JANET L. STILLSON, Employee/Cross-Appellant, v. HOLIDAY CO. and RELIANCE INS. CO./CRAWFORD & CO., Employer-Insurer/Appellants.
WORKERS= COMPENSATION COURT OF APPEALS
AUGUST 11, 2000
MEDICAL TREATMENT & EXPENSE - CHIROPRACTIC TREATMENT. Substantial evidence, including the employee=s testimony as to her relief, adequately supported the compensation judge=s decision that the disputed chiropractic treatment was reasonable and necessary under case law standards.
MEDICAL TREATMENT & EXPENSE - TREATMENT PARAMETERS; RULES CONSTRUED - MINN. R. 5221.6050, SUBP. 9.C.(3);. An insurer that fails to comply with Minn. R. 5221.6050, subp. 9.C.(3), requiring a review, on request, of a denial of treatment authorization, may not use the limits set by the treatment parameters as a defense against a claim for treatment.
PERMANENT PARTIAL DISABILITY - SUBSTANTIAL EVIDENCE. Substantial evidence, including notations of muscle spasm in the employee=s treatment records, supported the compensation judge=s decision that the employee has a 3.5% whole body impairment pursuant to Minn. R. 5223.0390, subp. 3.B.
Determined by Wilson, J., Johnson, J., and Pederson, J.
Compensation Judge: Patricia J. Milun
DEBRA A. WILSON, Judge
The employer and insurer appeal from the compensation judge=s award of chiropractic treatment expenses, contesting both the judge=s jurisdiction to issue the award and her finding of compensability. The employer and insurer also appeal from the judge=s decision that the employee has a 3.5% whole body impairment as a result of her work-related injury. We affirm.
On July 11, 1998, the employee was involved in a work-related motor vehicle accident while employed by Holiday Company [the employer]. That same day, she consulted Keith Johnson, D.C., for complaints including sharp pain in her neck and shoulder blade area and a slight pressure in her low back. Dr. Johnson took the employee off work for three days and began providing chiropractic treatments to the employee=s neck and back, including electrical muscle stimulation, deep tissue massage, and adjustments. After her three days off, the employee returned to her job with a twenty-pound lifting restriction. Although she continued to treat with Dr. Johnson on a regular basis, she missed no further time from work for any symptoms related to her accident.
On February 1, 1999, Dr. Johnson wrote to the insurer, indicating that he was recommending continued myofascial release therapy for the employee, once a week, explaining why such treatment was appropriate and that the employee would be reevaluated again in six weeks. In response, Denise Wolleat, the insurer=s workers= compensation adjuster, informed Dr. Johnson, by letter dated February 8, 1999, Athat effective the date of this letter I will no longer authorize any further treatment,@ indicating that, because the employee had missed only three days of work and the doctor=s treatment had already Agone well beyond the treatment parameters of 12 weeks,@ the Acontinued treatment is unreasonable or unnecessary.@ Ms. Wolleat further indicated that she would Aalso assess MMI at this time,@ inviting Dr. Johnson to contact her with any questions he might have. On that same date, Ms. Wolleat wrote to the employee, enclosing a copy of her letter to Dr. Johnson and notifying the employee in part that she (Ms. Wolleat) Amust assess MMI based on the fact that you have been back to work since June 98.@
About a week later, on February 16, 1999, Dr. Johnson wrote again to Ms. Wolleat, explaining in more detail his reasons for recommending additional treatment, indicating that the employee had in fact not reached maximum medical improvement [MMI], and asking for reconsideration of the decision to terminate treatment benefits. Dr. Johnson apparently received no response to his letter but nevertheless continued to provide the employee with ongoing care, notifying the insurer again in March and May of 1999 of his continued recommendations for additional myofascial release therapy.
On June 16, 1999, the employee filed a medical request, seeking payment for Dr. Johnson=s treatment after February 8, 1999. About a month later, on July 13, 1999, a Notice and Order for Administrative or Settlement Conference was served, setting a conference for August 30, 1999, to be held before a ACompensation Judge of the Workers= Compensation Division.@ The employer and insurer filed their medical response on August 4, 1999, alleging that Dr. Johnson=s treatment had been Aexcessive and unduly prolonged@ and that the treatment did not conform to the limitations prescribed by the treatment parameters.
The August 30, 1999, conference was held before Judge Jacob Forsman, a compensation judge with the Office of Administrative Hearings [OAH], St. Paul Settlement Division. In an order entitled ADecision and Order Pursuant to Minn. Stat. ' 176.106,@ issued September 2, 1999, Judge Forsman concluded that the employee had not proven that the disputed treatment qualified for a departure from the applicable treatment parameters. The order also specified that any party aggrieved by the decision Amay file a request for formal hearing by filing the request with the Commissioner@ within 30 days and that the request would then be referred to OAH for a de novo hearing before a compensation judge.
