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Workers First Pharmacy Services, LLC v. Bureau of Workers' Compensation Fee Review Hearing Office (Cincinnati Insurance Company)

Commonwealth Court of Pennsylvania

August 7, 2019

Workers First Pharmacy Services, LLC, Petitioner
v.
Bureau of Workers' Compensation Fee Review Hearing Office (Cincinnati Insurance Company), Respondent

          Argued: June 3, 2019

          BEFORE: HONORABLE MARY HANNAH LEAVITT, President Judge, HONORABLE ROBERT SIMPSON, Judge, HONORABLE ELLEN CEISLER, Judge

          OPINION

          MARY HANNAH LEAVITT, PRESIDENT JUDGE

         Workers First Pharmacy Services, LLC, (Pharmacy) petitions for review of an adjudication of the Bureau of Workers' Compensation, Fee Review Hearing Office (Hearing Office) that vacated three fee review determinations by the Bureau's Medical Fee Review Section. In a Compromise and Release (C&R) Agreement between Miguel Martinez (Claimant) and American Business Support (Employer), Employer denied that Claimant suffered a work injury but, nevertheless, agreed to compensate Claimant. The Hearing Office concluded it lacked jurisdiction over Pharmacy's fee review applications because Employer did not accept liability for the work injury in the C&R Agreement. Pharmacy argues that Employer cannot use a C&R Agreement to deprive Pharmacy of payment for medical services it provided to Claimant. We vacate and remand.

         Background

         On May 16, 2017, Claimant filed a claim petition pursuant to the Workers' Compensation Act (Act), [1] alleging that he suffered a work injury to his head, neck, back and left shoulder. Specifically, Claimant alleged that on November 12, 2016, while moving a cabinet, his hand truck got caught in carpeting causing the cabinet to fall on him. On January 16, 2017, Employer filed a notice of workers' compensation denial with the Bureau of Workers' Compensation, stating Claimant did not suffer a work injury.

         On May 15, 2017, Gerald E. Dworkin, D.O., of the Pain and Spine Treatment Center, prescribed Claimant several medications, only two of which are relevant here. On May 17, 2017, Pharmacy dispensed 177.2 units of Lidocaine 5 percent Ointment, for which it billed Employer, by its insurer Cincinnati Insurance Company (Insurer), $1, 909.95, and 300 units of Diclofenac 1.5 percent Topical Solution, for which it billed Insurer $3, 249.99. On June 8, 2017, Pharmacy dispensed 177.2 units of Lidocaine 5 percent Ointment and billed Employer $1, 909.95. On June 19, 2017, Pharmacy dispensed 300 units of Diclofenac 1.5 percent Topical Solution, for which it billed Employer $3, 249.99.

         Employer denied payment on all three invoices for the stated reason that Claimant did not sustain a work injury. In response, Pharmacy filed three fee review applications. The Medical Fee Review Section denied Pharmacy's applications regarding the May 17 and June 19 invoices as premature because Employer had contested liability for the alleged work injury. Regarding the June 8 invoice, the Medical Fee Review Section found that Employer owed Pharmacy $1, 650 (110 percent of the average wholesale price), plus interest for an untimely payment.[2]

         Employer requested a hearing to contest all three fee review determinations even though it had only received an adverse determination regarding the June 8 invoice. Employer argued that the Medical Fee Review Section lacked jurisdiction over Pharmacy's fee review applications because Employer had no liability for Claimant's injuries.

         At a January 17, 2018, hearing before the Hearing Office, the parties agreed that Employer had denied liability for Claimant's injuries. They also agreed that a hearing was scheduled before the Workers Compensation Judge (WCJ) on February 21, 2018, and there was a possibility of settlement. The Hearing Office continued the fee review contest in light of the scheduled WCJ hearing.

         On February 21, 2018, Employer and Claimant presented a C&R Agreement to the WCJ. Therein, Employer agreed to pay Claimant $37, 500 in settlement of "his workers' compensation claim for past, present, and/or future indemnity and future health care benefits/medical benefits[.]" C&R, ¶19;

         Reproduced Record at 22a (R.R. __). Paragraphs 10 and 10(r) of the C&R Agreement stated, in pertinent part:

This is a resolution of a disputed claim. The mere fact that the parties are entering into this resolution should not be construed by Claimant, this Court or any other person or entity that [Employer] is in any manner legally obligated for any of the payments being made pursuant to this [C&R] Agreement. To the contrary, [Employer] vigorously denies and disputes any and all allegations that have been made by the Claimant in any of the Claimant's Petitions.
***
Concerning past medical expenses, all parties acknowledge that there are past unpaid healthcare expenses. These include, but are not limited to, Jeanes Hospital, Temple University Physicians ER, Disston Chiropractic, Temple Family Practice and Dr. Dworkin. As part and parcel of this settlement, Claimant is responsible for any past healthcare bills, medical bills, prescription drug bills or health related matters with limited exception. Both parties also acknowledge that there are outstanding bills from [Pharmacy] for topical creams. This is a denied claim. Nevertheless, [Pharmacy] filed for reimbursement of its bill through the Fee Review system. In short, the outstanding bills for topical cream are currently being reviewed and litigated through the Fee Review system. Those limited outstanding bills are separate, distinct, and are not part of this otherwise global resolution for any and all past, present and future wages together with past, present and future medical. That is, and by way of clarification, the Fee Review for [Pharmacy] (attached is a request for hearing to contest the Fee Review Determination as Exhibit "C") shall continue. The instant [C&R] Agreement does not resolve that issue nor will the Claimant be responsible for any payments to [Pharmacy] pursuant to the separate Fee Review litigation. Nevertheless, with that limited exception, the instant settlement for a gross lump sum of $37, 500.00 resolves any and all past, present or future wages together with any other past, present or future healthcare bills, medical bills, prescription drug bills including but not limited to the referenced provider set forth above. Under no circumstances will [Employer] be responsible for any other past, present or future healthcare bills (again with the limited exception of the pending Fee Review matter attached as Exhibit "C"). That matter shall continue litigation and is not being resolved by this [C&R] Agreement. However, [Employer] is not responsible for any past outstanding bills from Jeanes Hospital, Temple University, Disston Chiropractic, Temple Family Practice, Dr. Dworkin and any others again with the limited exception set forth herein.

C&R, ¶¶10 and 10(r); R.R. 21a, 24a (emphasis added).

         At the hearing on the C&R Agreement, Claimant testified that Employer had agreed to settle without accepting liability for his injuries. Claimant agreed that he would be responsible for any outstanding medical expenses, except for those related to Pharmacy's fee review applications. Employer's counsel questioned Claimant as follows:

Q. Just a few questions. Your attorney was very thorough. With respect to the fee review, there's a fee review currently open [with Pharmacy]. You understand whatever the fee review determination eventually comes down with, zero dollars owed, $1, 000 owed, what have you, it's going to have nothing to do with you; do you understand that?
A. Okay
Q. Is that okay with you?
A. Yes
Q. So, if it's deemed that [Insurer] owes an amount of money, that that will be paid for and you won't be liable ...

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