Wendell Goss v. City of Crestwood Fire Department

Issued by THE LABOR AND INDUSTRIAL RELATIONS COMMISSION

(Modifying Award on Medical Fee Dispute)

**Injury No.:** 14-101759

**Medical Fee Dispute No.:** 14-01645

**Employee:** Wendell Goss

**Employer:** City of Crestwood Fire Department

**Insurer:** St. Louis Area Insurance Trust

**Health Care Provider:** St. Luke's Hospital

Pursuant to the provisions of § 287.140 RSMo and 8 CSR 50-2.030, the above-captioned award is submitted to the Labor and Industrial Relations Commission (Commission) for review under § 287.480 RSMo. We have reviewed the evidence, read the petitioner's brief, and considered the whole record. Pursuant to § 286.090 RSMo, we modify the award and decision of the administrative law judge. We adopt the findings, conclusions, decision, and award of the administrative law judge to the extent that they are not inconsistent with the findings, conclusions, decision, and modifications set forth below.

On May 25, 2017, St. Luke's Hospital (medical provider) filed its Application for Payment of Additional Reimbursement of Medical Fees (Application) with the Division of Workers' Compensation (Division).

On June 30, 2017, the Division mailed to the parties a Medical Fee Dispute Notice of Evidentiary Hearing advising that hearing would be held on medical provider's Application on July 25, 2017.

Employer/insurer did not file an answer to medical provider's Application, or attend the hearing on July 25, 2017, to present a defense.

On August 25, 2017, the administrative law judge issued an award concluding: (1) employer/insurer is liable to medical provider in the amount of $2,403.32 for unpaid medical fees; (2) employer/insurer is liable to medical provider in the amount of $480.60 in interest on the medical fees; and (3) employer/insurer is liable to medical provider in the amount of $750.00 in attorney's costs and fees pursuant to § 287.560 RSMo.

Insurer¹ filed a timely application for review alleging the administrative law judge erred because: (1) insurer was not provided notice of the hearing in accordance with § 287.520 RSMo; and (2) the award of pre-judgment interest is contrary to the mandate of strict construction under § 287.800 RSMo.

For the reasons stated below, we modify the award and decision of the administrative law judge referable to the issue of whether medical provider is entitled to prejudgment

¹ The application for review was filed by an attorney representing insurer only. For this reason, we refer solely to the insurer (as opposed to the employer/insurer) when addressing and resolving the arguments pending before us on appeal.

Injury No.: 14-101759

Medical Fee Dispute No.: 14-01645

Employee: Wendell Goss

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interest on the award of medical fees. We additionally supplement the decision of the administrative law judge in order to address insurer's argument it was not provided adequate notice of the proceedings before the Division.

**Discussion**

**Notice of proceedings before the Division**

As recounted in the procedural history set forth above, employer/insurer failed to attend the hearing before the administrative law judge on July 25, 2017, and thus did not present a defense of any kind in this matter. Insurer argues that its failure to attend the hearing should be excused, however, because the Division's Notice of Evidentiary Hearing was not given in accordance with § 287.520 RSMo, where the hearing was set fewer than 30 days from the date of the notice.

Section 287.520 RSMo provides, in relevant part, as follows:

> Any notice required under this chapter shall be deemed to have been properly given and served when sent by registered or certified mail properly stamped and addressed to the person or entity to whom given, at the last known address in time to reach the person or entity in due time to act thereon, or to counsel for that person or entity in like manner.

On the topic of proceedings, like this one, involving a medical fee dispute, Division rule 8 CSR 50-2.030(1)(K) provides, in relevant part, as follows:

> The evidentiary hearing shall be held at a place and time to be set by the division. The division shall notify all parties as to the time and place of the hearing. An administrative law judge may continue the hearing for good cause.

Neither the plain language of § 287.520 or the relevant Division regulation required the Division to send the notice of evidentiary hearing 30 days or more prior to the date set for hearing.² Instead, the Division was statutorily required under § 287.520 to furnish notice to the parties "in due time to act thereon." The question before us is whether the Division did so.

