UPMC Benefit Mgmt. Servs., Inc. v. United Pharmacy Servs.

287 A.3d 474

UPMC BENEFIT MANAGEMENT SERVICES, INC. d/b/a UPMC Work Partners, Petitioner

v.UNITED PHARMACY SERVICES (BUREAU OF WORKERS’ COMPENSATION FEE REVIEW HEARING OFFICE), Respondent

No. 558 C.D. 2021

Commonwealth Court of Pennsylvania.

Argued June 22, 2022

Decided December 15, 2022

Christopher Scott, Harrisburg, for Petitioner.

Daniel J. Siegel, Havertown, for Respondent.

BEFORE: HONORABLE RENÉE COHN JUBELIRER, President Judge, HONORABLE PATRICIA A. McCULLOUGH, Judge, HONORABLE CHRISTINE FIZZANO CANNON, Judge, HONORABLE ELLEN CEISLER, Judge, HONORABLE LORI A. DUMAS, Judge

OPINION BY JUDGE FIZZANO CANNON

UPMC Benefit Management Services, d/b/a UPMC Work Partners (UPMC), petitions for review of the April 23, 2021 decision of the Bureau of Workers’ Compensation (Bureau) Medical Fee Review Hearing Office (Hearing Office). The Hearing Office reversed the dismissal by the Health Care Services Review Division of the Bureau's Fee Review Section (Fee Review Section) of three fee review applications submitted by United Pharmacy Services (Pharmacy), as prematurely filed. Upon review, we affirm the Hearing Office's decision.

I. Background

In October 2019, Lisa Cass (Claimant) sustained a work-related injury while in the employ of Pinnacle Health Medical Services (Employer). Hearing Off. Decision, 4/23/21 at 1, Finding of Fact (F.F.) 1, Reproduced Record (R.R.) at 52a. Claimant's injury was accepted by a medical-only notice of compensation payable (NCP) as "lower back area sprain/low back sprain from picking up a laptop bag." Id. In January 2020, Claimant was prescribed compound cream with instructions to apply one to three pumps to the affected area two to four times daily, as needed. F.F. 3. Between January and April 2020, Pharmacy issued three separate bills, each requesting payment of $2,249.98 for the compound cream dispensed to Claimant. F.F. 4-6. UPMC denied payment on the basis that the prescribed treatment was "not work related." F.F. 4-6.

Between March and June 2020, Pharmacy filed three applications for fee review pursuant to Section 306(f.1) of the Workers’ Compensation Act (Act),¹ 77 P.S. § 531, disputing UPMC's failure to pay the bills. F.F. 1 & 7; see also Fee Review Applications, R.R. at 4a-5a, 13a-14a & 24a-25a. The Fee Review Section denied each of Pharmacy's fee review applications as prematurely filed on the basis that the issue of the "causal relatedness" of the prescribed compound cream to the work injury remained outstanding. F.F. 8. Pharmacy requested a hearing to contest the three fee review determinations, asserting that the applications were not premature because Claimant's injury was accepted by Employer, no party petitioned for utilization review, and UPMC's 30-day period in which to remit payment following receipt of the disputed bills had lapsed. F.F. 9-10 & 13.

By decision circulated April 23, 2021, the Hearing Office reversed the determinations of the Fee Review Section and ordered UPMC to issue payment plus statutory interest to Pharmacy for the medications dispensed to Claimant. Hearing Off. Decision, 4/23/21 at 1 & 6-7, R.R. at 50a & 55a-56a. The Hearing Office reasoned that UPMC's denial of payment on the basis of lack of "causal relatedness" did not render Pharmacy's fee review application premature, because this "defense" in fact constituted a challenge to the reasonableness and necessity of Claimant's treatment, which UPMC should have disputed through the utilization review process. See Hearing Off. Decision, 4/23/21 at 6, R.R. at 55a (first citing Workers’ First Pharmacy Servs., LLC v. Bureau of Workers’ Comp. Fee Rev. Hearing Off. (Gallagher Bassett Servs.) , 225 A.3d 613 (Pa. Cmwlth. 2020) ; and then citing Omni Pharmacy Servs., LLC v. Bureau of Workers’ Comp. Fee Rev. Hearing Off. , 241 A.3d 1273, 1274 (Pa. Cmwlth. 2020), reargument denied (Dec. 18, 2020), appeal denied sub nom . Omni Pharmacy Servs., LLC v. Bureau of Workers’ Comp. Fee Rev. Hearing Off. (Am. Interstate Ins. Co.) , ––– Pa. ––––, 257 A.3d 1212 (2021) ). Further, the Hearing Office concluded that Crozer Chester Medical Center v. Department of Labor and Industry, Bureau of Workers’ Compensation Health Care Services Review Division , 610 Pa. 459, 22 A.3d 189 (2011) ( Crozer Chester II ), was inapposite, as that case turned on whether the provider had alleged sufficient facts in support of its request for mandamus relief to compel issuance of a fee review determination. Hearing Off. Decision, 4/23/21 at 6, R.R. at 55a. The Hearing Office, therefore, determined that Pharmacy did not file the three fee review applications prematurely. See id. at 6, R.R. at 55a (citing Workers’ Compensation (WC) Regul. 127.255, 34 Pa. Code § 127.255 ). The Hearing Office concluded that UPMC failed to meet its burden of proving by a preponderance of the evidence that it properly reimbursed Pharmacy. Id. (citing WC Regul. 127.255(f); 34 Pa. Code § 127.259(f) ).

