MICHELLE A. MURRAY, Employee, v. MINNESOTA JEWISH GROUP HOME and EMPLOYERS INS. OF WAUSAU, Employer-Insurer/Appellants, and FAIRVIEW RIVERSIDE MEDICAL CTR., Intervenor.
WORKERS= COMPENSATION COURT OF APPEALS
JULY 14, 2000
MEDICAL TREATMENT & EXPENSE - FEE SCHEDULE. The compensation judge properly held the employer and insurer=s liability to Fairview Riverside Medical Center is governed by the medical fee schedule in effect in 1996. Minn. R. 5221.0500, subpart 2.D., effective December 1993, specifically applies the medical fee schedule to payments due to hospitals with more than 100 licensed beds.
MEDICAL TREATMENT & EXPENSE - EXCESSIVE CHARGE. The compensation judge properly determined that Minn. R. 5221.0500, subp. 1.A, relating to duplicate charges for the same medical services was not applicable, and that Fairview=s charges were not excessive under Minn. R. 52221.0500, subp. 2.B.(1).
INTERVENORS - EXCLUSION; SETTLEMENTS. Substantial evidence supports the compensation judge=s finding that the employer and insurer=s offer to the intervenor was so unreasonably low as to effectively exclude the intervenor from meaningful settlement negotiations, and full reimbursement of the intervenor=s claim for medical expenses was properly ordered.
Determined by: Johnson, J., Wheeler, C.J., and Pederson, J.
Compensation Judge: Gary M. Hall
THOMAS L. JOHNSON, Judge
Minnesota Jewish Group Home and Employers Insurance of Wausau appeal the compensation judge=s order that it pay Fairview Riverside Medical Center the sum of $18,782.09, plus statutory interest. We affirm.
The facts in this case are undisputed. Michelle A. Murray, the employee, injured her low back on April 21, 1986, while working for Minnesota Jewish Group Home, the employer, insured by Employers Insurance of Wausau. The employer and insurer admitted liability for the employee=s personal injury. As a result of her injury, the employee underwent multiple surgeries. The first surgeries were a laminectomy performed in 1987, followed by a single level fusion in 1991. The insurer paid these medical expenses.
The employee underwent an MRI scan on August 14, 1995 and a CT scan on October 13, 1995 at Fairview Riverside Medical Center. Thereafter, Dr. Michael Smith performed a two-level fusion. The employee was hospitalized at Fairview from October 16 through October 20, 1995. Fairview=s charges were $1,492.00 for the MRI scan, $227.53 for the CT scan, and $25,554.20 for the hospitalization, for a total bill of $27,273.73. (Pet. Ex. A, B.) The employer and insurer denied liability for the employee=s medical treatment at Fairview. At the time the treatment was provided, HealthPartners had a contract of health insurance with the employee. HealthPartners paid $4,497.56 to Fairview.
The employee filed a claim petition on February 29, 1996 seeking payment of wage loss benefits and medical expenses. The claim petition identified HealthPartners as a third party that had paid medical benefits related to the employee=s claim. (Pet. Ex. C.) At some point, HealthPartners was named an intervenor. (Judgment Roll.) The employer and insurer were aware Fairview had provided medical services to the employee. Fairview was not given notice that it had a right to intervene, and Fairview did not intervene. In December 1996, the employee, the employer and insurer and HealthPartners entered into a settlement. The employer and insurer paid a lump sum to the employee as a to-date settlement for all claims and paid $22,775.00 to HealthPartners in full satisfaction of its intervention interest. (Pet. Ex. D.)
In September 1998, the employee filed a second claim petition seeking wage loss benefits and approval for a third fusion surgery. (Pet. Ex. F.) The employer and insurer denied liability for the claimed benefits. On June 15, 1999, the employee provided Fairview with an intervention notice. (Pet. Ex. E.) Fairview filed a petition to intervene seeking reimbursement of $22,776.17 for medical expenses relating to the 1995 surgery. (Pet. Ex. G.) An order allowing intervention by Fairview was filed August 3, 1999. HealthPartners and the City of Maplewood also intervened in the case.
By letter dated August 26, 1999, counsel for Fairview demanded payment of $18,685.11, plus interest and penalties in settlement of its reimbursement claim. (Pet. Ex. H.) By letter dated September 8, 1999, counsel for the employer and insurer offered Fairview $1,000.00 to settle the intervention claim. (Pet. Ex. I.) This offer was rejected by Fairview. (Resp. Ex. F.) On December 8, 1999, counsel for Fairview asked the Office of Administrative Hearings to place the case on the trial calendar for a hearing. (Pet. Ex. L.)