The record before us includes copies of the Medical Fee Dispute Notice of Evidentiary Hearing, Certified Mail Receipts including tracking numbers for the separate notices mailed to both employer and insurer, and USPS Tracking Results corresponding to said tracking numbers. Together, these records constitute prima facie evidence that the Division mailed the notice to employer and insurer on June 30, 2017.³ We credit this

² By way of contrast, in the context of proceedings in contested workers' compensation cases involving injured employees, Division rule 8 CSR 50-2.010(9)(C) provides that "[t]he parties shall be notified of the date, time and place of any setting at least ten (10) days prior to the setting."

³ Division rule 8 CSR 50-2.010(12)(C) provides that "[t]he records of the division shall constitute prima facie evidence of the date of mailing of any notice, determination, award or other paper mailed pursuant to Chapter 287, RSMo." Insurer does not argue that the Division used incorrect addresses for employer or insurer.

Injury No.: 14-101759

Medical Fee Dispute No.: 14-01645

Employee: Wendell Goss

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evidence, and find that the Division mailed the notice to employer and insurer on June 30, 2017.

Indeed, insurer, in its brief, concedes employer received the notice on July 3, 2017.4 Nevertheless, insurer argues that the notice was defective, because it contained erroneous information. Specifically, insurer points out the notice incorrectly states that it was "sent 8 weeks before the date of the hearing" and that employer/insurer was required to "file an answer within thirty (30) days from the date of [the] notice," where that 30-day period would have ended six days after the hearing was set. Transcript, page 12.

While we recognize this obvious error, and acknowledge that it likely prompted some confusion, insurer's application for review and brief wholly fail to explain why this error excused employer/insurer of the obligation to either respond to the notice before July 25, 2017, or to attend the hearing before the Division on that date. If employer and/or insurer were confused as to the meaning of the notice and their obligations with respect thereto, it would appear that nothing prevented their representatives from contacting the Division to note the error and to present an objection to the Division's scheduling the hearing on July 25, 2017. In our view, a reasonable party would contact the Division to seek clarification upon receipt of a notice from the Division that contained confusing or conflicting information, rather than ignore the notice until after the passing of the hearing date. Based on the record before us, and because insurer does not so allege in either its application for review or brief, we find that insurer did not seek clarification of the meaning of the notice, or file any objection to the scheduling of the hearing, at any time before July 25, 2017.

In light of these circumstances, and because insurer concedes employer had actual notice of the hearing at least as of July 3, 2017, we conclude the Division provided notice of the hearing "in due time to act thereon" for purposes of § 287.520 RSMo. For this reason, we decline to burden the Division or the opposing party with an order remanding this matter to the Division for additional evidentiary proceedings.

Prejudgment interest on an award of medical fees pursuant to § 287.140.4 RSMo

Medical provider seeks prejudgment interest on the unpaid medical fees at issue in this matter. The administrative law judge concluded that McCormack v. Stewart Enters., 956 S.W.2d 310 (Mo. App. 1997) authorizes an award of prejudgment interest on an award of medical fees in the context of a proceeding pursuant to § 287.140.4 RSMo on a medical provider's Application for Payment of Additional Reimbursement. Insurer appeals, arguing that McCormack cannot be applied in this matter to support the award of interest. After careful consideration, we agree, for the following reasons.

4 While conceding that employer received the notice, insurer argues in its brief that the record before us contains only the notice itself, which would be insufficient to support a finding the notice was mailed, citing Weston Transp. v. Sharp, 926 S.W.2d 219 (Mo. App. 1996), instructing that "[t]he presence of a letter in the court's file is not proof the letter was mailed to the address." However, as we have noted, the record does not consist of only the notice itself, but additional records that constitute prima facie evidence of mailing. In any event, pursuant to § 287.300 RSMo, "[s]ervice on the employer shall be sufficient to give the division or the commission jurisdiction over the person of both the employer and his insurer."

Injury No.: 14-101759

Medical Fee Dispute No.: 14-01645

Employee: Wendell Goss

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Section 287.140 RSMo authorizes the Division and Commission to entertain and resolve certain disputes between medical providers and employer/insurers over the payment of medical fees and charges. Specifically, § 287.140.13(5) RSMo provides as follows:

If an employer or insurer fails to make payment for authorized services provided to the employee by a hospital, physician or other health care provider pursuant to this chapter, the hospital, physician or other health care provider may proceed pursuant to subsection 4 of this section with a dispute against the employer or insurer for any fees or other charges for services provided.

