Washington Twnsp. Fire v. Beltway Surg. Ctr

911 N.E.2d 590

WASHINGTON TOWNSHIP FIRE DEPARTMENT, Appellant-Defendant, v. BELTWAY SURGERY CENTER, (Vance May, Employee), Appellee-Plaintiff.

No. 93A02-0811-EX-1006.

Court of Appeals of Indiana.

June 24, 2009.

Doris L. Sweetin, Jeb A. Crandall, Brandon G. Milster, Sweetin & Bleeke, P.C., Bryan H. Babb, Kellie M. Johnson, Bose McKinney & Evans, LLP, Indianapolis, IN, Attorneys for Appellant.

Anthony W. Overholt, Maggie L. Smith, Frost Brown Todd, LLC, Apryle A. Fryer, Hardamon & Associates, Indianapolis, IN, Attorneys for Appellee.

Mark D. Gerth, Kightlinger & Gray, LLP, Indianapolis, IN, Attorney for Amici Curiae, Insurance Institute of Indiana and the Indiana Manufacturers Association.

OPINION

BARNES, Judge.

Case Summary

Washington Township Fire Department ("Washington Township") appeals a decision of the Worker's Compensation Board ("the Board") awarding to Beltway Surgery Center ("Beltway") the full amount of Beltway's medical bills for treatment to an employee of Washington Township. We affirm.

Issues

The restated issues before us are:

I. whether the Board properly placed the burden on Washington Township to prove that Beltway's billed charges exceeded the maximum permissible under the Indiana Worker's Compensation Act ("the Act"); and

II. whether the Board properly awarded Beltway the full amount of its billed charges.

Facts

On March 1, 2005, Beltway provided medical services to Vance May¹ for injuries sustained during the course and scope of May's employment by Washington Township. Beltway submitted a bill for $11,563.30 for medical services to Washington Township's worker's compensation insurer, Indiana Public Employers Plan ("IPEP"). IPEP in turn hired Mednet, a "billing review service" under the terms of the Act, to determine whether Beltway's bill fell at or below the 80th percentile for charges by medical providers within the same community for similar services. The 80th percentile standard is the maximum amount of an employer's "pecuniary liability" for medical services under the Act. Mednet reviewed Beltway's bill and recommended payment of only $5,104.27. IPEP paid Beltway that amount.

On July 1, 2005, Beltway filed an application for adjustment of claim with the Board, seeking recovery of the remaining $6,459.03 on its original $11,563.30 bill. Mednet subsequently recommended payment of an additional $2,230.14 to Beltway, for a total of $7,334.41, leaving $4,228.89 unpaid on the original bill. In proceedings before the Board, Mednet was unable to produce any of the data that it used in its calculation of the amount Beltway was entitled to be paid. Washington Township apparently did attempt to partially recreate some of that data, though using a different medical billing coding system and for years other than when May received treatment.

On June 10, 2008, a Single Hearing Member of the Board ordered Washington Township to pay Beltway the remaining $4,228.89 left unpaid on the original bill. On October 10, 2008, the full Board affirmed this ruling. It determined that Washington Township, through Mednet, bore the burden of producing evidence explaining how Washington Township's pecuniary liability to Beltway of only $7,334.41 had been calculated. Because Washington Township and Mednet failed to produce any such evidence, it concluded Washington Township was required to pay the full amount of Beltway's submitted bill. A majority of the board, however, declined to impose further civil penalties against Washington Township or Mednet. Washington Township now appeals.

Analysis

When reviewing a worker's compensation decision, we are bound by the factual determinations of the Board and may not disturb them unless the evidence is undisputed and leads inescapably to a contrary conclusion. Christopher R. Brown, D.D.S., Inc. v. Decatur County Mem'l Hosp., 892 N.E.2d 642, 646 (Ind. 2008). We examine the record only to determine whether there is substantial evidence and reasonable inferences that can be drawn therefrom to support the Board's findings and conclusions. Id. As to the Board's legal interpretations, we employ a deferential standard of review to the interpretation of a statute by an administrative agency charged with its enforcement in light of its expertise in the given area. Id. We will reverse the Board only if it incorrectly interpreted the Act. Id. In other words, the Board's interpretation of a statute is entitled to great weight and when faced with two reasonable interpretations of a statute, one of which is supplied by an administrative agency charged with enforcing the statute, courts should defer to the agency. Cincinnati Ins. Co. ex rel. Struyf v. Second Injury Fund, 863 N.E.2d 1242, 1249 (Ind.Ct.App.2007).

