Submitted: October 4, 2013
BEFORE: HONORABLE BONNIE BRIGANCE LEADBETTER, Judge HONORABLE MARY HANNAH LEAVITT, Judge HONORABLE ANNE E. COVEY, Judge
MARY HANNAH LEAVITT, Judge
Selective Insurance Company of America (Insurer) petitions for review of an adjudication of the Bureau of Workers' Compensation Fee Review Hearing Office (Bureau) dismissing its request for a hearing to contest a fee determination made by the Bureau's Medical Fee Review Section. The pivotal issue raised in Insurer's petition was whether it had liability to pay invoices issued by a billing entity that was not the medical provider. The Bureau held that this is not an issue for a fee review proceeding, and we agree with this conclusion. However, we modify the Bureau's adjudication to vacate the fee determinations that Insurer challenged.
On January 23, 2012, Shawn Ferraccio (Claimant) injured his right shoulder while working for Gallery Interiors, Inc., and he received physical therapy to treat this work injury. Insurer denied the Physical Therapy Institute's invoices for this treatment for the stated reason that it did not actually provide physical therapy to Claimant, explaining as follows:
The Physical Therapy Institute is not the entity which provided the PT services represented on the submitted bill and therefore is not entitled to payment under the medical cost containment provision of the Act.
Reproduced Record at 13a (R.R.).
The Physical Therapy Institute filed two fee review applications, requesting review of the "amount of payment." R.R. 6a, 87a. The first application covered treatment from January 25, 2012, through February 3, 2012, for which it billed $2, 080.21. The Bureau's Medical Fee Review Section determined that the amount billed was correct and directed Insurer to pay the Physical Therapy Institute $2, 080.21 plus ten percent interest. In doing so, the Medical Fee Review Section stated that "Insurer did not provide a valid denial." R.R. 31a. The second fee review application covered treatment from February 6, 2012, through February 8, 2012, for which the Physical Therapy Institute billed $810.40. The Medical Fee Review Section determined that the amount billed was correct and directed Insurer to pay the Physical Therapy Institute $810.40 plus ten percent interest.
Insurer then filed a "Request for Hearing to Contest Fee Review Determination, " seeking a de novo hearing on both administrative determinations. Insurer identified the factual issue as "whether the billing provider is the provider that performed the physical therapy services" and the legal issue as whether "the billing provider [is] entitled to reimbursement for services." R.R. 119a.
The matter was assigned to a Hearing Officer in the Bureau. Counsel for each party appeared at the hearing and agreed that the threshold issue was whether the Bureau had jurisdiction to decide the question of whether the Physical Therapy Institute was a medical provider entitled to payment. Insurer's counsel requested an opportunity to submit evidence on the jurisdictional issue, noting that the evidentiary hearing would be "very long and intricate." R.R. 135a. The Physical Therapy Institute asserted that the Bureau had jurisdiction over the amount or timeliness of a payment owed for medical treatment but not over the question of whether a billing agency is a provider. Counsel also noted for the record that penalty petitions were pending before a workers' compensation judge for Insurer's non-payment of these same medical bills, in which a critical issue was whether the Physical Therapy Institute was a provider.
The Bureau dismissed Insurer's petition, concluding that its jurisdiction was limited to disputes over the amount or timeliness of an insurer's payment of medical bills. The Bureau concluded that the issue of whether the Physical Therapy Institute was a "provider" should be litigated in the penalty petition proceeding. Insurer then petitioned for this Court's review and requested supersedeas, which was granted by this Court.
On appeal,  Insurer presents two issues for our consideration. First, Insurer argues that the Bureau erred by concluding that it lacked jurisdiction over the issue raised in Insurer's fee review petition. Second, and alternatively, Insurer asserts that the Bureau erred in dismissing Insurer's request for a hearing when it should have dismissed the applications for fee review submitted by the Physical Therapy Institute.
We begin with a review of the law relevant to the payment of a claimant's medical expenses. Section 306(f.1)(1) of the Workers' Compensation Act (Act), Act of June 2, 1915, P.L. 736, as amended, 77 P.S. §531(1), obligates the employer to pay "for reasonable surgical and medical services, services rendered by physicians or other health care providers … medicines and supplies, as and when needed." 77 P.S. §531(1)(i) (emphasis added). Section 306(f.1)(5) of the Act allows a "provider who … disputes the amount or timeliness of [a] payment from the employer or insurer" to file an application for fee review. 77 P.S. §531(5) (emphasis added). Under the medical cost containment regulations, the provider first submits an application for fee review to the Bureau, which renders an administrative decision. 34 Pa. Code §127.256. Either the provider or the insurer may then contest an adverse determination by requesting a hearing, where the hearing officer considers the matter de novo and issues an adjudication. 34 Pa. Code §§127.257, 127.259. Filing a request for hearing acts as a "supersedeas of the administrative decision on the fee review." 34 Pa. Code §127.257(e).
In its first issue, Insurer argues that the Bureau erred in refusing to take evidence on the factual question of whether the Physical Therapy Institute was actually the "provider" of Claimant's physical therapy. Insurer argues that this threshold issue must be decided before the amount of payment can be determined. If the person ...