James Noel v. Mondelez International, Inc.

1 Employer/insurer specifically authorized the services involved in the charges. The employer/insurer’s adjuster, Heather Dupont, submitted an email to the HCP on August 11, 2014, and authorized the rotator cuff surgery on employee’s shoulder. There is nothing in the record to reflect that employer/insurer was later surprised at the amount the HCP charged for these authorized services.

Did the Division err in accepting the MFD Application? What is the appropriate remedy now?

Commission regulation 8 CSR 50-2.030(1)(B) provides:

(B) In order to initiate a reasonableness dispute case, the health care provider must first submit a Request for Case Status Information on a division-approved form to the division prior to the filing of an application for payment of additional reimbursement of medical fees. The health care provider shall file with the division an original application for payment of additional reimbursement of medical fees. The application shall contain all the following information:

1. The name, address, and telephone number of the health care provider;
2. Name, address, and telephone number of the employer and insurer against whom the application is being filed;
3. Name, address, and Social Security number of the employee for whom health care services were rendered, together with the date of injury and date the services were provided, for all disputes;
4. The amount in dispute;
5. The date the first notice of the dispute of the medical charge was received by the health care provider. Per section 287.140.4(2) RSMo, such notice shall be presumed to occur no later than five (5) business days after transmission by certified United States mail; and
6. Any additional information the division deems necessary to resolve the dispute.

Commission regulations 8 CSR 50-2.030(1)(D) and (F) provide:

(D) The application shall be filed on a form prescribed by the division and shall contain the required information. If the application does not include all the information required by this rule or proof of service is not filed with the division, the application will be rejected and will be returned for the additional information.

(F) Upon receipt of the application, the division will assign a medical fee dispute number and confirm acceptance or rejection of the application to the health care provider.

In this matter, the HCP did not state an actual date for the "date the first notice of the dispute of the medical charge was received by the health care provider." Instead, the HCP listed "TBD." Employer/insurer argues that such answer was insufficient. In its brief, employer/insurer argues that the HCP should have used the October 20, 2014 date as the notice date.

However, it appears that employer/insurer never sent an express notice of dispute to the HCP. Instead, employer/insurer sent two payments, one on October 28, 2014 and the second on March 16, 2015. Copies of these checks/payments are not in the record. Neither is there any indication in the record that such payments indicated that they were to be payments in full of

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employer/insurer's debt to the HCP. The parties stipulated that the HCP made other demands for payment, but with no apparent response from employer/insurer.

Accordingly, we find that the HCP's answer of TBD was more accurate than an actual date. The administrative law judge noted that for the purposes of establishing the timeliness of the MFD Application pursuant to § 287.140.4 RSMo, either date of payment suffices; the Application was filed on September 3, 2015, within the statute of limitations based off of either payment date.

Even if the Division erred in accepting the Application without a proper date, there is no provision for the Commission to dismiss the entire matter on this basis. On the contrary, the remedy pursuant to the regulation is to return the Application "for the additional information." In its brief, employer/insurer asserts that the notice was the date of its first payment. Accordingly, we have the additional information that would remedy the alleged error in the Application. We deny employer/insurer's first point.

What is the Meaning of "Receives" in § 287.140.3 RSMo?

Employer/insurer's second, third, and sixth points revolve around the meaning of the word "receives" in the statute.

Section 287.140.3 RSMo, provides:

1. All fees and charges under this chapter shall be fair and reasonable, shall be subject to regulation by the division or the commission, or the board of rehabilitation in rehabilitation cases. A health care provider shall not charge a fee for treatment and care which is governed by the provisions of this chapter greater than the usual and customary fee the provider receives for the same treatment or service when the payor for such treatment or service is a private individual or a private health insurance carrier. The division or the commission, or the board of rehabilitation in rehabilitation cases, shall also have jurisdiction to hear and determine all disputes as to such charges. A health care provider is bound by the determination upon the reasonableness of health care bills.

(Emphasis added).

Employer/insurer argues that the HCP usually and customarily "receives" or collects a lower amount for the same services after private insurers or private individuals negotiate the initially charged fee to that lower amount.

Employer/insurer further argues that the plain and unambiguous terms of § 287.140.3 RSMo, means that the HCP may not charge more for services "than the normal, ordinary, customary amount the HCP habitually has collected for the same services when the payor was a private individual or a private health insurance company." Employer/Insurer Brief, p. 25.

In support of its position, employer/insurer presented evidence allegedly from 1300 billings for the same services regarding other patients (without Medicare/Medicaid). The billing amounts are similar to those charged regarding employee, which amounted to $38,576.21. However, as alleged by employer/insurer, the amount collected from other patients for the same services averaged $9,792.23.

