James Holland v. Meramec Mechanical Inc.

Injury No.: 12-034177

Medical Fee Dispute No.: 12-01412

Employee: James Holland

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April 7, 2014, acknowledging the payment. The HCP did not file its medical fee dispute until October 26, 2015.¹

Which Statute Applies

"Generally, the date of injury for a workers' compensation claim is used to calculate the statute of limitations and determine which version of the workers' compensation law applies. The statute of limitations for filing a claim for workers' compensation benefits is controlled by the date of injury." *Hayden v. Cut-Zaven, Ltd.*, 614 S.W.3d 44, 61-62 (Mo. App. 2020).

However, a medical fee dispute claim is not a claim for workers' compensation, does not directly involve the employee, and is not controlled by the date of employee's injury. On the contrary, Section 287.140.4, RSMo, as effective on January 1, 2014, provides:

> 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.

The pertinent dates in this statute of limitations are the dates of service and the date of "the first notice of dispute of the medical charge [as] received by the health care provider[.]" In this matter, the date of service and the date of notice both occurred after January 1, 2014, when this version of the statute became effective. There is nothing in the statute instructing the Division or the Commission to apply the prior version of the Section 287.140.4, RSMo, to matters where the date of injury precedes January 1, 2014.

This interpretation appears to be upheld by the Missouri Court of Appeals in *Chesterfield Spine Ctr., LLC v. Best Buy Co., Inc.*, No. WD83757 (Jan. 12, 2021). The *Chesterfield Spine Ctr.*

¹ On page 3 of the award, the administrative law judge listed September 26, 2015, as the filing date of the medical fee dispute. However, this was a typographical error. The actual filing date was October 26, 2015. See *Transcript*, p. 25.

Injury No.: 12-034177

Medical Fee Dispute No.: 12-01412

Employee: James Holland

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LLC, matter also involved a medical fee dispute where the date of injury preceded January 1, 2014, but the dates of service and the date of first notice occurred after January 1, 2014. The administrative law judge applied the new law and held that the health care provider was time barred from its medical fee dispute. The health care provider appealed up to the court of appeals.

The court recited the health care provider's argument that

in Missouri, workers' compensation claims are governed by the law in effect when the injured employee's claim was filed. Because the one-year limitations period in § 287.140.4 was not in effect when the employee's underlying claim was filed (2013), the limitations period does not apply to the Application, and the Commission's finding to the contrary violates the constitutional prohibition on retrospective application of laws.

Id., at 19.

However, the court appeared to reject this argument by holding that the application of the new law was not retrospective because the dates of service came after January 1, 2014. The court stated,

Here, the only parties affected by the one-year statute of limitations are [the health care provider] and the Employer/Insurer, the transaction at issue was the provision of approved medical services in December 2015, and the one-year limitations period went into effect on January 1, 2014. This case does not involve the retrospective application of a statute.

Id. at 21-22.

Based on the above, we conclude that the administrative law judge's application of the version of § 287.140.4, RSMo, as effective on January 1, 2014, was proper.

**Conclusion**

We affirm the award of the administrative law judge as supplemented herein.

Employer/insurer is not liable to health care provider for additional reimbursement of medical fees.

The award and decision of Administrative Law Judge Lee B. Schaefer is attached and incorporated herein.

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Given at Jefferson City, State of Missouri, this **24th** day of March 2021.

**Robert W. Cornejo**, Chairman

**Reid K. Forrester**, Member

**Shalonn K. Curls**, Member

**Attest:**

**Secretary**

The parties appeared before the undersigned administrative law judge on October 19, 2020, for a Final Hearing in this matter. Attorneys Jack Spooner and Christopher Johnson represented Healthcare Provider, St. Louis Spine \& Orthopedic Surgery Center ("HCP"). Attorney Joshua Friel represented Meramec Mechanical, Inc. ("Employer"), and Secura Insurance ("Insurer'). The injured employee in the underlying Workers' Compensation case was James T. Holland, Sr. ("Claimant). The record was closed in this matter on October 26, 2020.

On or about May 8, 2012, while in the employment of Employer, Claimant sustained an injury arising out of and in the course and scope of his employment. The injury fell under the jurisdiction of the St. Louis office of the Missouri Division of Workers' Compensation. Employer/Insurer had notice of the injury and filed a Report of Injury. A Claim for Compensation was filed within the time required by law.