The employee filed a request for formal hearing, with the commissioner, on September 24, 1999. About a month later, on October 26, 1999, the employee filed a claim petition, seeking benefits for a 19.5% whole body impairment, in accordance with the opinion of Dr. Johnson. At the same time, the employee filed a motion for consolidation, seeking consolidation of her claim petition with the pending request for formal hearing. As a result of the employee=s motion and with the agreement of the employer and insurer, a hearing on the request for formal hearing, originally set for November 17, 1999, was continued to the next available date.
No formal order for consolidation was ever issued; however, the parties agreed to try both the medical dispute and the permanency claim when the hearing was finally held on January 14, 2000, before Judge Patricia Milun, a compensation judge at OAH. Evidence submitted at this hearing included Dr. Johnson=s treatment records and reports; correspondence between Ms. Wolleat and Dr. Johnson; a report from Dr. Bruce Van Dyne, the employer and insurer=s independent medical examiner; a report from Dr. Perry Krantz, the employer and insurer=s independent chiropractic examiner; and the employee=s testimony as to the June 11, 1998, accident, her treatment by Dr. Johnson, and the nature of her symptoms. In addition to contesting the employee=s claims for chiropractic care and permanent partial disability benefits, the employer and insurer alleged that Judge Milun lacked jurisdiction to consider the treatment expense claim.
In a decision issued on March 3, 2000, Judge Milun ruled that she had jurisdiction to hear the contested issues, that the disputed chiropractic care was compensable, and that the employee had a 3.5% whole body impairment as a result of her June 11, 1998, work injury. The employer and insurer appeal and the employee cross-appeals.
STANDARD OF REVIEW
In reviewing cases on appeal, the Workers= Compensation Court of Appeals must determine whether Athe findings of fact and order [are] clearly erroneous and unsupported by substantial evidence in view of the entire record as submitted.@ Minn. Stat. ' 176.421, subd. 1 (1992). Substantial evidence supports the findings if, in the context of the entire record, Athey are supported by evidence that a reasonable mind might accept as adequate.@ Hengemuhle v. Long Prairie Jaycees, 358 N.W.2d 54, 59, 37 W.C.D. 235, 239 (Minn. 1984). Where evidence conflicts or more than one inference may reasonably be drawn from the evidence, the findings are to be affirmed. Id. at 60, 37 W.C.D. at 240. Similarly, A[f]actfindings are clearly erroneous only if the reviewing court on the entire evidence is left with a definite and firm conviction that a mistake has been committed.@ Northern States Power Co. v. Lyon Food Prods., Inc., 304 Minn. 196, 201, 229 N.W.2d 521, 524 (1975). Findings of fact should not be disturbed, even though the reviewing court might disagree with them, Aunless they are clearly erroneous in the sense that they are manifestly contrary to the weight of the evidence or not reasonably supported by the evidence as a whole.@ Id.
A[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).
The employer and insurer begin their argument as to jurisdiction by noting that Minn. Stat. ' 176.106, governing administrative conferences for medical and rehabilitation disputes, contemplates that conferences be held before the Commissioner of the Department of Labor and Industry, or his or her Adesignee.@ In this case, the administrative conference was held by Judge Jacob Forsman, who was then and is now a compensation judge of the St. Paul Settlement Division of OAH. Accordingly, the employer and insurer argue, Judge Forsman was not the commissioner=s designee, and the subsequent hearing before Judge Milun, another OAH judge, was improper because A[t]he procedure set forth in the statute does not authorize or provide for an initial review by a judge of the Office of Administrative Hearings together with a subsequent review of the same issue by another judge of the Office of Administrative Hearings.@ Therefore, the employer and insurer contend, the employee should have appealed from Judge Forsman=s decision directly to this court, and they assert that Judge Milun had no jurisdiction or authority to hear the request for formal hearing. We are not persuaded.
Prior to 1998, judges at the department had different authority and functions than judges at OAH. However, in 1998 the legislature directed OAH to establish a settlement division, and it expressly transferred all judges from the department to OAH as well as transferring Aall powers and duties assigned to the workers= compensation judges at the department . . . from the commissioner . . . to the chief administrative law judge in [OAH].@ Act of Apr. 2, 1998, ch. 366, '' 80, 81, 1998 Minn. Laws 622, 662-63. The legislation also gave the chief administrative law judge the authority to assign the transferred powers and duties to judges in the settlement division of OAH, including the power to Aconduct administrative conferences@ and to issue orders regarding medical disputes. Id., ' 81, subd. 1(9), 1998 Minn. Laws 622, 663. In addition, the legislature directed the commissioner to refer medical disputes to the settlement division of OAH for administrative conferences. Id., ' 81, subd. 2.
