Chesterfield Spine Ctr., LLC v. Best Buy Co.

617 S.W.3d 450

CHESTERFIELD SPINE CENTER, LLC, d/b/a St. Louis Spine & Orthopedic Surgery Center, Appellant,

v.BEST BUY COMPANY, INC., and XL Insurance America, Inc., Respondents.

WD 83757

Missouri Court of Appeals, Western District.

OPINION FILED: January 12, 2021

Jack B. Spooner, St. Louis, MO, Attorney for Appellant.

Joshua K. Friel, St. Louis, MO, Attorney for Respondents.

Before Division Two: Lisa White Hardwick, Presiding Judge, and Thomas H. Newton and Karen King Mitchell, Judges

Karen King Mitchell, Judge

Chesterfield Spine Center, LLC, d/b/a St. Louis Spine & Orthopedic Surgery Center (Chesterfield) appeals from the decision of the Labor and Industrial Relations Commission dismissing Chesterfield's medical fee dispute as time barred. Chesterfield raises seven points on appeal. In its first three points, Chesterfield argues that the Commission erred in dismissing its medical fee dispute because genuine issues of material fact exist as to whether the payment explanation provided to Chesterfield is a notice of dispute. For its remaining points, Chesterfield raises constitutional challenges to the medical fee dispute statute and regulation and their application to this case. Finding no error, we affirm.

Background¹

On April 27, 2013, an employee of Best Buy Co., Inc. (Employer) was injured when a refrigerator he was moving fell on him. The employee filed a Claim for Compensation with the Missouri Division of Workers’ Compensation on June 19, 2013. On December 22, 2015, Chesterfield provided authorized medical services to the employee and billed Employer $125,184.60 for those services.² On May 23, 2016, Sedgwick Claims Management Services, Inc., sent Chesterfield a check for $50,629.23 along with an Explanation of Bill Review, and Chesterfield deposited the check on June 1, 2016. The Explanation itemized each procedure and showed the reduction applied to each charge. Each reduction had a code in the column labeled "Negotiated/Discount" that corresponded to a key at the bottom of the page titled, "Explanation of Reason Codes for Detail Lines," which stated,

v279 Reduction due to Fairpay Solutions review. For questions[,] please contact Fairpay at 888-380-5616....

z652 Recommendation of payment has been based on th[ese] procedure code[s], 490 [and 278], which best describe[ ] services rendered....

v140 CV: Allowance is recommended at fair and reasonable rate for implant charges that are supported by the submitted documentation....

The Explanation identified Sedgwick as the payor, included a box for the "TPA Claim Number," and identified Employer and its insurer XL Insurance America, Inc., by name. The check identified "Sedgwick as Agent for Best Buy/XL Insurance America, Inc."

On August 16, 2017, Chesterfield filed an Application for Payment of Additional Reimbursement of Medical Fees, asserting that Chesterfield is entitled to the additional $74,555.37 for the authorized medical services rendered to the employee. In response, Insurer filed a Request for Award on Undisputed Facts, asking the Division to deny Chesterfield's Application as untimely under § 287.140.4(2).³ Insurer's Request included the following relevant facts: (1) the date of service was December 22, 2015, and the amount billed was $125,184.60; (2) a check in the amount of $50,629.93 along with the Explanation was mailed by or on behalf of Sedgwick to Chesterfield; (3) the Explanation was in writing and had Reason Codes to explain the basis for disputing the charged amounts; (4) Chesterfield cashed or deposited the check on or before June 1, 2016; and (5) Chesterfield's Application was filed on or about August 16, 2017.

To support these facts, Insurer submitted the affidavit of Erik Smestad, a Claims Team Lead at Sedgwick, along with copies of the Explanation, the check for $50,629.93, and the deposit record. Based on his personal knowledge and a review of the pertinent business records, Smestad testified that the Explanation "along with" the check for $50,629.93 were mailed by or on behalf of Sedgwick, as the third-party administrator for Employer/Insurer, to Chesterfield on or about May 23, 2016, and the check cleared on June 1, 2016. Smestad also testified that Chesterfield sent Sedgwick a letter in February 2017, well within the limitations period, to request that the claim be reprocessed. In the letter, Chesterfield threatened to initiate a medical fee dispute if the parties could not agree on an additional reimbursement amount.