The administrative law judge disagreed with employer/insurer's argument and held that as long as the initial charge is the same across the board to all payors, then that initial charge constitutes "the usual and customary fee the provider receives for the same treatment or service[.]" We agree with the administrative law judge. We disagree that the word "receives" in the statute equates to the word "collects" as employer/insurer suggests.

Employer/insurer argues that this case is a matter of first impression. In the isolated context of an MFD, that argument might be accurate. However, Missouri courts have already addressed the Application of $\S 287.140 .3$ RSMo, in determining an employer/insurer's liability to pay medical bills for an employee's treatment in Workers' Compensation matters. The Missouri Supreme Court held that pursuant to $\S 287.140 .3$ RSMo, an employee should receive medical benefits for all work-injury-related medical bills for which employee is liable.

The fee or charge is the amount the healthcare provider actually requires the employee to pay, initially or thereafter, for the service provided. Write-offs and adjustments that extinguish the liability of an injured employee ... are not "fees and charges", but simply reductions thereof. Thus, Ms. Farmer-Cummings' fees and charges include only those amounts that must be paid for her healthcare for which she would otherwise be liable.

Farmer-Cummings v. Pers. Pool of Platte Cty., 110 S.W.3d 818, 821-22 (Mo. 2003).

In light of the Farmer-Cummings decision, a charge is the amount that the HCP "actually requires the employee to pay, initially or thereafter, for the service provided" and constitutes employee's liability, or employer/insurer's liability.

Any reduction in that initial customary charge for other patients or payors does not diminish employee's liability. Similarly, here, employer/insurer's liability to the HCP should not lessen merely because other entities negotiated a reduction in fees. If employer/insurer negotiated a lesser amount with the HCP, then that would be different. Otherwise, the actual liability of employee appears to be the charged amount, which is the standard charge for everybody.

However, an employer/insurer may establish that the particular employee no longer has a liability, which would allow employer/insurer to reduce its medical benefits to avoid a windfall for employee. The Supreme Court held, "if [employer/insurer] establishes by a preponderance of the evidence that the healthcare providers allowed write-offs and reductions for their own purposes and [employee] is not legally subject to further liability, she is not entitled to any windfall recovery." Farmer-Cummings, 110 S.W.3d 818 at 821. Accordingly, in this matter, employer/insurer would also not be required to pay the HCP more than employee's liability.

Here, employer/insurer has not established that employee is not liable for the amounts the HCP seeks. On the contrary, the documentation in the record establishes that employee is still liable for the services the HCP rendered. As part of the preliminary paperwork for the medical treatment, on September 24, 2014, employee signed a financial agreement, which provided, "I certify that I am the patient or that I am financially responsible for the services rendered and do hereby unconditionally guarantee the payment of all amounts when and as due." Tr., p. 59. employee also signed an Ambulatory Surgery Center Lien that placed a lien on "all proceeds of the settlement, judgement, or verdict which may be paid" to employee or to employee's attorney in the WC matter. Tr., p. 71.

We find that there is no evidence that employee is not still liable for the money the HCP seeks from employer/insurer. ${ }^{2}$

We deny employer/insurer's points two, three, and six.

Employer/insurer's points four and five relate to whether the HCP's charges were fair and reasonable. In these points, employer/insurer argues that the charge was not reasonable when calculated at a per-minute charge for services or when comparing the HCP's charge for implants against what the HCP's supplier charged the HCP for the same implants.

Case law regarding MFDs establishes that "where a health care provider presents testimony and evidence relating medical bills to an injury and places in evidence the accompanying medical bills and records, the burden of going forward with the evidence shifts to the employer or insurance carrier to prove that such medical bills were unreasonable and unfair." Esquivel v. Day's Inn, 959 S.W.2d 486, 489 (Mo. App. 1998) (overruled on other grounds by Hampton v. Big Boy Steel Erection, 121 S.W.3d 220 (Mo. 2003)) (Inner citations omitted).

Here, there is no dispute that the HCP presented sufficient evidence relating the medical bills to the injury. The parties stipulated the admissibility of these records in the hearing. The HCP asserts that it charged the same for any person receiving the same services. Employer/insurer also does not dispute this point in its application for review, but argues that the per minute charge for services was unreasonable or that the HCP unfairly "marked up" the cost of implants to employee, as opposed to what the HCP paid its supplier.

Employer/insurer's arguments take the HCP's charges out of context. There is no evidence that the HCP's billing practices were any different than other providers of similar services or that the HCP's charges were unfair or unreasonable in comparison to market values for the same products and services.

Employer/insurer failed to meet its burden to establish that the HCP's charges were unfair or unreasonable. We deny employer/insurer's points four and five.