Meanwhile, § 287.140.4 RSMo provides as follows:

The division shall, by regulation, establish methods to resolve disputes concerning the reasonableness of medical charges, services, or aids. This regulation shall govern resolution of disputes between employers and medical providers over fees charged, whether or not paid, and shall be in lieu of any other administrative procedure under this chapter. The employee shall not be a party to a dispute over medical charges, nor shall the employee's recovery in any way be jeopardized because of such dispute. Any application for payment of additional reimbursement, as such term is used in 8 CSR 50-2.030, as amended, shall be filed not later than:

(1) Two years from the date the first notice of dispute of the medical charge was received by the health care provider if such services were rendered before July 1, 2013; and

(2) One year from the date the first notice of dispute of the medical charge was received by the health care provider if such services were rendered after July 1, 2013. Notice shall be presumed to occur no later than five business days after transmission by certified United States mail.

The Division has promulgated the regulations referenced in the foregoing language; these are set forth at 8 CSR 50-2.030. We have carefully searched the statutory and regulatory provisions applicable to this matter. Nowhere within these controlling statutory and regulatory provisions do we find any authorization, express or implied, for an award by the Division or Commission of prejudgment interest in favor of a medical provider in the context of proceedings pursuant to § 287.140.4.

We acknowledge that in McCormack v. Stewart Enters., 956 S.W.2d 310 (Mo. App. 1997), and in a number of subsequent cases, the courts have authorized awards of prejudgment interest in favor of employees in the context of the proceeding to determine an employee's right to compensation under Chapter 287. Here, the administrative law judge concluded (not unreasonably) that, where the subject of the underlying dispute is unpaid medical fees, the logic of McCormack should apply to a medical provider's

Injury No.: 14-101759

Medical Fee Dispute No.: 14-01645

Employee: Wendell Goss

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application for same. However, in the more recent case of *Harrah v. Tour St. Louis*, 415 S.W.3d 779 (Mo. App. 2013), the court distinguished *McCormack* in the context of an employee's request for prejudgment interest on an award of medical expenses from the Second Injury Fund, in a case involving an uninsured employer. In holding the employee was not entitled to prejudgment interest in that context, the court provided the following comments, which we deem instructive:

> [T]he plain language of Section 287.220 makes no provision for an award of interest against the Fund. The legislature did not affirmatively provide for pre-judgment interest as part of the Fund's liability and strict construction does not allow courts to go outside of the statute when, as here, its terms are clear. Section 287.220's language reflects the legislature's intent for the Fund to pay for fair, reasonable, and necessary expenses. If the legislature intended for Section 287.220 to include prejudgment interest, it would have expressed its intentions in plain and unambiguous terms.

*Id.* at 782.

By the same token, we must recognize in this case that the plain language of § 287.140 makes no provision for an award of interest against an employer/insurer in the context of a medical provider's application for unpaid medical fees. The strict construction mandate under § 287.800.1 RSMo⁵ does not allow us to go beyond the language of the applicable statute to infer that the legislature intended to authorize such awards. For this reason, we are not persuaded to extend the *McCormack* analysis to proceedings pursuant to § 287.140.4.

In sum, we conclude medical provider is not entitled to prejudgment interest in this matter, and that employer/insurer is not liable for same.

We modify the award of the administrative law judge as to the issue of prejudgment interest.

Employer/insurer is not liable to medical provider for the payment of $480.60 in interest on the medical fees awarded.

The award and decision of Administrative Law Judge John K. Ottenad is attached and incorporated herein to the extent not inconsistent with this decision and award.

The Commission approves and affirms the administrative law judge's allowance of an attorney's fee herein as being fair and reasonable.

⁵ "Administrative law judges, associate administrative law judges, legal advisors, the labor and industrial relations commission, the division of workers' compensation, and any reviewing courts shall construe the provisions of this chapter strictly." § 287.800.1 RSMo.

Employee: Wendell Goss

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Given at Jefferson City, State of Missouri, this 16th day of August 2018.

LABOR AND INDUSTRIAL RELATIONS COMMISSION


John J. Larsen, Jr., Chairman

SEPARATE OPINION FILED

Reid K. Forrester, Member

SEPARATE OPINION FILED

Curtis E. Chick, Jr., Member

Attest:


Injury No.: 14-101759

Medical Fee Dispute No.: 14-01645

Employee: Wendell Goss

Based on my review of the record as well as my consideration of the relevant provisions of the Missouri Workers' Compensation Law, I agree with the majority's decision reversing the award of prejudgment interest against employer/insurer; however, I disagree with the majority's decision to affirm this default award against employer/insurer, because I believe that employer/insurer was deprived effective notice of these proceedings.

