opinion does not specifically identify what would have been sufficient to plead mistake with particularity, or if the insured could have amended the complaint to overcome the deficiencies. The dissent argues that this was not really a case alleging mistake, but rather a question of contract interpretation. The insured did not challenge the appraisal, but argued that the hidden damage was not part of the appraisal, and the appraisal only covered the known damages.  However, this argument did not carry the day with the majority. 

Thought Leadership

New Jersey Appellate Division Affirms Exclusion of Legal Malpractice Expert as Impermissible Net Opinion

Jack Slimm and Jeremy Zacharias obtained a favorable decision on behalf of their client in a case centering on the admissibility of expert testimony in legal malpractice actions. In Martin v. Loury, the New Jersey Appellate Division affirmed the exclusion of a plaintiff's legal malpractice expert, holding that the expert's opinions on causation and damages were too speculative to support the malpractice claim. The legal malpractice action arose from an underlying employment dispute involving claims for damages stemming from the breach of an employment agreement. The plaintiff alleged that defense counsel committed malpractice during a second trial by failing to recall the plaintiff as a rebuttal witness after the employer's CEO testified. According to the plaintiff's expert, additional rebuttal testimony would have bolstered the plaintiff's damages claims and led to a more favorable result. Both the trial court and the Appellate Division rejected that theory. The courts found that the expert could not explain how the proposed rebuttal testimony would have altered the outcome of the underlying case or resulted in any additional recoverable damages. Notably, the trial judge in the underlying employment matter had already rejected the CEO's testimony as not credible and had accepted the damages analysis advanced by the plaintiff. The court had also determined that the amount of damages was not genuinely disputed. As a result, the expert's opinion that additional rebuttal testimony would have produced a better outcome was unsupported by the record and based on speculation rather than evidence. The Appellate Division agreed that neither the plaintiff nor the expert could identify any actual damages attributable to the alleged malpractice or demonstrate the required element of proximate causation. The court further upheld the trial court's application of New Jersey's net opinion doctrine, finding that the expert failed to provide the necessary "why and wherefore" supporting his conclusion that the attorney's conduct caused a compensable loss. Because the opinions rested on unquantified possibilities rather than demonstrable facts, they were inadmissible. Key Takeaway for Legal Malpractice Defendants For attorneys and firms defending legal malpractice claims, Martin v. Loury underscores the importance of closely scrutinizing an opponent's expert report on the critical elements of proximate causation and damages. The decision demonstrates that a malpractice claim cannot survive where an expert merely speculates that different litigation tactics might have produced a better result. Instead, the plaintiff must present admissible expert testimony grounded in the record that explains how the alleged attorney error probably changed the outcome of the underlying matter and resulted in measurable damages.

Result

No-Cause Jury Verdict Secured in Wrongful Death Trial

We successfully obtained a no-cause jury verdict in a 13-day wrongful death trial. The decedent, a 59-year-old man, was admitted to the emergency room on February 15, 2019, with complaints of abdominal pain, decreased appetite, and constipation, despite the use of laxatives. The patient did not complain of any nausea, vomiting, or diarrhea. He had a significant medical history including diabetes, hypertension, prior coronary artery stenting, morbid obesity (with past gastric bypass surgery), longstanding ventral hernia, and back pain. A CT scan revealed multiple hernias and a potential closed-loop bowel obstruction, leading to a surgery consultation. Our client, an emergency general surgeon, interpreted that the patient did not have a closed loop or any significant obstruction and recommended non-surgical management. The patient was approved to have clear liquids, and had a vomiting incident shortly after, but our client was not notified. The patient was returned to NPO status, and after improving overnight, he was returned to “clears” and additional medical and renal consults were ordered. Our client did not receive any communications from the residents/nurses of any changes in the patient’s condition. On February 18, 2019, two rapid responses were called due to increased heart rate and vomiting. It is believed that the vomiting resulted in aspiration, causing sepsis, ultimately leading to the patient’s death. During the trial, the plaintiff’s sole medical expert highlighted imaging on the wrong hernia, which called into question all of his opinions in the case. We made key objections related to the expert testimony, limiting what the allegations were, and preventing new allegations from being made. After approximately two and a half hours of deliberating, the jury returned a no-cause verdict.