The HCP provider seeks pre-judgment interest on the unpaid medical fees at issue in this matter. The HCP acknowledges in its brief that the controlling statutory and regulatory provisions for MFD matters do not contain express authority for this Commission to award prejudgment interest to a health care provider.

The HCP argues that in the absence of express language to the contrary, the Commission must apply the statutory provisions of $\S 287.408$ RSMo, to MFD matters in order "to encourage settlement and avoid delay." HCP's Reply Brief, p. 7.

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[^0]: ${ }^{2}$ We take administrative notice of Division records that on June 15, 2016, employer/insurer and employee entered into a Stipulation for Compromise Settlement that resolved all issues related to employee's left shoulder, including payment for medical expenses. In that settlement, employer/insurer and employee agreed that employer/insurer already paid $\ 73,380.08 in medical expenses to treat employee's condition. It is unclear from the record whether the $\ 73,380.08 amount includes any part of the disputed $\ 30,286.69 at issue in this matter. Without further explanation, there is a possibility that employer/insurer may have already asserted to an administrative law judge that it had paid part of the amount it now disputes.

We disagree. This Commission continues to follow the holding in Harrah v. Tour St. Louis, 415 S.W.3d 779 (Mo. App. 2013), in which the court distinguished prior precedent and denied an employee's request for pre-judgment 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 pre-judgment interest in that context, the court provided the following comments:

[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 prejudgment 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 pre-judgment interest, it would have expressed its intentions in plain and unambiguous terms.

Id. at 782 .

Similarly, the plain language of $\S 287.140 .4$ RSMo also makes no provision for an award of interest against an employer/insurer in the context of an MFD matter. The strict construction mandate of $\S 287.800 .1 \mathrm{RSMo}^{3}$ does not allow this Commission to go beyond the language of the applicable statute to infer authority to award pre-judgment interest without express statutory language. Accordingly, we deny the HCP's argument.

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

The award and decision of Administrative Law Judge Lee B. Schaefer is attached and incorporated herein to the extent not inconsistent with this supplemental decision.

Given at Jefferson City, State of Missouri, this $\qquad 9th \qquad$ day of June 2021.

LABOR AND INDUSTRIAL RELATIONS COMMISSION


Attest:


Robert W. Cornëjo, Chairman


Reid K. Forrester, Member


Shalonn K. Curls, Member

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[^0]: 3 "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.

The parties appeared before the undersigned administrative law judge on September 21, 2020, for a Final Hearing in this matter. Attorneys Jack Spooner and Christopher Johnson represented Healthcare Provider, Surgery Center Partners, LLC d/b/a Timberlake Surgery Center ("TSC"). Attorney Michael Schaller represented Mondelez International, Inc. ("Employer"), and Indemnity Insurance Company of America c/o ESIS c/o Conduent ("Insurer'). The record was closed in this matter on October 19, 2020.

On July 12, 2013, while in the course and scope of his employment, Claimant sustained an injury arising out of and in the course and scope of his employment. The injury occurred in St. Louis. The Employer/Insurer had notice of the injury and the Claim for Compensation was filed within the time prescribed 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 TSC on September 3, 2015. An Answer to the Application for Payment of Additional Reimbursement of Medical Fees was filed on August 15, 2016. An Application for Evidentiary Hearing was filed by TSC on July 18, 2016.

TSC offered and had admitted into evidence the following Exhibits:

Exhibit 1: Affidavit of Tiffany Clarkson

Exhibit 1A: Medical records regarding treatment of Claimant

Exhibit 2: Stipulation between the parties

Exhibit 3: 8 CSR 50-3.030(1)(C) Proof of Service

Exhibit 4: Employer/Insurer Exhibit B: Cross-Reference

Exhibit 5: Employer/Insurer Exhibit B: Workers' Compensation (redacted)

Exhibit 6: Employer/Insurer Exhibit B: Workers' Compensation (un-redacted)

Exhibit 7: Employer/Insurer Exhibit B: Non-Workers' Compensation

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

The parties entered into Stipulation of Facts as contained in Exhibits 2 and F, as follows:

1. Employer/Insurer’s Exhibit B is an accurate billing and payment records from TSC for September 24, 2014 through March 23, 2015, reflecting the charges to and payments from private individuals, private health carriers, and Medicare for the same treatment rendered to Claimant.
2. The CPT code 23412 refers to "Repair of ruptured musculotendi", for which Employer/Insurer was billed $\ 10,209.79 and paid $\ 3,147.34.
3. The CPT code 23430 refers to "Tenodesis on the long tendon of the Bi", for which Employer/Insurer was billed $\ 8,467.63 and paid $\ 1,817.21.
4. The CPT code 29822 refers to "Arthroscopy, shoulder debridme", for which Employer/Insurer was billed $\ 8,188.62 and paid $\ 1,625.40.
5. The CPT 29826 refers to "Arthroscopy, shoulder decompress", for which Employer/Insurer was billed $\ 9,052.14 and paid $\ 1,385.37.
6. The CPT code 644159 refers to Injection, anesthetic agent, brachi", for which Employer/Insurer was billed $\ 2,658.03 and paid $\ 543.80.