UPMC petitioned this Court for review.²

II. Issues

Before this Court,³ UPMC argues that the Hearing Office erred in applying Workers’ First and Omni to determine that Pharmacy's fee review applications were not prematurely filed where the dispute "turn[ed] solely on ... liability for a particular medical treatment." UPMC's Br. at 21. UPMC contends that even where a claimant's injury is accepted by means of an open NCP, "the insurer may nonetheless question liability for a particular treatment." Id. at 21 (quoting Crozer Chester II , 22 A.3d at 195 ); see also Crozer Chester II , 22 A.3d at 197 (explaining that "liability for an injury is distinct from liability for a particular treatment or its cost. The NCP, even if ‘open’ and binding with respect to liability for the injury, is not dispositive as to the medical care provider's claim for reimbursement for the cost of a particular treatment."). Further, UPMC asserts that utilization review may not decide the causal relationship between the treatment under review and the employee's work-related injury. See id. at 14 (citing WC Regul. 127.406(b)(1), 34 Pa. Code § 127.406(b)(1) ).⁴ UPMC maintains that "[i]n cases in which liability for a particular treatment is at issue, the claimant, not the medical provider, must pursue compensation before a workers’ compensation judge in the regular course." Id. at 17 (quoting Crozer Chester II , 22 A.3d at 195 (first citing Section 306(f.1) of the Act, 77 P.S. § 531(6)(iv) (utilization review); and then Section 401.1 of the Act, added by the Act of February 8, 1972, P.L. 25, 77 P.S. § 710 (liability for compensation generally))). UPMC contends that our Supreme Court's decision in " Crozer Chester [II] supersedes this Court's analyses in both Workers’ First [ ] and Omni pursuant to the doctrine of stare decisis ." Id. at 19 (citing Rodriguez v. Workers’ Comp. Appeal Bd. (Adecco Grp. N. Am.) (Pa. Cmwlth., No. 869 C.D. 2019, 2021 WL 49966, filed Jan. 6, 2021 )). UPMC requests that this Court reverse the Hearing Office's April 23, 2021 decision and dismiss Pharmacy's three fee review applications. Id. at 2 & 23.

Pharmacy counters that an employer or insurer must use the utilization review process to dispute liability for treatment on the basis that it is unrelated to the work injury, because such a challenge constitutes a dispute regarding the reasonableness and necessity of that treatment. Pharmacy's Br. at 8-9 (first citing Workers’ First ; and then citing Omni ). Pharmacy contends that this Court's clarification of the law in Workers’ First and Omni has the beneficial effect of preventing an employer or insurer from defeating a fee review petition merely by asserting that billed treatment or service was not causally related to the work injury. Id. at 12. Further, Pharmacy asserts that deeming its fee review applications premature on the basis of UPMC's asserted "defense" of lack of "causal relation" denies Pharmacy due process by depriving it and other providers of recourse for nonpayment. Id. at 15 & 18-19. Pharmacy echoes the Hearing Office in distinguishing Crozer Chester II as involving the narrow question of whether a hospital alleged sufficient facts to support its petition for review in mandamus seeking to compel the Pennsylvania Department of Labor and Industry (Department) to reach the merits of its fee review application. Id. at 20 (citing Crozer Chester II , 22 A.3d at 191 ).

After the parties presented their arguments during this Court's October 2021 en banc session, we ordered supplemental briefing to address the potential impact of the Pennsylvania Supreme Court's recent decision in Keystone Rx LLC v. Bureau of Workers’ Compensation Fee Review Hearing Off. (Compservices Inc./AmeriHealth Casualty Services) , ––– Pa. ––––, 265 A.3d 322 (2021), on their respective positions. See Cmwlth. Ct. Order, 12/27/21. Specifically, this Court instructed the parties to address whether a fee review petition may be dismissed as premature based on a causal relationship challenge where (1) the work injury is accepted, (2) no utilization review petition has been filed, and (3) payment has not been made within the statutory period. Id. ; see also 34 Pa. Code § 127.255.

The parties submitted supplemental briefs and argued their positions before this Court's June 2022 en banc panel. UPMC contended that deeming Pharmacy's fee review applications premature on the basis of a "causal relatedness" denial would not infringe upon Pharmacy's due process rights because, under Keystone Rx , a non-treating provider does not have a constitutionally protected interest in goods or services where it is not entitled to payment under the Act. UPMC's Suppl. Br. at 13 & 16. Pharmacy countered that the Pennsylvania Supreme Court's holding in Keystone Rx that non-treating providers were not entitled to notice and an opportunity to intervene in utilization review proceedings does not bear upon whether Pharmacy prematurely filed the disputed fee review applications. See Pharmacy's Suppl. Br. at 4-5. Further, Pharmacy noted that,...