At the outset, I note that the healthcare provider seeking this award of medical fees from employer/insurer failed to take advantage of the opportunity to file a brief with this Commission. As a result, I would deem the points raised in insurer's brief to be essentially conceded by the healthcare provider, as it would inappropriately place this Commission in the role of an advocate, to the extent we are invited to speculate as to healthcare provider's possible responses (if any) to insurer's argument.

The question before us is whether the Division's Notice of Evidentiary Hearing of June 30, 2017, constituted "proper" notice to employer/insurer of the proceedings before the administrative law judge, including the hearing set for July 25, 2017. If not, and if employer/insurer's due process rights were prejudiced thereby, we must remand this matter to allow employer/insurer a chance to be heard.

An elementary and fundamental requirement of due process in any proceeding which is to be accorded finality is notice reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections. The notice must be of such nature as reasonably to convey the required information, and it must afford a reasonable time for those interested to make their appearance[.]

*Mullane v. Cent. Hanover Bank & Tr. Co., 339 U.S. 306 (1950).*

In this case, the Division's notice was intended to serve two purposes: (1) to fix the date of the evidentiary hearing "more than 8 weeks away" and (2) to trigger the regulatory requirement under 8 CSR 50-2.030(1)(I) that the employer/insurer file its answer within 30 days. It is uncontested that the notice wholly failed to accomplish either purpose.

First, the notice of June 30, 2017, proclaimed that, "A continuance will not be granted due to lack of notice since this notice is being sent 8 weeks before the date of hearing," where the same notice set the date of the hearing for July 25, 2017, a date fewer than four weeks away. Transcript, page 12. As the administrative body charged with original jurisdiction to hear medical fee disputes, I consider the Division to be the subject-matter experts on the topic of the amount of time sufficient to prepare for an evidentiary hearing in the context of a medical fee dispute, and I believe we should defer to the Division's judgment in this regard. Based on the language on the notice itself, I find that the Division considers eight weeks sufficient time to prepare for the hearing; I conclude, therefore, that a notice of hearing provided eight weeks prior to the hearing constitutes notice given "in due time to act thereon" for purposes of § 287.520 RSMo. Here, where

Injury No.: 14-101759

Medical Fee Dispute No.: 14-01645

Employee: Wendell Goss

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it is uncontested that the Division's notice did not give employer/insurer eight weeks to prepare or act on the notice, but instead less than half that span of time, I conclude the notice fails to satisfy the Division's statutory notice obligation under § 287.520.

Second, the notice failed to appropriately account for employer/insurer's right to file an answer to the health care provider's application for an evidentiary hearing within 30 days, with the result that the administrative law judge was not authorized to hear this matter on July 25, 2017. Division rule 8 CSR 50-2.030(1)(I) provides as follows:

> If the total amount of the additional reimbursement sought is more than one thousand dollars ($1,000), and the parties are unable to resolve their dispute, the health care provider may file a written application for an evidentiary hearing of the medical fee dispute. The health care provider shall forward a copy of the application for an evidentiary hearing to all parties. The employer or insurer shall file an answer to the application for an evidentiary hearing on a division-approved form. The answer shall be filed within thirty (30) days from the date of the application. The division may extend the thirty-(30-) day time period for good cause. If the employer or insurer fails to file a timely answer the facts contained in the application are deemed admitted as true, but conclusions of law are not deemed admitted. An evidentiary hearing shall be scheduled in front of an administrative law judge.

Pursuant to this rule, employer/insurer had a right to file an answer to the application for evidentiary hearing within 30 days of the Division's notice. Six days before that time lapsed, however, the Division went ahead with a hearing on the application. The Division thus failed to follow the proper regulatory steps for proceeding forward on the application. It follows that the administrative law judge thus lacked authority to call this matter for hearing, because employer/insurer's 30-day period for filing an answer had not yet run. For this reason alone, the award must be vacated, and the matter remanded to allow employer/insurer an opportunity to file its answer and be heard on the merits.