The issues to be determined in this Hearing are:

1. Are the medical bills submitted for this medical fee dispute fair and reasonable and entitled to payment?

Issued by DIVISION OF WORKERS' COMPENSATION

Injury No. 13-049214

1. Is TSC entitled to prejudgment interest?

1. Is TSC entitled to attorneys' fees and costs?

1. Does the Division of Workers' Compensation have jurisdiction to hear this matter because TSC allegedly failed to make all of the required allegations in its MFD petition?

1. Did TSC charge the Employer/Insurer more than they were allowed under Section 287.140.3?

1. What additional compensation, if any, is the TSC entitled to receive?

1. Is the Employer/Insurer entitled to attorneys' fees and costs?

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.

FINDINGS OF FACT

Tiffany Clark is an employee of TSC. TSC is an ambulatory surgical center that provides medical care for patients involved in work-related injuries. Clark is TSC's Business Office Manager and supervises the billing and collections of payment for patients injured in work-related accidents. Clark is also the Custodian of Records for TSC. Attached to Clark's Affidavit is 54 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 shoulder surgery was provided to Employer/Insurer on September 25, 2014. The total bill from TSC was 38,986.21. TSC maintains that 38,986.21 is the usual and customary and fair and reasonable charges for the services provided. This is the same fee charged to all Missouri workers' compensation patients regardless of whether the fee is charged to private insurance, Medicare, the patient, a guarantor, an employer, or an insurance company. TSC allows write offs and reductions of its bills when treatment and services are provided to injured workers under the Missouri Workers' Compensation Act. (Exhibits 1 & 1A).

On October 28, 2014, Employer/Insurer paid $5,552.18 to TSC. On March 16, 2015, Employer/Insurer paid 3,147.24 to TSC. Therefore, TSC is still owed 30,286.69. Payment is still due and owing and has been demanded from Employer/Insurer by TSC. (Exhibits 1 & 1A).

Claimant underwent surgery on his left shoulder at TSC on September 24, 2014. Dr. Rotman performed a left shoulder arthroscopy, limited debridement, subacromial

Issued by DIVISION OF WORKERS' COMPENSATION

Injury No. 13-049214

decompression, biceps tenodesis, and repaired 80 to 90% of a dime to nickel sized surface rotator cuff tear. (Exhibit 1A).

TSC filed its Application for Reimbursement of Additional Medical fees with the Division of Workers' Compensation on September 1, 2015. Copies of that Application were sent by Certified Mail to Employer and Insurer. TSC received signed Certified Mail Receipts from both Employer and Insurer. (Exhibits 3 & A). Employer/Insurer filed an Answer to the Application for Reimbursement of Additional Medical Fees on August 15, 2016. (Exhibit E).

TSC filed Healthcare Provider's Objections to EI Exhibit B/or Motion in Limine to Exclude EI Exhibit B. (Exhibit 9). Employer/Insurer filed a Response to Healthcare Provider's Objection to EI Exhibit B /or Motion in Limine to Exclude EI Exhibit B. (Exhibit H).

HCP filed a Motion for Costs of the Proceedings against Employer/Insurer. (Exhibit 8 & 8A). Employer/Insurer filed a Motion for Costs and Attorney's Fees (Exhibit I). HCP filed a Response to Employer/Insurer's Motion for Costs and Attorney's Fees. (Exhibit 10). Employer/Insurer filed a Response to HCP's Motion for Costs of Proceedings. (Exhibit G).

FINDINGS OF FACT AND CONCLUSIONS OF LAW

The Division of Workers' Compensation has Jurisdiction to hear this Matter even though TSC failed to make all of the Required Allegations in its MFD Petition.

(Addressing Issue Number 4)

Employer/Insurer argue that the Division of Workers' Compensation lacks jurisdiction to hold a Hearing on TSC's Application for Payment of Additional Reimbursement of Medical Fees because the Application, as filed, was deficient, and should never have been accepted by the Division. Employer/Insurer argue that since TSC did not include the date that it first received notice of the dispute in its Application, as mandated by the regulations, the Division should have rejected the Application. They argue that since the Division incorrectly accepted the Application, the Division has no jurisdiction to hear this Medical Fee Dispute, and it must be denied.