In December 1999, the employee, the employer and insurer, HealthPartners and the City of Maplewood entered into a settlement agreement. The employee settled her claims on a full, final and complete basis, save and except reasonable and necessary medical treatment. HealthPartners accepted $30,088.33 in complete settlement of its intervention claim in the amount of $42,813.87. The City of Maplewood accepted $273.29 in full settlement of its intervention claim of $2,167.17 for ambulance service. A partial award on stipulation was filed December 14, 1999. (Judgment Roll.)
Fairview=s claim for reimbursement was heard by a compensation judge at the Office of Administrative Hearings on January 21, 2000. No witnesses were called to testify, but exhibits were introduced at the hearing. The parties stipulated that prior to negotiating the 1996 settlement, the employer and insurer were aware that Fairview had provided medical services to the employee. The parties further stipulated the employer and insurer did not give notice of or include Fairview in the settlement negotiations which resulted in the 1996 settlement. In a Findings and Order served and filed February 15, 2000, the compensation judge found the medical charges of Fairview were not excessive, found Fairview was excluded from the negotiations resulting in the 1996 settlement and found the employer and insurer=s 1999 offer to Fairview of $1,000.00 was so unreasonably low as to effectively exclude Fairview from meaningful settlement negotiations. Based on these findings, the compensation judge ordered the employer and insurer to pay Fairview the sum of $18,782.09, plus statutory interest. The employer and insurer appeal.
STANDARD OF REVIEW
"[A] decision which rests upon the application of a statute or rule to essentially undisputed facts generally involves a question of law which [the Workers' Compensation Court of Appeals] may consider de novo." Krovchuk v. Koch Oil Refinery, 48 W.C.D. 607, 608 (W.C.C.A.) 1993).
Amans v. Carley Foundry, Inc.
The employer and insurer argue Fairview=s charges are excessive under Amans v. Carley Foundry, Inc., 51 W.C.D. 163 (W.C.C.A. 1993). We disagree and conclude Amans is not controlling.
In Amans, the employee was injured in 1991 and received medical care at Health One Unity Hospital in July 1992. The workers= compensation insurer contended the hospital=s charge was excessive because it exceeded what the hospital would have accepted from a private health insurer had the injury not been work related. On appeal, this court held the workers= compensation insurer=s liability to Unity Hospital could not exceed the lowest amount the hospital would have accepted from a private insurer or other payer. Under the version of Minn. R. 5221.0500 then in effect, however, Unity Hospital=s charges were not governed by the medical fee schedule. See Boedingheimer v. Lake Country Transp., 485 N.W.2d 917, 46 W.C.D. 646 (Minn. 1992). Since the Amans decision, the applicable statutes and rules have been amended. Minn. R. 5221.0500, subp. 2.D., effective December 1993, now governs payment to hospitals with more than 100 licensed beds. Accordingly, Amans is not controlling here. Rather, the appellant=s liability to Fairview is governed by the medical fee schedule in effect in 1996.
The appellant next contends Fairview=s reimbursement claim is excessive under Minn. Stat. ' 176.136, subd. 2, which states, in part: AA charge for a health service or medical service is excessive if it . . . (4) is otherwise deemed excessive or inappropriate pursuant to the rules adopted pursuant to this chapter.@ Minn. R. 5221.0500, subp. 1.A., states that a charge for a medical service provided to an employee is excessive and the payer is not liable if Athe charge wholly or partially duplicates another charge for the same service, article, or supply, such that the charge has been paid or will be paid in response to another billing . . . .@ Fairview apparently submitted its charges of $27,273.73 to HealthPartners and was paid $4,497.56. Appellant contends that under the cited statute and rule, Fairview=s unpaid charges are excessive and the compensation judge=s finding to the contrary is clearly erroneous. We are not persuaded.
Minn. R. 5221.0500, subp. 1.A., refers to duplicate charges for the same medical service, article or supply. There is no evidence, nor does appellant assert, the reimbursement claim of Fairview contains duplicate charges for the same service, article or supply. The rule does not, as appellant argues, limit an employer=s liability for treatment provided an employee to the amount paid a medical provider by a health insurer. Rather, an employer=s liability is limited to 85 percent of the provider=s Ausual and customary charge@ which is defined as Athe amount actually billed by the health care provider to all payers for the same service, whether under workers= compensation or not, and regardless of the amount actually reimbursed under a contract or government payment system.@ Minn. R. 5221.0500, subp. 2.B.(1). See Spaeth v. Cold Spring Granite Co., 560 N.W.2d 92, 56 W.C.D. 136 (Minn. 1996). Accordingly, Minn. R. 5221.0500, subp. 1.A. is not applicable.