To be very clear, I do agree with the Commission majority that, if a party has actual notice of impending proceedings before the Division, that party has an obligation to take steps to clarify their rights and duties where the notice is confusing or deficient. But even if we are prepared to assume that the administrative law judge was authorized to hear this matter in light of the Division's failure to follow the appropriate regulatory provisions, the record presently before us is not sufficient to support the Commission majority's assumption that employer/insurer simply ignored the notice. At the very least, we ought to remand this matter to explore the circumstances surrounding the issuance and receipt of the notice, and to give employer/insurer a chance to put on evidence that it had a good cause, in light of these circumstances, to fail to participate at the hearing.

Injury No.: 14-101759

Medical Fee Dispute No.: 14-01645

Employee: Wendell Goss

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I would vacate the administrative law judge's award and remand this matter to allow employer/insurer an opportunity to be heard on the merits of this dispute. Because a quorum of the Commission has determined otherwise, I respectfully dissent.

Reid K. Forrester, Member

Injury No.: 14-101759

Medical Fee Dispute No.: 14-01645

Employee: Wendell Goss

I join in the Commission majority's decision to deny an award of prejudgment interest to the medical provider in this case. I write separately, however, to make clear that I do not accept the general proposition that an award of prejudgment interest on medical expenses will always be prohibited by reason of the 2005 amendments.

As noted in our principal decision herein, the language of § 287.140 RSMo is silent regarding whether a medical provider may recover prejudgment interest on an application for payment of additional reimbursement of medical fees from an employer/insurer. Nor is there any case law authority recognizing a medical provider's right to an award of interest from the Commission in the context of such proceedings. For this reason, I agree that the Commission is not authorized to approve the award of interest in a case such as this.

However, these circumstances are distinguishable from cases in which an employee seeks prejudgment interest on an award of past medical expenses. In such cases, the courts have specifically and consistently recognized the applicability of the general interest statutes to authorize the Commission to enter an award of prejudgment interest. See *McCormack v. Stewart Enters.*, 956 S.W.2d 310 (Mo. App. 1997) and *State ex rel. Otte v. State Treasurer*, 182 S.W.3d 638 (Mo. App. 2005). It is well-settled in Missouri that "the legislature is presumed to be aware of the state of the law when it enacts a statute." *Nunn v. C.C. Mid W.*, 151 S.W.3d 388, 397 (Mo. App. 2004). Accordingly, we must presume that the legislature was aware, at the time it enacted the 2005 amendments, that the courts of this state routinely consulted the general interest statutes under § 408.020 RSMo to determine an employee's right to prejudgment interest on an award of past medical expenses.

If the legislature had intended to prohibit the Commission from applying § 408.020 and allowing awards of prejudgment interest to employees, it would have abrogated *McCormack* and its progeny in 2005, when it expressly abrogated a number of other prior decisions from the courts. See, e.g., § 287.020.10 RSMo. But the legislature did not do so. For this reason, I do not read the legislature's adoption of strict construction in 2005 to affect the continued applicability of *McCormack* in the context of such cases. To the contrary, where an employee seeks prejudgment interest on an award of past medical expenses, I believe we must continue to apply § 408.020 and the *McCormack* factors to such requests, until specifically directed otherwise by the legislature or the courts.

Because this case does not involve such a request, and because there is no statutory, regulatory, or case law authority allowing the Commission to approve an award of interest to a medical provider in a proceeding pursuant to § 287.140.4 RSMo, I concur in the majority's decision.

Curtis E. Chick, Jr., Member

Healthcare Provider: St. Luke's Hospital

Insurer:

Employee:

Hearing Date:

St. Luke's Hospital Fire Department

St. Louis Area Insurance Trust

C/O BCA, Inc. Administrators

Wendell Goss

July 25, 2017

MFD No.: 14-01645

Before the

Division of Workers' Compensation

Department of Labor and Industrial

Relations of Missouri

Jefferson City, Missouri

Checked by: JKO

On July 25, 2017, a Medical Fee Dispute evidentiary hearing was held at the Division of Workers' Compensation in St. Louis regarding the Application For Payment of Additional Reimbursement of Medical Fees filed by the Healthcare Provider, St. Luke's Hospital. The Healthcare Provider, St. Luke's Hospital, was represented at the hearing by its attorney, Mr. Nicholas G. Higgins. Employer, the City of Crestwood Fire Department, and its insurer, St. Louis Area Insurance Trust C/O BCA, Inc. Administrators, were not present or represented at the hearing, despite being duly notified of the evidentiary hearing by certified mail. The findings of fact and rulings of law are set forth below as follows:

The following exhibits were admitted into evidence:

1. Affidavit of Reasonableness of Medical Charges and Necessity of Medical Treatment from Healthcare Provider
2. Simple interest calculator printout
3. Affidavit of Attorney's Fees from Mr. Nicholas G. Higgins
4. Copies of Notices of Evidentiary Hearing for this Medical Fee Dispute sent to Employer and Insurer by certified mail, with certified mail receipts and USPS Tracking Results printout from usps.com

Nothing offered or admitted at the time of trial

Note: Some of the records submitted at hearing contain handwritten remarks or other marks on the Exhibits. All of these marks were on these records at the time they were admitted into evidence and no other marks have been added since their admission on July 25, 2017.

Issued by DIVISION OF WORKS S' COMPENSATION

Injury No. 14-101759

Based upon a review of the evidence in the record, I find:

1) According to the Affidavit of Reasonableness and Necessity filed by Healthcare Provider and the medical bill from St. Luke's Hospital (Exhibit 1), Wendell Goss received medical treatment, a brain MRI with and without contrast, at St. Luke's Hospital on March 20, 2015, due to injuries he sustained at work on November 28, 2014. Employer/Insurer was billed for these services in a timely fashion with an itemized billing statement.

2) The medical bill from St. Luke's Hospital (Exhibit 1) documents total charges for Employee's treatment on March 20, 2015 of $3,598.40. Healthcare Provider asserted in its affidavit that the charges for this treatment were reasonable at the time and place where the services were rendered, and the services were medically necessary to treat Wendell Goss for the work injury suffered by him on November 28, 2014.

3) The medical bill from Healthcare Provider (Exhibit 1) and the Application for Payment of Additional Reimbursement of Medical Fees filed by Healthcare Provider in this case confirms total payment toward the balance from Employer/Insurer of $1,195.08.

4) The medical bill from Healthcare Provider (Exhibit 1) shows that it was sent to Employer/Insurer on April 3, 2015 demanding full payment of the bill for these services. A partial payment was made by Employer/Insurer in this case on May 6, 2015. Healthcare Provider's attorney asserted at hearing that as of that date, when the full amount of the bill was not properly paid by Employer/Insurer, the balance became due and owing and was in dispute between the parties. Employer/Insurer apparently failed to make any further payments to resolve the amount in dispute.

5) On May 23, 2017, the Healthcare Provider, by and through their attorney, filed an Application For Payment of Additional Reimbursement of Medical Fees confirming that the Healthcare Provider charged a total of 3,598.40, and that the Insurer paid 1,195.08, leaving an unpaid balance in dispute of $2,403.32. The Missouri Division of Workers' Compensation mailed a copy of the Application to Employer and Insurer at their last known addresses on file at the Division on May 26, 2017.

6) On June 1, 2017, Healthcare Provider filed with the Missouri Division of Workers' Compensation an Application for Evidentiary Hearing in this Medical Fee Dispute proceeding. On or about June 30, 2017, Employer and Insurer were mailed notice by the Missouri Division of Workers' Compensation via certified mail of the evidentiary hearing herein scheduled for July 25, 2017 (Exhibit 4). Neither Employer nor Insurer filed any Answer to the Application for Payment of Additional Reimbursement of Medical Fees, nor an Answer to the Application for, or Notice of, Evidentiary Hearing. Employer/Insurer also failed to appear for the Hearing on July 25, 2017.

WC-32-R1 (b-81)

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Issued by DIVISION OF WORKS "S" COMPENSATION

Injury No. 14-101759

7) The Affidavit of Attorney's Fees (Exhibit 3) filed by Mr. Nicholas G. Higgins confirms that he expended three hours of time on this matter and that his usual and customary fee for service in this type of case is $250.00 per hour.

**RULINGS OF LAW:**

Based on a review of the evidence, as well as based on the applicable regulations and laws of the State of Missouri, I find the following:

The Healthcare Provider, St. Luke's Hospital, filed an Application For Payment of Additional Reimbursement of Medical Fees pursuant to Mo. Rev. Stat. § 287.140.4 and § 287.140.13 (5) (2014), to attempt to recover unpaid medical expenses totaling $2,403.32 for treatment they provided to Employee in connection with his work-related injury on November 28, 2014.