In its response, TSC concedes that it did not include the date that it first received notice of the dispute in its Application. The inclusion of the date the healthcare provider first received notice of the dispute is only relevant to determine whether the Application was timely filed under the statute. In the present case, there is no question that the Application was timely filed, therefore the need for the date of notice of dispute is irrelevant and moot.

In Cox Health Systems v. Division of Workers' Compensation, 190 S.W.3d 623 (Mo. App. W.D. 2006), the Court held that the Division has a ministerial duty to process and adjudicate Medical Fee Disputes. Further, any regulations promulgated by the Division must have a rational relationship to a legitimate state interest. TSC argues that, in the case at bar, the information requested is unnecessary therefore making the rejection of an Application.

Issued by DIVISION OF WORKERS' COMPENSATION

Injury No. 13-049214

unnecessary. Further, TSC asserts that the Division does have jurisdiction over this Medical Fee Dispute, as it provided sufficient information to allow the Application to be processed and for all parties and the Division to be aware of the nature of the claim and to receive sufficient notice.

At its core, Employer/Insurer's main argument is that the Division lacks jurisdiction to hear this Medical Fee Dispute based on the incomplete Application filed by TSC. They essentially assert that the Division only gains jurisdiction to hear this, or any other Medical Fee Dispute, if the Application contains all of the information required by the regulations. That interpretation is incorrect.

Section § 287.140.4 RSMo (2014) allows for the Division to establish regulations "to resolve disputes concerning the reasonableness of medical charges, services or aids," and Section 287.140.3 RSMo (2014) provides that, "All fees and charges under this chapter...shall be subject to regulation by the division or the commission..." Section 287.140.3 RSMo (2014) continues:

> The division or the commission, or the board of rehabilitation in rehabilitation cases, shall also have jurisdiction to hear and determine all disputes as to such charges. A health care provider is bound by the determination upon the reasonableness of health care bills.

Therefore, I find that it is not the filing of a completed Application pursuant to the regulations that confers jurisdiction, but rather it is the assessment of, and payment for, fees and charges under this chapter (the Workers' Compensation statute) that confers jurisdiction to the Division and makes those fees and charges subject to regulation by the Division.

In the case at bar, I find no dispute that Claimant received treatment under the Workers' Compensation Act for a work injury. TSC assessed fees and charges for that treatment. Employer/Insurer admittedly made payments under the Act toward the fees and charges from TSC. I find the Division gained jurisdiction to address any disputes over those medical fees and charges when the fees and charges were assessed to Employer/Insurer under the Workers' Compensation Act for this work injury. Further, by making payments toward the charges from TSC, Employer/Insurer brought themselves under the jurisdiction of the Division. Despite whatever information may or may not be contained in the Application that gave rise to this Medical Fee Dispute proceeding, the Division has jurisdiction to hear and resolve disputes over these medical fees and charges by virtue of their assessment, and partial payment, for treatment of an injury handled under the Workers' Compensation Act.

Having found the Division has jurisdiction to hear this dispute, the question becomes if it is appropriate, under the statutes and regulations, to allow TSC to proceed with this Medical Fee Dispute filing, when it admittedly did not submit a completely filled out Application pursuant to the regulations that have been established to govern the handling of Medical Fee Disputes.

Employer/Insurer correctly states the applicable regulations and the requirements contained therein, namely, that under Mo. Code Regs. 8 CSR 50-2.030(1)(B), among other things, the Application filed by Healthcare Provider shall contain the date the first notice of

Issued by DIVISION OF WORKERS' COMPENSATION

Injury No. 13-049214

dispute was received by the healthcare provider. Further, Employer/Insurer correctly states that under Mo. Code Regs. 8 CSR 50-2.030(1)(D), "If the application does not include all the information required by this rule...the application will be rejected and will be returned for the additional information."

Having already determined that the Division has jurisdiction to hear this dispute, the question presented is: Having submitted an incomplete Application, and having had that Application accepted by the Division, is TSC entitled to proceed with a Medical Fee Dispute Hearing?

In *Cox*, 190 S.W.3d 623 (Mo. App. W.D. 2006), the Division of Workers' Compensation appealed a writ of mandamus ordering it accept and process medical fee dispute applications, when it originally rejected them for various reasons (the underlying case being settled or dismissed, the underlying case being closed, or the statute of limitations having run on the underlying case). *Cox*, 190 S.W.3d at 624-626. The Division rejected the applications without a hearing or notice to Cox, but argued that the regulations "serve as notice to health care providers that medical fee disputes will not be accepted by the Division after the underlying workers' compensation case is closed." *Cox*, 190 S.W.3d 628.

