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Keystone Rx LLC v. Bureau of Workers' Compensation fee Review Hearing Office

Commonwealth Court of Pennsylvania

December 12, 2019

Keystone Rx LLC, Petitioner
v.
Bureau of Workers' Compensation Fee Review Hearing Office (Compservices Inc./AmeriHealth Casualty Services), Respondent

          ARGUED: November 12, 2019

          BEFORE: HONORABLE MARY HANNAH LEAVITT, President Judge HONORABLE CHRISTINE FIZZANO CANNON, Judge HONORABLE BONNIE BRIGANCE LEADBETTER, Senior Judge

          OPINION

          BONNIE BRIGANCE LEADBETTER, Senior Judge

         Keystone Rx LLC (Pharmacy) petitions for review of an adjudication of the Bureau of Workers' Compensation (Bureau) Fee Review Hearing Office (Hearing Office) that vacated the administrative determinations of the Bureau's Medical Fee Review Section and dismissed two applications for fee review filed by Pharmacy pursuant to Section 306(f.1) of the Workers' Compensation Act (Act).[1]In rendering the adjudication, the Hearing Office relied on a utilization review (UR) determination concluding that AmeriHealth Casualty Services (Insurer) met its burden of proving that the medications Dr. Bradley Ferrara (Physician) prescribed to Thomas Shaw (Claimant) for the period under review constituted unreasonable and unnecessary treatment. On appeal, Pharmacy argues that a UR process determining the reasonableness and necessity of treatment but in which it cannot participate should not defeat its applications for fee review where only the amount and the timeliness of the payment from the insurer or the employer may be determined. Pharmacy's position relies on, but overstates, our decision in Armour Pharmacy v. Bureau of Workers' Compensation Fee Review Hearing Office (Wegman's Food Markets, Inc.), 206 A.3d 660, 671 (Pa. Cmwlth. 2019) (en banc) (Armour II). Pharmacy essentially argues that the due process holding of Armour II mandates that it be paid for filling a prescription even where, as here, a UR has found it to be unreasonable and unnecessary. We disagree, and for the reasons that follow, we affirm the dismissal of Pharmacy's applications for fee review.

         The relevant background is as follows. In August 2014, Claimant sustained a work injury to his left knee. As a result, Physician rendered medical care and prescribed medications to Claimant. On May 5 and 11, 2017, Pharmacy dispensed prescribed medications to Claimant and billed Insurer.[2] In June 2017, Insurer filed a UR request. According to the August 2017 determination, all treatment rendered by Physician from November 2, 2016, and onward was adjudicated unreasonable and unnecessary. (Sept. 2, 2018, Decision of Hearing Office, Finding of Fact "F.F." No. 8.) Two petitions for review of the UR determination followed, both of which were withdrawn pursuant to a Compromise and Release (C&R) Agreement.[3]

         In July 2017, Pharmacy filed the two applications for fee review at issue. In two September 2017 administrative determinations, the Medical Fee Review Section concluded that Pharmacy was due payment in the amount of $3, 616.46 for compound cream and $887.66 for Naprelan tablets. (F.F. No. 5.) Insurer filed a request for hearing to contest the determinations, maintaining that the treatment was unrelated and/or unreasonable/unnecessary. (F.F. No. 6.) In February and June 2018, the Hearing Office held hearings on the applications. Ultimately, it vacated the administrative determinations and dismissed the two applications. We now consider Pharmacy's petition for review to this Court requesting that we reverse the Hearing Office's adjudication.

         We begin with a review of the statutory provisions setting the parameters of the fee review and UR processes. With respect to the fee review, Section 306(f.1)(5) of the Act provides that a provider may challenge only the amount and the timeliness of the payment from the insurer or the employer. Section 306(f.1)(5) provides:

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 no more than thirty (30) days following notification of a disputed treatment or ninety (90) days following the original billing date of treatment.

77 P.S. § 531(5) (emphasis added). With respect to UR, Section 306(f.1)(6) of the Act provides that such review may be requested only by or on behalf of the employer, insurer, or the employee. In pertinent part, Section 306(f.1)(6) provides:

[D]isputes 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 [UR] at the request of an employe, employer or insurer. The department shall authorize [UR] organizations to perform [UR] under this act. [UR] of all treatment rendered by a health care provider shall be performed by a provider licensed in the same profession and having the same or similar specialty as that of the provider of the treatment under review.

77 P.S. § 531(6) (emphasis added).[4] Accordingly, a provider such as Pharmacy may initiate only an action disputing the amount or timeliness of payment under Section 306(f.1)(5) but not one challenging the reasonableness or necessity of treatment under Section 306(f.1)(6).

         Pharmacy acknowledges the foregoing statutory limitations, but maintains that the Hearing Office's reliance on the UR determination results in an improper deprivation of Pharmacy's due process rights with respect to payment for the prescriptions and that this Court's decision in Armour Pharmacy v. Bureau of Workers' Compensation Fee Review Hearing Office (National Fire Insurance Co. of Hartford), 192 A.3d 304, 312 (Pa. Cmwlth. 2018) (Armour I), warrants reversal. However, neither our decision in Armour I nor Armour II, decided after the Hearing Office's adjudication, provides a basis for reversal here.

         In Armour I, a pharmacy filed a timely fee review application with respect to prescription compound cream that it had dispensed to the claimant. In the administrative determination, the Medical Fee Review Section concluded that the employer owed payment to the pharmacy for the prescription. Before the hearing on the employer's appeal of the fee review determination, however, the employer and the claimant entered into a C&R agreement that explicitly relieved the employer from liability for past, present, or future prescriptions for such creams. In the adjudication granting the employer's motion to dismiss and vacating the fee review determination, the Hearing Office concluded that (1) the administrative determination could not stand in light of the C&R agreement; (2) the Hearing Office lacked authority to address constitutional questions such as due process; and (3) the Hearing ...


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