Offer to Intervenor
Fairview=s petition to intervene was granted on August 3, 1999. Thereafter, Fairview demanded payment of $18,685.11 in settlement of its reimbursement claim. Wausau offered Fairview $1,000.00 to settle the intervention claim. The compensation judge found the employer and insurer=s $1,000.00 offer was Aso unreasonably low as to effectively exclude the intervenor from meaningful settlement negotiations.@ (Finding 4.) Accordingly, the compensation judge ordered the employer and insurer to reimburse Fairview the sum of $18,782.09, plus interest. The employer and insurer contend the compensation judge=s findings and order are contrary to law.
Under Parker-Lindberg v. Friendship Village, 395 N.W.2d 713, 39 W.C.D. 125 (Minn. 1986), an intervenor may be entitled to full reimbursement of its claim if the employer and insurer=s offer to the intervenor was so unreasonably low as to effectively exclude the intervenor from the settlement proceedings. Whether the offer to the intervenor was unreasonably low is generally a question of fact for the compensation judge.
In this case, the employer and insurer admitted the employee=s 1995 surgery at Fairview was reasonable, necessary and causally related to the employee=s personal injury. Its only defense to Fairview=s intervention claim was its assertion that Fairview=s charges were excessive under Minn. R. 5221.0500 and under Amans. The appellant asserted these defenses at the January 21, 2000 hearing. The compensation judge rejected both these defenses and this court has affirmed the compensation judge=s decision. Since Wausau had no valid defense to Fairview=s reimbursement claim, its $1,000.00 settlement offer was unreasonably low. The compensation judge could reasonably conclude Fairview was effectively excluded from the settlement proceedings. Full reimbursement was, therefore, properly ordered. See Brooks v. A.M.F., Inc., 278 N.W.2d 310, 31 W.C.D. 521 (Minn. 1979).
Minn. Stat. ' 176.135 requires the employer to furnish such medical treatment as may reasonably be required to cure and relieve the employee from the effects of the injury. Minnesota Jewish Group Home/Wausau contended they were not liable for the medical expenses at Fairview Hospital because Fairview=s charges were excessive under Minn. Stat. ' 176.136, subd. 2, and the medical fee schedule. Although styled by the parties as a Parker-Lindberg hearing, the January 21, 2000, hearing was also a hearing on Fairview=s action for Arecovery of amounts deemed excessive by the employer or insurer.@ Minn. Stat. ' 176.136, subd. 2. The employer and insurer were afforded an evidentiary hearing on the merits of its defenses to Fairview=s reimbursement claim. The compensation judge found Fairview=s charges were not excessive and we affirm that finding. The compensation judge, therefore, properly ordered payment of Fairview=s its full reimbursement claim.
Fee Schedule Amount
Finally, the appellants contend they do not owe Fairview $18,782.09 as awarded by the compensation judge. The employer and insurer assert Fairview provided no substantiation of how the fee schedule was applied to its charges and contends Fairview failed to prove its reimbursement claim. We reject this argument.
The transcript of the hearing before the compensation judge consists only of a discussion of the issues and arguments of counsel. Fairview=s counsel stated Fairview was Aclaiming $18,872.09 which is the total charges reduced by the fee schedule and, again, reduced by the amount that we received from the health insurance carrier.@ (T. 15.) Fairview Exhibit A is a compilation of Fairview=s charges; Exhibit B is a claim summary reflecting the total charges, reductions per the fee schedule and a reduction for the insurance payment. These exhibits were admitted in evidence without objection. (T. 6-9.) Counsel for the employer and insurer never contended Fairview=s reimbursement claim was inaccurate, overstated or not in accordance with the fee schedule. Since the argument was not raised before the compensation judge, this court will not consider it on appeal. See Minn. R. 9800.0900, subp. 1.
 The employee did undergo the fusion surgery in February 1999.
 Counsel stated Fairview=s total bill from 1995 was $27,273.73. Fairview sought $18,685.11 after reducing the bill by 85% in accordance with the fee schedule and deducting HealthPartner=s payment of $4,497.56.
 The fee schedule established by Minn. R. 5221.0500(A) (1991) applied only to semi-private room rates.
 Since we affirm the compensation judge=s findings under the Parker-Lindberg doctrine, and Minn. Stat. ' 176.136, subd. 2, we do not deal with the appeal of the compensation judge=s finding that Fairview is entitled to full reimbursement because it was excluded from the negotiations resulting in the 1996 settlement.