The *Cox* Court examined Section 287.140 and the medical fee dispute regulations contained in Mo. Code Regs. 8 CSR 50-2.030 in reaching its conclusion. It identified the test for whether an administrative agency rule is reasonable, as whether the regulation bears a rational relationship to a legitimate state interest. *Cox*, 190 S.W.3d at 629. The Court noted that by dismissing the medical fee applications, Cox was faced with a deprivation of property, without notice or an opportunity to be heard as due process requires, leaving Cox with no recourse, due to circumstances beyond its control. The Court ruled that "the Division has a statutory duty to permit the filing of the medical fee dispute applications at issue in this case..." and may not reject the applications on the grounds they were rejected in this matter. *Cox*, 190 S.W.3d at 629-630.

While the reasons for rejecting (or potentially rejecting) the applications, as well as the specific regulations at issue, are different in *Cox* and the present case, the fundamental message from that case is just as applicable here. At its core, I find that *Cox* stands for the proposition that medical fee dispute applications should not be rejected, and healthcare providers be deprived of their rights, without notice and an opportunity to be heard (have a hearing).

Whether the Division rightly or wrongly accepted the Application at issue in this case, the reality is that it was accepted and assigned a Medical Fee Dispute number by the Division. Therefore, consistent with the *Cox* decision, I find that TSC is entitled to a hearing on the merits of its Medical Fee Dispute Application.

Issued by DIVISION OF WORKERS' COMPENSATION

Injury No. 13-049214

The medical bills submitted for this medical fee dispute are fair and reasonable, and not more than TSC was allowed to charge Employer/Insurer under Section 287.140.3, therefore, TSC is entitled to payment.

(Addressing Issues 1 & 5)

Employer/Insurer argues that TSC's charges are not fair and reasonable and that TSC charges Employer/Insurer more than it was allowed under Section 287.140.3 RSMo (2014). To make this determination, Employer/Insurer asks this court to conduct a detailed examination of all of the billing by TSC for similar procedures as those performed on Claimant. Under the statute, the court is to determine whether TSC charged this Employer/Insurer more than the usual and customary fee charged to private individuals or private health insurance carriers. (Notably, the statute does require a comparison of the fees and charges to the usual and customary fees charged to other Workers' Compensation insurance carriers.)

Employer/Insurer performed an admittedly detailed study of all of the CPT codes for the surgery performed on Claimant. For each CPT code, TSC charged everyone the same amount. However, the amount of the fees or charges that were paid (which Employer/Insurer reduces to a percentage) varies greatly between different insurance carriers, and between private health insurance and workers' compensation carriers. In other words, the amount billed was always the same, the amount received was not. Employer/Insurer argues they should pay no more than the other payors.

The sentence in Section 287.140.3 RSMo (2014), around which this dispute revolves, reads as follows:

> A health care provider shall not charge a fee greater than the usual and customary fee the provider receives for the same treatment or service when the payor for such service is a private individual or private health care insurance carrier.

>

> It is agreed that HCP charges the same fee to every payor for each CPT code, however, the payment they receive is adjusted based on the agreements with each individual payor. Employer/Insurer reads "fee the provider receives" as meaning the final payment proffered by the payor to extinguish its obligation. However, the statute does not use the word "payment", so, what is meant by the "the fee received"?

One of the first principles of statutory construction is that one must ascertain the intent of the legislature from the language used and give effect to that language. *Richard v. Missouri Department of Corrections & Missouri Department of Natural Resources*, 162 S.W.3d 35, 39-40 (Mo.App 2005). Missouri Workers' Compensation Law "is entirely a creature of statute." *Simpson v. Saunchegrow Constr.*, 965 S.W.2d 899, 903 (Mo.App.1998), *overruled on other grounds by Hampton v. Big Boy Steel Erection*, 121 S.W.3d 220, 226 (Mo. banc 2003). When the words used are ambiguous, the primary rule of statutory construction is to ascertain the intent

Issued by DIVISION OF WORKERS' COMPENSATION

Injury No. 13-049214

of the legislature from the language used and to give effect to that intent if possible. *Cook v. Newman*, 142 S.W.3d 880, 886 (Mo.App.2004).

Employer/Insurer argues that Section 287.140.3 serves to limit what health care providers can receive in payment for services rendered to an injured employee. Thus, Missouri would then be a state with a fee schedule for treatment of injured workers, with every healthcare provider billing and receiving the same amount for the same treatment. But, Employer/Insurer concedes Missouri does not have a fee schedule, so that cannot be the correct analysis.

There is a missing step in Employer/Insurer' argument when one considers what occurs when a medical bill is presented for payment it is apparent. When TSC, or any healthcare provider, sets a fee for a particular service or CPT code, it is the fee they bill/charge for that service. The statute requires that fee to be the same for an injured worker treating under the statute as it is for a private individual or private health insurance carrier. In other words, healthcare providers are not allowed to charge more because a patient is an injured worker receiving treatment under the statute.