I. Burden of Proof

This case requires us to review several statutes under the Act that balance the right of medical service providers to seek payment for medical care to injured workers against the right of employers to demand that such payments not be excessive. Indiana Code Section 22-3-3-5 states in part:

The pecuniary liability of the employer for medical, surgical, hospital and nurse service herein required shall be limited to such charges as prevail as provided under IC 22-3-6-1(j), in the same community (as defined in IC 22-3-6-1(h)) for a like service or product to injured persons.... The right to order payment for all services provided under IC 22-3-2 through IC 22-3-6 is solely with the board. All claims by a health care provider for payment for services are against the employer and the employer's insurance carrier, if any, and must be made with the board under IC 22-3-2 through IC 22-3-6....

"Pecuniary liability" is defined in Indiana Code Section 22-3-6-1(j) as:

the responsibility of an employer or the employer's insurance carrier for the payment of the charges for each specific service or product for human medical treatment provided under IC 22-3-2 through IC 22-3-6 in a defined community, equal to or less than the charges made by medical service providers at the eightieth percentile in the same community for like services or products.

Indiana Code Section 22-3-6-1(i) divides Indiana into eight distinct communities, by zip code.

The Act permits employers and/or their worker's compensation insurer to use a "billing review service" to calculate pecuniary liability to a medical service provider, based on the 80th percentile standard. See Ind.Code § 22-3-6-1(f). Indiana Code Section 22-3-3-5.2 sets out specific guidelines governing billing review services and states in part:

(a) A billing review service shall adhere to the following requirements to determine the pecuniary liability of an employer or an employer's insurance carrier for a specific service or product covered under worker's compensation:

(1) The formation of a billing review standard, and any subsequent analysis or revision of the standard, must use data that is based on the medical service provider billing charges as submitted to the employer and the employer's insurance carrier from the same community. This subdivision does not apply when a unique or specialized service or product does not have sufficient comparative data to allow for a reasonable comparison.

(2) Data used to determine pecuniary liability must be compiled on or before June 30 and December 31 of each year.

(3) Billing review standards must be revised for prospective future payments of medical service provider bills to provide for payment of the charges at a rate not more than the charges made by eighty percent (80%) of the medical service providers during the prior six (6) months within the same community. The data used to perform the analysis and revision of the billing review standards may not be more than two (2) years old and must be periodically updated by a representative inflationary or deflationary factor. Reimbursement for these charges may not exceed the actual charge invoiced by the medical service provider.

(4) The billing review standard shall include the billing charges of all hospitals in the applicable community for the service or product.

The central issue in this case surrounding these statutes is, in the event a billing review service claims that a medical service provider's bill has exceeded the 80th percentile standard and recommends payment of less than the billed amount, and the medical service provider decides to challenge that determination before the Board, who bears the burden of proof on whether the bill exceeds the 80th percentile standard—the medical service provider or the employer of the injured employee (or the employer's insurance company)? The statutes themselves do not directly answer this question.

It is true that the burden of proof is normally allocated to a party-plaintiff initiating a proceeding and seeking relief. Schaffer ex rel. Schaffer v. Weast, 546 U.S. 49, 57, 126 S.Ct. 528, 534, 163 L.Ed.2d 387(2005). However, "`[L]ooking for the burden of pleading is not a foolproof guide to the allocation of the burdens of proof.'" Alaska Dep't of Envtl. Conservation v. E.P.A., 540 U.S. 461, 494, 124 S.Ct. 983, 1005 n. 17, 157 L.Ed.2d 967 (2004) (quoting 2 J. Strong, McCormick on Evidence § 337, pp. 411-12 (5th ed.1999)). Among other considerations, allocations of burdens of production and persuasion may depend on which party has made an affirmative allegation or has peculiar means of knowledge of a fact. Id. Thus, we conclude that the mere fact it was Beltway who initiated a claim proceeding before the Board did not automatically place the burden of proof on it to prove that its bill fell within the 80th percentile standard.

Nor are we convinced that the general, well-established requirement that an employee seeking compensation under the Act must prove his or her entitlement to benefits applies in the much different context of this case. See Milledge v. Oaks, 784 N.E.2d 926, 929 (Ind.2003); see also I.C. § 22-3-2-2(a). That standard speaks to an employee's entitlement to...