A Medical Fee Dispute ("MFD") arose during Claimant's medical treatment, and an Application for Payment of Additional Reimbursement of Medical Fees was filed by the HCP on October 26, 2015. An Answer to the Application for Payment of Additional Reimbursement of Medical Fees was filed on February 26, 2016, with subsequent Answers filed after that date.

An Application for Evidentiary Hearing was filed by HCP on January 19, 2016.

HCP offered and had admitted into evidence the following Exhibits:

Exhibit 1: Affidavit of Christine Frederick

Exhibit 1A: Business records of HCP

Exhibit 2: Stipulation between the parties

Exhibit 3: 8 CSR 50-2.030(1)(C) Proof of Service

Issued by DIVISION OF WORKERS' COMPENSATION

Injury No. 12-034177

Employer/Insurer offered and had admitted into evidence the following Exhibits:

- Exhibit A: Affidavit of Secura

- Exhibit B: Review Analysis of the medical bills

- Exhibit C: Check from Insurer to HCP

- Exhibit D: Letter from HCP to CompLogic Healthcare Systems dated April 7, 2014

The parties entered into a Stipulation of Facts, as contained in Exhibit 2, as follows:

1. The affirmative defense raised in this MFD is that the Application for Additional Payment of Medical Fees was not timely filed and, therefore, is time barred under Section 287.140.4 (2).
2. For purposes of this MFD Hearing only, $10,943.55 is the amount stipulated as the fair and reasonable fee.
3. An underlying Claim for Compensation was filed with the Division of Worker’s Compensation in this matter.
4. The Application for Payment of Additional Reimbursement of Medical Fees was filed with the Division of Workers’ Compensation on October 26, 2015, and delivered by HCP to Insurer in accordance with Chapter 287 RSMo.
5. The Application for Payment of Additional Reimbursement of Medical Fees is a demand on the Insurer to pay an additional $10,943.55.
6. To expedite the hearing, the parties agreed to forego live witness testimony at the hearing, and stipulate that certain documents are admissible.
7. The Affidavit of Christine Frederick (Exhibits 1 & 1A) is admitted into evidence and made part of this record.
8. The following Exhibits from Insurer are admitted and made part of this records: Affidavit of Secura (Exhibit A), Review Analysis (Exhibit B), Check (Exhibit C), and Letter from Employer (Exhibit D).

The issues to be determined in this Hearing are:

1. Did the HCP file its Application for Additional Reimbursement of Medical Bills within the limitations period under Section 287.140.4(2)?
2. Is the HCP entitled to payment under its Application for Additional Reimbursement of Medical Bills, including prejudgment interest?

Only evidence supporting the award will be summarized. Objections not ruled on during the hearing or in this award are overruled. Marks or highlights contained in the exhibits were made prior to being made part of this record and not placed thereon by the Administrative Law Judge.

Issued by DIVISION OF WORKERS' COMPENSATION

Injury No. 12-034177

Christine Frederick is an Employee of HCP. Frederick has been so employed from 2008 until the date of her Affidavit. HCP is an ambulatory surgical center that provides medical care for patients involved in work-related injuries. Frederick is HCP's "Administrator, CEO." Frederick is responsible for overseeing, and has day-to-day responsibility for, medical fee billing and collection for payment for patients injured in work-related accidents. Frederick is responsible for the care, upkeep, and maintenance of billing records as the Custodian of Records for TSC. Attached to Frederick's Affidavit are seven pages of records regarding the treatment provided to Claimant by TSC and other providers, as well as billing records for TSC. The records are kept within the normal course of business by TSC. (Exhibits 1 & 1A).

The attached bill for Claimant's left ankle surgery was provided to Employer/Insurer on September 25, 2014. Claimant suffered a left ankle injury that was treated arthroscopically with extensive debridement. Dr. Krause performed Claimant's surgery. HCP provided services in conjunction with Dr. Krause's treatment of Claimant. Employer/Insurer made partial payment on HCP's bill. For purposes of this MFD, $10,943.55 is still due and owing on the medical bill HCP proffered to Employer/Insurer.

On September 26, 2015, HCP filed its Application for Additional Reimbursement of Medical Bills. All of the amounts due and owing are for the treatment Claimant received for his work-related injury. (Exhibits 1, 1A & 3).