After the treatment is rendered, the healthcare provider sends a bill for the fee it receives for whatever procedure was performed. Then, the payor (an individual or private health insurance carrier) applies whatever contractual agreement it has with the healthcare provider and pays that amount. An individual payor might negotiate a lesser amount than the full fee the healthcare provider receives. A private insurance carrier would likely have a contractual agreement regarding the amount, or percentage of the bill to be paid. (As is evident from Employer/Insurer's hard work, that amount varies among different private insurance companies.) Thus, the fee the healthcare receives is better called the fee the healthcare provider bills.

In all of the data provided, there is no evidence regarding the agreements or contracts particular private insurers have with TSC. Nor is there any evidence of why private payors might have paid less than the total bill for their treatment. The missing step for the Employer/Insurer's analysis is what occurred after the "fee the provider receives" was sent to them. I do not know if this Employer/Insurer had an agreement with TSC to pay a reduced amount; no such agreement was introduced into evidence. I also do not know if the Employer/Insurer tried to negotiate lesser payment; no such evidence was introduced. The evidence is that Employer/Insurer was billed the same amount, for the same procedures, by TSC as were private individuals and private health insurance companies.

In essence, this Employer/Insurer is trying to get the benefit of whatever contracts/agreements the private individuals and private insurance companies had with TSC without negotiating a contract or reaching an agreement regarding the amount to be paid. It is evident from the numbers reviewed and collated by Employer/Insurer that different private health insurance companies have different contracts or agreements, with some paying substantially more than others. The fee TSC receives for each service is the same, the payment varies depending on its contract or agreement with the payor.

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Issued by DIVISION OF WORKERS' COMPENSATION

Injury No. 13-049214

Esquivel v. Days Inn of Branson, 959 S.W.2d 486 (Mo.App. 1998) provides helpful guidance in this matter. In Esquival, a healthcare provider was attempting to recover the difference between the amount billed and the amount paid by the workers' compensation carrier. The Court of Appeals relied on two cases for guidance on the determining "reasonableness" of bills. In Martin v. Mid-America Farm Lines, Inc., 769 S.W.2d 105 (Mo. banc 1989), the Supreme Court found that for medical bills to be reasonable, the charges have to be fair and reasonable for the similar treatment of a similarly injured person. Martin, 769 S.W.2d at 111. In Metcalf v. Castle Studios, 946 S.W.2d 282 (Mo.App. 1997), the employer challenged the reasonableness and fairness of the employee's medical bills related to an injury compensable under the Workers' Compensation Law. Metcalf, 946 S.W.2d at 287. The court determined that the Claimant's testimony about the treatment she received, and the introduction of her medical bills, was sufficient because the employer made no showing that the employee's medical bills were not fair and reasonable. Id.

The difference between Martin and Metcalf, and Esquivel and the present case, is that in Martin and Metcalf the injured worker was seeking to be reimbursed for medical bills, and in Esquivel and the present case it is the healthcare provider that is seeking payment. However, the Esquivel court found that distinction to be "immaterial". Esquivel, 959 S.W.2d at 488. Esquivel noted that because Section 287.140 expressly governs medical fee disputes it does not matter whether it is the employee or health care provider seeking reimbursement. The Court noted 8 CSR 50-2.030(18) states that "[t]he health care provider shall have all rights accorded a party under Chapter 287, RSMo." (emphasis added); thus putting an injured employee and a healthcare provider in the same position. Esquivel, 959 S.W.2d at 488-489.

Nothing in any of these cases require this court to look at payments received by the healthcare provider. The focus is solely the reasonableness of the charge. As TSC charged private individuals and private health insurance carriers the same amount as Employer/Insurer, Employer/Insurer is attempting to get the benefit of contracts or agreements to which they are not a party. Rather than negotiating with TSC regarding the amount they will pay, Employer/Insurer is trying to piggyback onto contracts, negotiation, and write-offs given to other payors. In Missouri, third parties have no right to enforce or benefit from contracts to which they are not a party or an intended beneficiary. Verni v. Cleveland Chiropractic College, 212 S.W.3d 150, 153 (Mo. banc 2007).

Therefore, Employer/Insurer's arguments must fail. TSC's fees and charges are fair and reasonable and permissible under the statute.