While transferring compensation judges and authority from the department to OAH, the legislature failed to make any pertinent language changes to Minn. Stat. ' 176.106, which continues to refer to administrative conferences held by the commissioner=s designee. However, pursuant to Minn. Stat. ' 176.445(2) (1998), A[t]he commissioner may delegate authority only to compensation judges to make determinations under the procedure in section 176.106, 176.238, and 176.239 . . . ,@ and all compensation judges are now at OAH. Minn. Stat. ' 176.445(2) (emphasis added). Moreover, nothing in the act indicates any legislative intent to abolish the process by which a party dissatisfied with a decision from an administrative conference may request a hearing before a judge at OAH. It is not, contrary to the employer and insurer=s allegation, a process by which the second judge Areview[s] a decision of another judge@ at OAH; the second proceeding is entirely de novo. Finally, as we have noted in the past, this court is not in any event able to review decisions issued after administrative conferences because there is no formal evidentiary record of those proceedings. See, e.g., Alberts v. Midwest Nat=l, 57 W.C.D. 189 (W.C.C.A. 1997); Bild v. Independent School Dist. #625, slip op. (W.C.C.A. Apr. 23, 1999).
The net effect of the applicable statutory amendments is that compensation judges act as the commissioner=s designee for purposes of administrative conferences and resulting decisions under Minn. Stat. ' 176.106. Therefore, the procedure followed here was the procedure contemplated by the 1998 legislation, and Judge Milun had jurisdiction to hear the employee=s request for formal hearing on the chiropractic treatment dispute.
The employee received about twenty-eight chiropractic treatments between February 8, 1999, and December 29, 1999, the period for which payment is in question here. Issues concerning the compensability of this care included general reasonableness and necessity, whether the treatment qualified for a departure from the applicable treatment parameters, whether the treatment was otherwise compensable under Jacka v. Coca Cola Bottling Co., 580 N.W.2d 27, 58 W.C.D. 395 (Minn. 1998); Asti v. Northwest Airlines, 588 N.W.2d 737, 59 W.C.D. 59 (Minn. 1999), and the effect, if any, of the insurer=s alleged failure to comply with certain requirements of the treatment parameters. In her decision, the judge concluded that the disputed treatment was reasonable and necessary, that it did not qualify for a departure under the rules, that, under Jacka and Asti, the treatment was compensable, and that the insurer=s noncompliance with the rules was essentially irrelevant to its liability for payment. Based on her application of Jacka and Asti, the judge ordered the employer and insurer to pay for Dr. Johnson=s treatment.
The employer and insurer contend initially that substantial evidence does not support the judge=s conclusion that the disputed treatment was reasonable and necessary under case law standards. We view this as a close case. However, as the compensation judge noted, the employee testified that the treatment helped to alleviate her symptoms, and she missed only three days from work after her injury. We also note that the frequency of treatment decreased over time, particularly during the period at issue. It may be true that the chiropractic treatment notes themselves do not particularly support the conclusion that the disputed treatment resulted in any substantial objective improvement in the employee=s condition, and Dr. Kranz, D.C., who examined the employee on the employer and insurer=s behalf in August of 1999, indicated that the care in question was excessive and unnecessary. However, whether treatment is reasonable and necessary under case law standards is a question of fact, and the employee=s testimony and the other factors cited by the compensation judge minimally but adequately support the judge=s decision on this issue.
The more difficult question in this matter concerns the effect of the permanent treatment parameters and related case law. It is undisputed that the employee=s chiropractic care after February 8, 1999, exceeded the durational limits on passive care contained in Minn. R. 5221.6200, subp. 3, and the record supports the judge=s decision that that treatment does not qualify for a departure pursuant to Minn. R. 5221.6050, subp. 8. The compensation judge, however, concluded that the disputed treatment was nevertheless compensable under Asti and Jacka, because Athe treatments maintain the employee=s functional status for full-time work activities.@ The employer and insurer contend that the judge erred in awarding the treatment expenses on this basis, and we agree that the judge=s application of Asti and Jacka is problematic, at least on this record. Both Jacka and Asti specify that departures from the parameters should be reserved for Athose rare cases in which departure is necessary to obtain proper treatment.@ Asti, 588 N.W.2d 737, 740, 59 W.C.D. 59, 64, quoting Jacka, 580 N.W.2d at 35-36, 58 W.C.D. at 408 (emphasis in Asti). The present record contains little or no evidence to differentiate this case from any other disputed chiropractic expense claim. Perhaps as importantly, we have stressed that Aany decisions applying the >rare case= exception of Jacka should be carefully considered and explained in detail.@ Martin v. Xerox, 59 W.C.D. 509, 517 (W.C.C.A. 1999) (emphasis added). Here, the judge=s finding quoted above is essentially the only explanation for her decision. However, whatever concerns we might have about the judge=s application of Asti and Jacka, we conclude that there is another basis in the record that justifies the judge=s ultimate award.
