Commonwealth Court Bars Supplier of Medical Goods from Challenging Amounts Paid Under Workers’ Compensation Through Fee Reviews

The Commonwealth Court’s groundbreaking decision has found against Scomed, ruling that suppliers of medical goods such as Scomed (as opposed to providers of healthcare services), are not “health care providers,” and as such are ineligible to challenge the amount or timing of workers’ compensation medical payments.

Background

Healthcare providers who have properly submitted bills may dispute the amount or timing of payments made by an employer or insurer through the fee review process, by filing an appropriate and timely application for fee review. In this matter, Scomed supplied the injured worker medical goods necessary for the use of a TENS unit prescribed by a physician for treatment of the work injury. After the insurer rendered payment for less than the full amount billed on multiple dates of service, Scomed sought relief through multiple fee review applications filed with the Bureau of Workers’ Compensation’s Medical Fee Review Section. At the initial level, the Medical Fee Review Section found that no payment was due beyond the amount already paid by the insurer. Following Hearing Requests challenging these determinations, the Hearing Officer concluded Scomed is not a “health care provider” as defined by Section 109 of the Workers’ Compensation Act. This effectively barred Scomed from challenging whether the amounts paid for the supplies were the appropriate amounts to be paid pursuant to the re-pricing provisions of the Act.

Commonwealth Court Opinion

In its Opinion, the Commonwealth Court ruled that suppliers of medical goods, rather than services, are not “health care providers” under Section 109. Therefore a supplier, such as Scomed in this case, lacked standing to challenge the amounts or timing of payments made through the fee review process. In reaching this result, the Court first examined the definition of “health care provider” as set forth in the Act, and in the Medical Cost Containment Regulations. The Court felt the statutory language unambiguously defined health care providers as those licensed by the Commonwealth to provide health care services, not entities which concern themselves primarily with the sale or distribution of medical goods. Although Scomed argued excluding it and similar companies out of the Fee Review process would jeopardize access to necessary medical supplies for injured workers, the Court felt the statutory language was clear.

Consequences

This decision should impact many insurance carriers, third-party administrators and self-insured employers. Countless injured workers across the Commonwealth are prescribed durable medical equipment supplied by companies that fall in the exact same position as the supplier at issue in this case. For goods such as the TENS, these supplies also generate recurring charges which often are paid by employers or insurers at amounts challenged by the supplier. This often results in multiple fee review disputes, between the same two parties (insurer and supplying company), on just one given claim. With requests prompted by insurance carriers, TPAs and self-insured employers, we can expect to see many fee review applications, or fee review hearing requests, be subject to motions to dismiss in the coming weeks and months. What remains to be seen is whether Scomed will appeal the Commonwealth Court Opinion to the Pennsylvania Supreme Court, and whether the Supreme Court will accept the appeal.

There also remains the question of what avenue, if not fee review, the supplier of medical goods can pursue? This outcome may result in increased penalty petitions, emphasizing the importance of issuing reduced but appropriate payments as opposed to non-payment for these supplies. This Opinion leaves it to the General Assembly to address any concerns regarding injured workers’ ability to access similar medical supplies and equipment. For now, employers and insurers may avoid adverse fee review decisions, but there remains the obligation to make appropriate payments pursuant to the Act and its repricing provisions.