TSC's Motion in Limine is Moot based in the Ruling in this Matter

TSC filed a Motion in Limine to exclude Exhibit B (Exhibit 9 & 9A) to which Employer/Insurer filed a Response. (Exhibit H). TSC alleges Exhibit B is immaterial and irrelevant. Further, TSC argues that using Exhibit B to determine whether its fees were fair and reasonable is speculative and lacks foundation. However, I find the admission of Exhibit B was necessary for this court to understand the argument made by Employer/Insurer. However,

Issued by DIVISION OF WORKERS' COMPENSATION

Injury No. 13-049214

because this court did not rely on Exhibit B in rendering this opinion, there is no harm to TSC by the admission of this information.

(Addressing Issues 2 & 6)

TSC is entitled to its remaining fee of $30,057.09. TSC has also requested prejudgment interest in this matter. TSC argues it is entitled to prejudgment interest under Section 408.020 which reads as follows:

Creditors shall be allowed to receive interest at the rate of nine percent per annum, when no other rate is agreed upon, for all moneys after they become due and payable, on written contracts, and on accounts after they become due and demand of payment is made; for money recovered for the use of another, and retained without the owner's knowledge of the receipt, and for all other money due or to become due for the forbearance of payment whereof an express promise to pay interest has been made.

In its Trial Brief, Employer/Insurer states that the Labor and Industrial Relations Commission previously found that prejudgment interest was not available to a healthcare provider in medical fee disputes. However, Employer/Insurer does not cite to that opinion and this court could not locate that decision.

TSC relies on *Children Intern. v. Ammon Painting Co.*, 215 S.W.2d 194 (Mo.App 2006) to support its claim for prejudgment interest. Prejudgment interest awards are not discretionary, interest must be awarded if the amount owed is liquidated or readily ascertainable. *Children Intern.* 215 S.W.2d at 202-203. However, the equitable principles of fairness and justice are to be employed when awarding prejudgment interest. *Id.*; *Catron v. Columbia Mut. Ins. Co.*, 723 S.W.2d 5, 7 (Mo. banc 1987). Statutory prejudgment interest is intended to fully compensate plaintiffs for the time-value of money and promote the settlement of lawsuits. *Id.*

In the present case, I do not find TSC is entitled to prejudgment interest. Employer/Insurer raised affirmative defenses that have not been previously raised or decided. Thus, I find that prejudgment interest is not warranted as a means of encouraging settlement in a matter with defenses that are novel, unsettled, and have never faced judicial scrutiny.

(Addressing Issues 3 & 7)

Both parties seek to recover the costs and fees of these proceedings. In TSC's Motion for Costs of Proceedings (Exhibits 8 & 8A) it alleges entitlement to the costs of these proceedings because Employer/Insurer allegedly pursued its affirmative defenses without reasonable grounds. Employer/Insurer, in its Response to TSC's Motion for Costs of Proceedings (Exhibit G) argues

Issued by DIVISION OF WORKERS' COMPENSATION

Injury No. 13-049214

TSC is not entitled to recover because the statute on which it relies only related to unreasonable termination of benefits by the employer to an employee. Therefore, it is not relevant in this matter.

Employer/Insurer filed its Motion for Costs and Attorney's Fees pursuant to Section 287.560. (Exhibit I). Employer/Insurer alleges they are entitled to costs and attorney's fees because HCP's Application for Payment of Additional Reimbursement of Medical Fees was deficient and that TSC was requesting payment of more fees than it was entitled to. In essence, Employer/Insurer is re-litigating its defenses in its Request for Attorney's Fees and Costs. TSC, in its Response to Employer/Insurer's Motion for Costs and Expenses (Exhibit 10) argues TSC had reasonable grounds to proceed to hearing on its Application for Payment of Additional Reimbursement of Medical Fees.

I find that neither party is entitled to the costs of these proceedings. First, I would note TSC filed an Amendment by Interlineation to its Motion (Exhibit 8A) clarifying that it is seeking costs under Section 287.560 RSMo (2014). Under Section 287.560:

... if the division or the commission determines that any proceedings have been brought, prosecuted or defended without reasonable ground, it may assess the whole cost of the proceedings upon the party who so brought, prosecuted or defended them.

As noted above, when awarding TSC additional reimbursement, I found its Application for Additional Reimbursement of Medical Fees sufficient to proceed and found TSC was entitled to additional reimbursement. On the other hand, I did not award prejudgment interest because I found that Employer/Insurer raised defenses that have not been previously raised or decided. Thus, I find that neither party is entitled to the costs of proceedings as neither party prosecuted or defended their positions in this matter without reasonable grounds.

CONCLUSION

TSC is hereby awarded the $30,057.09 sought in its Application for Reimbursement of Additional Medical Fees. TSC is not awarded prejudgment interest. Neither party is awarded the cost of these proceedings.

I certify that on 11/20/2020 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.

Made by:

Lee B. Schaefer

Administrative Law Judge

Division of Workers' Compensation

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