Employer/Insurer introduced the Affidavit of Matthew L. Schleis. (Exhibit A). Schleis is employed by Insurer as an Operations Supervisor. After receiving the bill from HCP for Claimant's treatment, Insurer prepared, or had prepared, a Review Analysis of HCP's bill. (Exhibit B). The Review Analysis informs HCP they are disputing its bill. The Review Analysis also contains an explanation to HCP of the basis for Insurer's dispute as to the charged amounts. The Review provides an e-mail address, phone number and fax number to be used to ask questions regarding the Review Analysis and to ask for reconsideration of the Review Analysis.

On or about March 10, 2014, Insurer mailed a partial payment check in the amount of $2,010.85 (Exhibit C), along with the Review Analysis, to HCP. That check was cashed or deposited by HCP on March 17, 2014. (Exhibit A).

On April 7, 2014, HCP sent a letter to Insurer/CompLogic Healthcare Systems indicating it understood that "benefits" were significantly reduced based on a determination that the charges exceeded the usual and customary charges for the geographic region where they were rendered. The letter noted that the Missouri Workers' Compensation Act does not employ a fee schedule. Further, HCP indicated it was its usual and customary practice to receive between 76 - 100% of the billed charges. The letter noted Insurer only paid 12% of the billed charges and requested an additional payment of $10,457.76 to resolve the bill. The letter informed Insurer that if they did not pay the additional amount, an MFD will be filed. In its letter, HCP emphatically states that the 12% previously paid would not be accepted as full payment of the bill. (Exhibit D).

Issued by DIVISION OF WORKERS' COMPENSATION

Injury No. 12-034177

**HCP did not file its Application for Additional Reimbursement of Medical Fees within the limitations period, therefore, HCP is not entitled to any further reimbursement.**

*(Addressing Issues 1 & 2)*

The first issue this court must decide is whether HCP's Application for Additional Reimbursement was timely filed. If it was not timely filed, the issue of additional reimbursement and payment of prejudgment interest is moot. If the Application was timely filed, the issue of additional reimbursement and prejudgment interest will then be discussed.

The statute of limitations for medical fee disputes is found in §287.140.4(2), RSMo (2014), and states as follows:

> 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: [...]

> (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.

Pursuant to 8 CSR 50-2.030(1)(A):

> If an employer or insurer disputes the reasonableness of a medical fee or charge, the employer or insurer shall notify the health care provider in writing that the medical charge is being disputed and shall explain the basis for the dispute.

Thus, the statutory and regulatory guidance is straightforward. Once an HCP is notified in writing of a dispute as to the reasonableness of a medical bill and the basis for that dispute, the HCP has one year to file its Application for Payment of Additional Reimbursement of Medical Fees.

The facts are not at issue; the parties stipulated to all of the relevant facts. The relevant facts are uncontroverted. Claimant received treatment from HCP on January 21, 2014. The Review Analysis and check were received by the HCP at the latest on March 17, 2014; when HCP deposited Insurer's partial payment check. In its letter dated April 7, 2014, HCP acknowledged receipt of the partial payment. (Exhibit D). HCP did not file its Application for Additional Reimbursement of Medical Fees until October 26, 2015; more than 19 months after receiving the Review Analysis and partial payment check.

The determinant question is whether the Review Analysis (Exhibit B) serves as a "notice of dispute" pursuant to 8 CSR 502.030(1)(A). In HCP's Affidavit (Exhibit 1), HCP states that the

Issued by DIVISION OF WORKERS' COMPENSATION

Injury No. 12-034177

Review Analysis did not notify HCP that the medical charge was being disputed by Employer/Insurer because "it is a customary document issued to HCP when treating a patient with insurance coverage to explain the benefits available." Further, HCP states the Review Analysis is "an indication of what a third party's [sic] believes is a recommended allowance..." HCP states the Review Analysis directs questions to a third party, and it is vague and subject to many interpretations. (Exhibit 1).

The rule promulgated by the Department of Labor and Industrial Relations/Division of Workers' Compensation has two requirements for a "notice of dispute." First, it must be in writing. Second, it must explain the basis of the dispute. 8 CSR 50-2.030(1)(A). The Review Analysis was in writing; it was introduced as an Exhibit. (Exhibit B). On the Review Analysis, it clearly states that the bills were being reduced and the reasons for those reductions. (Exhibit B). In addition, the Review Analysis was accompanied by a check from Insurer paying the reduced amount; making clear the amount Insurer was going to pay. (Exhibit C).

