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SULLIVAN v. BARNETT

January 24, 1996

DELORES SCOTT SULLIVAN, et al., Plaintiffs,
v.
ROBERT BARNETT, et al., Defendants,



The opinion of the court was delivered by: BUCKWALTER

 BUCKWALTER, J.

 January 24, 1996

 I. BACKGROUND

 Plaintiffs in this putative civil rights class action claim to be persons who had been receiving medical benefits pursuant to the Pennsylvania Worker's Compensation Law, and who were thereafter deprived of those benefits without prior notice or an opportunity to be heard pursuant to what plaintiffs' counsel characterize as an "automatic supersedeas" as provided by Section 306(f.1)(5) of the aforesaid law, as amended, 77 P.S. 531(5) (Supp. 1994), which provides in part as follows:

 
The employer or insurer shall make payment and providers shall submit bills and records in accordance with the provisions of this section. All payments to providers for treatment provided pursuant to this act shall be made within thirty (30) days of receipt of such bills and records unless the employer or insurer disputes the reasonableness or necessity of the treatment provided pursuant to paragraph (6). A provider who has submitted the reports and bills required by this section and who disputes the amount or timeliness of the payment from the employer or insurer shall file an application for fee review with the department. Within thirty (30) days of the filing of such an application, the department shall render an administrative decision.

 Paragraph 6 provides, in part, as follows:

 
Except in those cases in which a referee asks for an opinion from peer review under section 420, disputes as to reasonableness or necessity of treatment by a health care provider shall be resolved in accordance with the following provisions:
 
(i) The reasonableness or necessity of all treatment provided by a health care provider under this act may be subject to prospective, concurrent or retrospective utilization review at the request of an employe, employer or insurer. The department shall authorize utilization review organizations to perform utilization review under this act. Organizations not authorized by the department may not engage in such utilization review.
 
(ii) The utilization review organization shall issue a written report of its findings and conclusions within thirty (30) days of a request. If the provider, employer, employe or insurer disagrees with the finding of the utilization review organization, a request for reconsideration must be filed no later than thirty (30) days after receipt of the utilization review report. The request for reconsideration must be in writing.
 
(iii) The employer or the insurer shall pay the cost of the initial utilization review. The party which does not prevail on reconsideration of an initial review shall bear the costs of such reconsideration.
 
(iv) If the provider, employer, employe or insurer disagrees with the finding of the utilization review organization on reconsideration, a petition for review by the department must be filed within thirty (30) days after receipt of the reconsideration report. The department shall assign the petition to a referee for a hearing.

 The "automatic supersedeas" to which plaintiffs refer is implemented by regulations which, as of November 11, 1995, provide in part as follows. All regulations hereafter set forth come from exhibits supplied to the court by plaintiffs' counsel.

 § 127.208. Time for payment of medical bills.

 
(a) Payments for treatment rendered under the act shall be made within 30 days of receipt of the bill and report submitted by the provider.
 
(f) If a URO determines that medical treatment is reasonable or necessary, at reconsideration, the insurer shall pay for the treatment. Filing a petition for review before a Workers' Compensation judge, does not further suspend the obligation to pay for the treatment once there has been a determination at reconsideration that the treatment is reasonable or necessary. If it is finally determined that the treatment was not reasonable or necessary, and the insurer paid for the treatment in accordance with this chapter, the insurer may seek reimbursement from the Supersedeas Fund under section 443(a) of the act (77 P.S. § 999).

 The Utilization Review (UR) provisions of Subchapter C relating to medical treatment review provide in part as follows:

 § 127.401. Purpose - review of medical treatment.

 
(a) Section 306(f.1)(6) of the Act provides a utilization review (UR) process, intended as an impartial review of the reasonableness or necessity of medical treatment rendered to, or proposed for, work-related injuries and illnesses.
 
(b) UR is a three-step process, that may be requested by multiple parties:
 
1. The first-step is the initial request that may be made by, or on behalf of, the employer, insurer or employe.
 
2. The second-step is the request for reconsideration that may be made by, or on behalf of the employer, insurer, employe or health care provider.
 
3. The third-step is the petition for review of utilization review, that may be filed by, or on behalf of, the employer, insurer, employe or health care provider.

 (c) Review of medical treatment shall be conducted only by those organizations authorized as utilization review organizations (UROs) by the Secretary, pursuant to the process set forth in § 127.650 through § 127.670.

 § 127.403. Assignment of cases to UROs.

 
The Bureau will randomly assign requests for UR to authorized UROs. An insurer's obligation to pay medical bills within 30 days of receipt shall be tolled only when a proper request for UR has been filed with the Bureau in accordance with the provisions of this Subchapter.

 § 127.451. Initial requests for utilization review - who may file.

 
Initial requests for UR may be filed by an employe, employer or insurer. Health care providers may not file initial requests for UR.

 § 127.452. Initial requests for utilization review - filing and service.

 
(a) A party seeking UR of treatment rendered under the Act shall file the original and 8 copies of a form prescribed by the Bureau as an initial request for utilization review. All information required by the form must be provided. Where available, the filing party shall attach authorizations to release medical records of the providers listed on the request.
 
(b) The initial request for UR shall be served on all parties and their counsel (if known) and the proof of service on the form shall be executed. If the proof of service is not executed, the request for UR will be returned by the Bureau.
 
(c) Initial requests for UR shall be sent to the Bureau at the address listed on the form.
 
(a) The Bureau will randomly assign a properly filed request for UR to a certified URO (Utilization Review Organization).
 
(b) The Bureau will send a notice of assignment of the request for UR to the URO; the employe; the employer or insurer; the health care provider under review, and the attorneys for the parties, if known.

 § 127.476. Duties of UROs - form and service of determinations.

 
(a) Each determination rendered by a URO on the merits shall include a form prescribed by the Bureau as a medical treatment review determination face sheet and the reviewer's report. The face sheet shall be signed by an authorized representative of the URO.
 
(b) When a determination is rendered against the provider under review on the basis that no records were supplied by the provider, the determination shall consist only of the face sheet. However, in such cases, the face sheet shall clearly indicate that the basis for the decision is ...

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