Chesterfield filed a response to the Request for Award in which it admitted Insurer's undisputed facts, except Chesterfield denied that (1) the Explanation and check were mailed together; (2) the Explanation constituted a notice of dispute; and (3) Chesterfield received the Explanation on or before June 1, 2016. Chesterfield's response also included the following additional material facts: (1) Insurer did not provide Chesterfield with "any bill, demand, request or opinion disputing [Chesterfield's] medical fee or as to what [Insurer] believed to be a fair and reasonable fee for the services provided"; (2) the Explanation did not "indicate it was created or provided by [Insurer] or that the medical charges are being disputed or explain the basis for the dispute"; and (3) neither Insurer nor its designated representative sent Chesterfield a notice of dispute. Chesterfield did not provide any additional evidence in support of its additional material facts or in support of its denials.

On September 17, 2019, an administrative law judge with the Division issued Findings of Fact and Rulings of Law denying Chesterfield's Application. The ALJ made the following findings of fact: (1) Chesterfield filed the Application on August 22, 2017; (2) the medical services at issue were rendered on December 22, 2015; (3) Insurer mailed the Explanation and the check to Chesterfield on May 23, 2016; (4) the Explanation was in writing and contained the basis for disputing portions of the amount charged; (5) Chesterfield deposited the check on June 1, 2016; and (6) Chesterfield received the Explanation and check no later than June 1, 2016. Based on its findings, the ALJ determined that there were no genuine issues of material fact as to the notice of dispute or the fact that Chesterfield's Application was time barred. Following Chesterfield's timely request for review, the Commission issued a Final Award adopting the ALJ's findings and award and concluding that Employer/Insurer is not liable to Chesterfield for additional reimbursement of medical fees.

This appeal follows.

Standard of Review

When reviewing a final award on undisputed facts by the Commission in a medical fee dispute, we determine whether, based on the undisputed facts set forth by the employer/insurer, the health care provider's response to those facts, and any additional disputed material facts set forth by the health care provider, there are sufficient material facts to support the Commission's award and whether any genuine issues of material fact remain. 8 C.S.R. § 50-2.030(1)(P) (2014).

Analysis

Before analyzing Chesterfield's points on appeal, we review the workers’ compensation statutes and regulations governing medical fee disputes.

In pertinent part, § 287.140 provides,

3. All fees and charges under this chapter shall be fair and reasonable [and] shall be subject to regulation by the division or the commission.... 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 ... 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.

4. The division shall, by regulation, establish methods to resolve disputes concerning the reasonableness of medical charges, services, or aids. This regulation shall govern resolution of disputes between employers and medical providers over fees charged, whether or not paid, and shall be in lieu of any other administrative procedure under this chapter. The employee shall not be a party to a dispute over medical charges, nor shall the employee's recovery in any way be jeopardized because of such dispute. Any application for payment of additional reimbursement, as such term is used in 8 CSR 50-2.030, as amended, shall be filed not later than:

(1) Two years from the date the first notice of dispute of the medical charge was received by the health care provider if such services were rendered before July 1, 2013; and

(2) One year from the date the first notice of dispute of the medical charge was received by the health care provider if such services were rendered after July 1, 2013.

Notice shall be presumed to occur no later than five business days after transmission by certified United States mail.

The italicized text was added in 2013 and became effective January 1, 2014.

Pursuant to § 287.140, the Commission promulgated 8 C.S.R. § 50-2.030, which sets forth procedures for resolving medical fee disputes. In relevant part, 8 C.S.R. § 50-2.030 states,

(1) Procedures Pertaining to Applications for Payment of Additional Reimbursement of Medical Fees (Reasonableness Disputes).

(A) If an employer or insurer disputes the reasonableness of a medical fee or charge, the employer or insurer shall notify the health care provider in writing that the medical charge is being disputed and shall explain the basis for the dispute. The employer or insurer may tender partial payment and the health care provider may accept payment of the amount tendered without prejudice to the filing of an application for payment of additional reimbursement of medical fees. Upon receiving the written notice of the dispute, the health care provider may contact the insurer or

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