In his letter to the insurer dated February 1, 1999, Dr. Johnson recommended additional treatment. By letter dated February 8, 1999, Ms. Wolleat, claims adjuster for the insurer, indicated that no further treatment would be authorized. She did not, however, Ainclude notice to . . . the health care provider of the reason why the information given by the health care provider . . . does not support the treatment proposed, along with notice of the right to review of the denial,@ as specified by the relevant rules. Minn. R. 5221.6050, subp. 9C (emphasis added). More importantly, the insurer admittedly failed to respond in any way to Dr. Johnson=s two-page letter of February 16, 1999, asking for reconsideration of the denial.
Pursuant to Minn. R. 5221.6050, subp. 9C(3),
(3) If the insurer denies authorization, the health care provider or employee may orally or in writing request that the insurer review its denial of authorization.
The insurer=s review of its denial must be made by a currently licensed registered nurse, medical doctor, doctor of osteopathy, doctor of chiropractic, or a person credentialled by a program approved by the commissioner of Labor and Industry. The insurer may also delegate the review to a certified managed care plan under subpart 10. In lieu of or in addition to the insurer=s review under this subitem, the insurer may request an examination of the employee under subitem (4), (5), or (6) and the requirements of those subitems apply to the proposed treatment. Unless an examination of the employee is requested under subitem (4), (5), or (6), the insurer=s determination following review must be communicated orally or in writing to the requestor within seven working days of receipt of the request for review.
(Emphasis added.) The compensation judge concluded that the insurer=s failure Ato respond to [Dr. Johnson=s] request for reconsideration after the written denial is not a condition for a departure under [Minn. R.] 5221.6050, Subp. 9C.@ In her cross-appeal, the employee contends that the insurer=s failure to respond to Dr. Johnson=s request for review Ashould act to remove the determination of reasonableness and necessity from the purview of the treatment parameters.@ After considering the rights and obligations imposed on all parties by the parameters, we agree with the employee=s position.
We acknowledge, initially, that the rule quoted above specifies no consequences for an insurer=s failure to comply. However, the language of the rule is mandatory. Furthermore, as we have suggested in the past, this particular provision is not merely technical or procedural but is intended to Aensure that payment for proposed treatment is not denied arbitrarily by nonmedical personnel,@ such as Ms. Wolleat. Olson v. Allina Health System, 59 W.C.D. 37, 47 (W.C.C.A. 1999). If a treatment provider is expected to comply with the parameters in order to receive payment for care not ordinarily authorized by those rules, seeid., so too should a workers= compensation insurer be required to comply with the rules in those cases where the insurer proposes to rely on the rules in disputes over the compensability of treatment. This is especially true because the limits established by the parameters are a defense to treatment claims. See, e.g., Dawson v. University of Minn., slip op. (W.C.C.A. May 6, 1999).
The insurer offered no explanation or evidence in mitigation of its failure to comply with the treatment parameters. Therefore, we hold that, having failed to provide a review of its denial as required by Minn. R. 5221.6050, subp. 9C(3), the insurer may not invoke the parameters in defense against the employee=s claim for Dr. Johnson=s treatment. Accordingly, because we have already affirmed the judge=s reasonableness and necessity decision under case law standards, we affirm her award of expenses.
Permanent Partial Disability
The compensation judge concluded that the employee had sustained a cervical and lumbar musculoligamentous strain as a result of the June 11, 1998, accident. Noting that Dr. Johnson=s examination notes revealed lumbar muscle spasm on more than one occasion after February 8, 1999, the judge concluded that the employee was entitled to benefits for a 3.5% whole body impairment pursuant to Minn. R. 5223.0390, subp. 3B, which is applicable to lumbar pain syndrome and provides as follows:
B. Symptoms of pain or stiffness in the region of the lumbar spine, substantiated by persistent objective clinical findings, that is, involuntary muscle tightness in the paralumbar muscles or decreased range of motion in the lumbar spine, but no radiographic abnormality, 3.5 percent.
