Special Workers' Compensation Alert - Pennsylvania

An Insurer/Employer that Challenges a Medical Provider’s Bill Because the Treatment Was Allegedly Not Causally-Related to the Accepted Work Injury Must Do So Through the Utilization Review Process, Not Through the Fee Review Process.

Workers’ First Pharmacy LLC v. Bureau of Workers’ Compensation Fee Review Hearing Office (Gallagher Bassett Services); 901 C.P. 2018; filed Jan. 16, 2020; President Judge Levitt

On December 18, 2016, the claimant sustained an injury to his right shoulder in the course and scope of his employment. The employer issued a Medical-Only Notice of Temporary Compensation Payable (NTCP), accepting a right shoulder strain. Later, on June 16, 2017, the claimant’s treating physician prescribed a compound pain cream, which Workers’ First Pharmacy dispensed. The pharmacy then billed the employer $4,869.99 for the cream. The employer denied payment on the basis that the diagnosis was inconsistent with the procedure, and the pharmacy filed a Fee Review Application on August 25, 2017.

Prior to the pharmacy’s fee review filing, the employer filed a termination petition, and the claimant filed a review petition, seeking to amend the description of his right shoulder strain injury. On August 25, 2017, however, a C&R Agreement settling the case was approved by the workers’ compensation judge. The C&R Agreement described the claimant’s injury as a “right shoulder strain,” and it specifically said that the settlement payments resolved any medical bills incurred prior to the date of the hearing that were related to the accepted work injury.

The Medical Fee Review Section held that the employer was obligated to reimburse the pharmacy $4,455 for the compound pain cream. The employer requested a de novo hearing to contest the fee determination, arguing that the compound cream had never been adjudicated as related to the claimant’s work injury and, thus, the Fee Review Application was premature. The pharmacy took the position that the employer should have sought Utilization Review if it believed the pain cream it dispensed was not related to the injury. The hearing officer found that the employer denied payment because of their belief that the bill for the compound cream was not related to the work injury and ultimately concluded that the pharmacy’s Fee Review Petition was premature.

The pharmacy appealed to the Commonwealth Court, arguing that its fee petition was not premature because the employer did not request Utilization Review of the treatment. The pharmacy also argued that not providing a mechanism for challenging the employer’s refusal to reimburse it violated its due process rights.

The court, citing its decisions in Armour Pharmacy I, 192 A.3d 304 (Pa. Cmwlth. 2018) and Armour Pharmacy II, 206 A.3d 660, noted that the principles in both decisions concerned violating the due process rights of providers. The court further analyzed the Supreme Court’s decision in the case of Crozer Chester Medical Center v. Department of Labor and Industry, Bureau of Workers’ Compensation Healthcare Services Review Division, 22 A.3d 189 (Pa. 2011). In that case, the Supreme Court held that an employer may question liability for treatment by filing a petition to modify the description of injury in the Notice of Compensation Payable or by seeking Utilization Review of treatment offered for an accepted work-related injury.

According to the Commonwealth Court, because liability for the claimant’s work injury was established, the employer could have challenged liability for the pain cream by either filing a modification petition, to change the scope of the injury, or by seeking Utilization Review of the treatment, but did neither. The court interpreted the employer’s reasoning for denying the pharmacy’s bill on the basis that the diagnosis was inconsistent with the procedure as another way of saying that the compound cream was not “reasonable or necessary for treating the claimant’s shoulder sprain.” In the court’s view, the pharmacy’s Application for Fee Review was not premature because the employer’s nonpayment did not fall within the exceptions for payment of an invoice within 30 days, which are denial of liability for the alleged work injury, filing a request for Utilization Review or the non-lapsing of the 30-day period allowed for payment of a medical bill.

Sidebar: The pharmacies dispensing expensive compound pain creams are aggressively pursuing payment through the fee review process. If a claim is open, be careful in denying payment of a bill for pain cream on the basis that is is “unrelated” to the injury when, in reality, the denial is based on the pain cream not being reasonable or necessary. This case suggests possible procedural changes in handling prescriptions when an injury has been accepted and the claim settled. Please feel free to contact us directly with any questions

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