Mo. Rev. Stat. § 287.140.13 (5) (2014), provides in pertinent part that "If an employer or insurer fails to make payment for authorized services provided to the employee...[the] health care provider may proceed pursuant to subsection 4 of this section with a dispute against the employer or insurer for any fees or other charges for services provided." Mo. Rev. Stat. § 287.140.4 (2014) allows the Division of Workers' Compensation to establish methods to resolve disputes concerning the reasonableness of medical charges, and concerning the fees charged and whether or not they were paid.

The healthcare provider has the burden of proof regarding the reasonableness of the medical charges. When the healthcare provider presents testimony and evidence relating medical bills to an injury and places in evidence the accompanying medical records and bills, the healthcare provider has met its burden of proof on the reasonableness of the bills, and the burden then shifts to the employer or insurer to show that the medical bills were unreasonable or unfair. *Esquivel v. Day's Inn of Branson*, 959 S.W.2d 486 (Mo. App. S.D. 1998).

I find that Healthcare Provider in this case followed the procedure outlined in *Esquivel*, thus, establishing the reasonableness of the charges by admitting the affidavit and bills. Based on the evidence contained in Exhibit 1 and in the file, I further find that the medical bills were related to the injury at work on November 28, 2014, and the treatment was authorized by Employer/Insurer. The burden of proof, thus, shifted to Employer/Insurer to prove that the bills were unreasonable or unfair. Employer/Insurer did not appear at the hearing to present evidence, and failed to file an Answer to the Medical Fee Dispute Application. Therefore, I find that Employer/Insurer has failed to meet its burden of proof and has failed to show that the bills were unreasonable or unfair.

Accordingly, on the basis of the evidence in the record, I find Healthcare Provider's charges to be fair and reasonable. I find that Employer/Insurer made a partial payment toward those charges, leaving the amount of $2,403.32 unpaid. As the charges are fair and reasonable, and finding no other factual or legal basis for denying the charges, the City of

WC-32-R1 (6-81)

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Issued by DIVISION OF WORK AS' COMPENSATION

Injury No. 14-101759

Crestwood Fire Department (Employer) and/or St. Louis Area Insurance Trust C/O BCA, Inc. Administrators (Insurer) are ordered to pay St. Luke's Hospital the sum of $2,403.32.

Healthcare Provider has also requested that prejudgment (pre-award) interest be awarded in this case. Healthcare Provider requests payment of interest from the date of the partial payment, May 6, 2015, through the date of hearing, July 25, 2017, (811 days) at the statutory rate of nine percent per annum.

*McCormack v. Stewart Enterprises, Inc.*, 956 S.W.2d 310 (Mo. App. W.D. 1997) held that Mo. Rev. Stat. § 408.020 (the general interest statute) governs what interest, if any, should be awarded on medical expenses that are part of a Workers' Compensation award. By the same logic, § 408.020 also applies to a healthcare provider's claim against an employer or insurer for interest on unpaid medical bills under Chapter 287. *McCormack* states that three requirements must be met under § 408.020 to establish entitlement to prejudgment interest on medical expenses included in a Workers' Compensation award: (1) That the expenses were "due" at the time of demand; (2) that the amount due was readily ascertainable by computation; and (3) that the creditor must make a demand for payment of the amount due. "If a demand is made, the obligee is entitled to interest from the date of demand." *McCormack*, at 314, citing *Cotton v. 71 Highway Mini-Warehouse*, 614 S.W.2d 304, 308 (Mo. App. W.D. 1981).

In this case, I find that the amount due was readily ascertainable by simply reviewing the medical bills in evidence from Healthcare Provider. I also find that there is no question that Healthcare Provider made a demand for payment of the amount due and that the expenses were "due" at the time of the demand. In accordance with *McCormack*, I find that Healthcare Provider "suffered a loss by the delay in payment" by having to hire an attorney and pay legal costs to collect the unpaid amounts that had been demanded. Therefore, I find that Healthcare Provider has met the three-prong test from *McCormack* entitling it to prejudgment (pre-award) interest at the statutory amount of nine percent per annum from the date of the demand through the date of the hearing.