Even more compelling, in response to the Review Analysis, HCP sent a letter dated April 7, 2014, in which it disputes the reduction of the bill, asks to negotiate, and states an MFD will be filed if they do not receive the additional payment. (Exhibit D). All of which makes it abundantly clear that HCP was notified in writing of the dispute and knew the basis for the dispute; in essence, HCP acknowledged the dispute.

The Labor and Industrial Relations Commission has held that an "explanation of benefits" or "explanation of review", which are functionally the same as the Review Analysis in this case, was sufficient to constitute a notice of dispute. See *Employee: Deborah Rathgeber, Employer: Phelps County Regional Medical Center, Insurer: Liberty Mutual Fire Insurance Company, Health Care Provider: St. Louis Spine & Orthopedic Surgery Center, Injury No. 12-003925*, 2016 WL 3683340 (Lab. Ind. Rel. Com. 2018); *Employee: Brandon Sees, Employer: Best Buy Co., Inc., Insurer: XI Ins. Am., Inc. Health Care, Provider: Chesterfield Spine Ctr., LLC d/b/a St. Louis Spine & Orthopedic Surgery Ctr., No. 13-029338*, 2020 WL 1640282, at *1 (Mo. Lab. Ind. Rel. Com. Mar. 20, 2020) (appeal pending).

In this case, the Review Analysis received by HCP explained in writing that Insurer disputed the charges because multiple procedures performed at the same time had been billed at full price and the charges exceeded what was usual and customary. By sending this explanation in writing, Insurer met the requirements of 8 CSR 50-2.030(1)(A).

HCP alleges that Insurer was required to send the "notice of dispute" by certified mail. Under the statute, "[n]otice shall be presumed to occur no later than five business days after transmission by certified United States Mail." §287.140.4(2), RSMo (2014). The legislature sought to create a presumption regarding the receipt or timing of notice; it did not create a requirement regarding the manner of notice. See 8 CSR 50-2.030(1)(B)(5). On both occasions it has reviewed the issue, the Labor and Industrial Relations Commission has determined that a "notice of dispute" was not required to be sent by certified mail. See *Rathgeber* and *Sees*.

A presumption regarding when notice occurs is easily distinguishable from other provisions in the workers' compensation statute and regulations that specifically require service

by certified mail. The Commission has promulgated various regulations where the requirement for notice via certified mail is unequivocal. For example, 8 CSR 50-2.030 provides, "The health care provider shall serve through personal service or by certified mail, return receipt requested, a copy of the application on the person or corporation against whom the application has been filed." Another example reads, "Notice to the party or parties shall be sent by certified mail according to the provisions of Chapter 287, RSMo." 8 CSR 50-2.010. Unrelated to MFD, the legislature has required the use of certified mail, when an injured employee requests all statements regarding the accident and injury from the employer. The statute requires, "The request shall be directed to the employer or its insurer by certified mail." $\S 287.215$ RSMo (2014). As HCP does not cite any statute, regulation, or rule that requires a "notice of dispute" to be sent by certified mail, it cannot be held to be a requirement.

Since the "notice of a dispute" was not sent via certified mail, the Employer/Insurer cannot rely upon the presumption allowed in $\S 287.140 .4(2)$ to determine exactly when the Notice of dispute' was received. However, the check that was sent with the Review Analysis was deposited by HCP on March 17, 2014. (Exhibit B). Further, HCP sent a letter dated April 7, 2014, in which it made a demand for additional payment and informed Insurer that if an agreement could not be reached, it would forward the matter to its attorney. (Exhibit D). Despite the clear "notice of dispute", HCP filed its Application for Payment of Additional Reimbursement over nineteen months after receiving the Review Analysis; seven months past the statute of limitations date of March 17, 2015.

As the date of treatment in this case is after July 1, 2013, the one-year statute of limitations applies. HCP received the Review Analysis and was thereby aware of the dispute and the basis for that dispute by at least March 17, 2014. Further, HCP acknowledged receipt of the partial payment check and Review Analysis in its April 7, 2014 letter. Therefore, to timely file its Application for Payment of Additional Reimbursement, it had to be filed by March 17, 2015. Instead, the Application was not filed until October 26, 2015, over seven months after the statute had run. Accordingly, the HCP's Application for Payment of Additional Reimbursement is time-barred and is denied. The issues of additional payment to HCP and prejudgment interest will not be addressed as they are moot.


Made by: $\qquad$ Lee B Schaefer

Lee B. Schaefer

Administrative Law Judge

Division of Workers' Compensation