A Hearing Officer in a Fee Review case does not have statutory authority to remedy an overpayment of medical bills made to the provider by the insurer.

In this case, the Medical Fee Review Section determined that Philadelphia Surgery Center (the provider) was due $14,393.83 for medical services rendered to the claimant. At the Hearing Office level, the Officer concluded that the Fee Review Section failed to acknowledge a prior payment made by Excaliber Insurance (the insurer) to the provider in the amount of $54,231.88. The Hearing Officer, therefore, directed the provider to reimburse the insurer $39,838.05 as an overpayment. The provider appealed to the Commonwealth Court, arguing that the Hearing Office did not have the statutory authority to impose the remedy of reimbursement for an overpayment of medical services.

The Commonwealth Court agreed and granted the provider’s appeal. The court noted that the Hearing Office was vested with the authority to determine whether an overpayment or underpayment had occurred, citing Section 127.257(a) of the Medical Cost Containment Regulations, which states, “A provider or insurer shall have the right to contest an adverse administrative decision on an Application for Fee Review.” However, the court emphasized that Section 306(f.1)(5) of the Act establishes that the focus of the fee review process is the amount and/or timeliness of the payment from the employer or insurer. The court further indicated that the Fee Review section did not opine, one way or the other, whether the amount it determined to be due had already been paid but simply determined the value under the Act and Regulations, for the services provided. Therefore, any overpayment was the result of the Insurer’s error at the billing stage, and not that of any order of the Fee Review. According to the Court, while the Fee Review section and the Hearing Office properly determined that fact and the amount of the overpayment, absent legislative authority permitting reimbursement from a provider to an insurer for an overpayment, the Hearing Office was not authorized to order reimbursement. 
 

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