The employer and insurer contend that Dr. Johnson=s treatment notes contain a reference to lumbar spasm only once during the period of disputed treatment. As such, they argue, the compensation judge should have accepted the examination findings and opinion of Dr. Van Dyne, who indicated that the employee had no permanent impairment as a result of her work injury.
Notes from Dr. Johnson=s lumbar spine examinations reflect findings of spasm on June 11, 1998, July 15, 1998, August 31, 1998, October 15, 1998, December 8, 1998, and March 25, 1999. Moreover, in his report of August 24, 1999, Dr. Johnson indicated that the employee had continued to experience Amuscle spasms of the . . . lumbar paravertebral@ area through that date, and in his October 7, 1999, report, Dr. Johnson reported that the employee=s Alumbar spine reveals a diminished lumbar ROM [and] involuntary muscle spasms.@ The compensation judge was entitled to rely on this evidence in concluding that the employee=s condition warranted a 3.5% rating under the rule quoted above. A finding of permanent partial disability is one of ultimate fact, see Jacobowitch v. Bell & Howell, 404 N.W.2d 270, 39 W.C.D. 771 (Minn. 1987), and, finding substantial evidence in the record as a whole to support it, we affirm the judge=s award.
 The accident occurred while the employee was traveling on Highway 100. The car in front of the employee stopped short, and, while the employee applied the brakes, she was unable to stop in time to avoid a collision.
 Minn. Stat. ' 176.106, entitled AAdministrative conference,@ applies to A[a]ll determinations by the commissioner or the commissioner=s designee pursuant to section 176.102, 176.103, 176.135, or 176.136.@ Minn. Stat. ' 176.106, subd. 1. Subdivision 4 of Minn. Stat. ' 176.106 directs the commissioner=s designee to determine the issues in dispute based upon the information available at the conference; subdivision 5 contains certain requirements for the written decision to be issued by the commissioner=s designee; subdivision 7 covers procedures to be followed in the event a party is aggrieved by the decision of the commissioner=s designee; and subdivisions 8 and 9 cover the commissioner=s authority to make decisions in cases where primary liability is denied or where medical causation is at issue.
Minn. Stat. ' 176.011, subd. 27, provides as follows:
Subd. 27. Administrative conference. An Aadministrative conference@ is a meeting conducted by a commissioner=s designee where parties can discuss on an expedited basis and in an informal setting their viewpoints concerning disputed issues arising under section 176.102, 176.103, 176.135, 176.136, or 176.239. If the parties are unable to resolve the dispute, the commissioner=s designee shall issue an administrative decision under section 176.106 or 176.239.
 Except where the amount of the medical dispute was $1,500 or less. See Minn. Stat. ' 176.106, subd. 7 (1998), which provided that the commissioner shall review a decision of the commissioner=s designee regarding a claim for a medical benefit of $1,500 or less and that Athe commissioner=s decision shall be final.@ The language in this provision concerning medical disputes of $1,500 or less was deleted by 2000 legislation.
 See, e.g., Horst v. Perkins Restaurant, 45 W.C.D. 9 (W.C.C.A. 1991), and Field-Seifert v. Goodhue County, slip op. (W.C.C.A. Mar. 5, 1990) (factors potentially relevant to treatment disputes).
 The employee was seen six times in February of 1999; four times in March of 1999; four times in April of 1999; three times in May of 1999; three times in June of 1999; twice in July of 1999; twice in August of 1999; not at all in September of 1999; once in October of 1999; four times in November of 1999 (for an aggravation), and once in December of 1999.
 Pursuant to Minn. R. 5221.6200, subp. 3, the use of passive treatment modalities, including chiropractic care, is generally not indicated beyond 12 weeks after initiation. Id., subd. 3A. An additional 12 treatments may be appropriate under certain conditions. Id., subp. 3B. The treatment at issue here exceeded the so-called A12 plus 12@ allowable under the rules.
 Grounds for departure listed in Minn. R. 5221.6050, subp. 8, include a documented medical complication; where previous treatment did not meet accepted standards of practice; where treatment is necessary to assist in the initial return to work; where there is evidence in the medical records of specified indicia of improvement; or where there is an incapacitating exacerbation.
 Cf. Minn. R. 5221.6050, subp. 9C(1) and (2) (if an insurer fails to respond to prior notification of proposed treatment within seven days, authorization is Adeemed@ to have been given, and the insurer may not later deny payment).