In the absence of any evidence from Employer/Insurer to suggest a different date, I find that the "date of the demand," for the purposes of calculating interest in this case, is May 6, 2015. I find that Healthcare Provider is entitled to receive an additional payment of interest at nine percent per annum for the unpaid medical expenses for the period of time of May 6, 2015 through July 25, 2017 (811 days). The City of Crestwood Fire Department (Employer) and/or St. Louis Area Insurance Trust C/O BCA, Inc. Administrators (Insurer) are ordered to pay St. Luke's Hospital the additional sum of $480.60 for interest through July 25, 2017.

Finally, Healthcare Provider seeks the recovery of attorney's costs and fees in this case under Mo. Rev. Stat. § 287.560 (2014) for Employer/Insurer's failure to defend this matter on any reasonable grounds. Mo. Rev. Stat. § 287.560 (2014), essentially states in pertinent part that, if the division or commission determines that any proceedings have been brought, prosecuted, or

WCO-32-R1 (8-81)

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Issued by DIVISION OF WORKS' COMPENSATION

Injury No. 14-101759

defended without reasonable grounds, the division may assess the whole cost of the proceedings upon the party who brought, prosecuted, or defended them.

Based on my review of the evidence and the file contents from the Division of Workers' Compensation file in this matter, I am hard-pressed to understand the complete lack of response from Employer or Insurer to the Medical Fee Dispute filed by Healthcare Provider. Employer and/or Insurer had opportunities during the pendency of this Medical Fee Dispute to either Answer or appear at a setting to provide some basis or explanation for their failure to pay the charges from Healthcare Provider in full. Yet, at no time, up through the hearing in this matter, did Employer/Insurer make any attempt to provide any explanation for their actions in this case.

Healthcare Provider filed the Application For Payment of Additional Reimbursement of Medical Fees on May 23, 2017, which was sent to Employer and Insurer on May 26, 2017, but there was no response or Answer from Employer/Insurer. Healthcare Provider filed an Application for Evidentiary Hearing on June 1, 2017, with copies being sent to Employer/Insurer, but there was, again, no response or Answer from Employer/Insurer. This Medical Fee Dispute was, then, set for Hearing on July 25, 2017 and notices were sent via certified mail to Employer/Insurer, yet, still no appearance by Employer/Insurer, nor anyone on their behalf. It is clear to me, from this record, that Employer/Insurer has either ignored or purposely refused to participate in this dispute process based on the notices and hearing setting that have gone unanswered or unattended. All the while, Healthcare Provider, via their attorney, has appeared and attempted to pursue this matter pursuant to the regulations and statutes of the State of Missouri.

With this history of Employer/Insurer ignoring applications and notices, failing to appear for the Hearing, and providing absolutely no indication of any reasonable defense for their failure to pay the medical charges in full for this injury, I find that Employer/Insurer defended this matter without reasonable grounds. In his affidavit, Healthcare Provider's attorney, Mr. Higgins, stated that he expended three hours of time on this case during its pendency. He also stated that the usual and customary rate for his services for this type of case is $250.00 per hour. Therefore, pursuant to Mo. Rev. Stat. §287.560, I find that Healthcare Provider is also entitled to collect the additional sum of $750.00 in attorney's costs and fees from Employer/Insurer for their failure to reasonably defend this Medical Fee Dispute. The City of Crestwood Fire Department (Employer) and/or St. Louis Area Insurance Trust C/O BCA, Inc. Administrators (Insurer) are ordered to pay St. Luke's Hospital/Mr. Nicholas G. Higgins the additional sum of $750.00 for attorney's costs and fees.

WC-32-R1 (6-81)

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Issued by DIVISION OF WOR ES' COMPENSATION

injury No. 14-101759

CONCLUSION:

St. Luke's Hospital has sustained its burden of proof on the Medical Fee Dispute that is the subject of this case. The City of Crestwood Fire Department (Employer) and/or St. Louis Area Insurance Trust C/O BCA, Inc. Administrators (Insurer) are ordered to pay St. Luke's Hospital the total sum of 3,633.92 (2,403.32 in medical expenses, 480.60 in interest and 750.00 in attorney's fees) pursuant to this award.

I certify that on 8/25/17 I delivered a copy of the foregoing award to the parties to the case. A complete record of the method of delivery and date of service upon each party is retained with the executed award in the Division's case file.

By

JOHN K. OTTENAD

Administrative Law Judge

Division of Workers' Compensation

WC-32-R1 (6-81)

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