JASON P. HOVE, Employee, v. COCA COLA BOTTLING CO. and SFM MUT. INS. CO., Employer-Insurer, and ST. JOSEPH’S HOSP./HEALTHEAST, Intervenor/Appellant.
WORKERS’ COMPENSATION COURT OF APPEALS
JULY 30, 2009
JURISDICTION - SUBJECT MATTER. An order obligating an employer and insurer to pay the reasonable value of medical treatment, services, and supplies, where the determination of that value has not been made, is not an order affecting the merits of the case, and is not, therefore, appealable to the Workers’ Compensation Court of Appeals under Minn. Stat. § 176.421, subd. 1.
Determined by: Johnson, C.J., Rykken, J., and Pederson, J.
Compensation Judge: Janice M. Culnane
Attorneys: Andrew W. Lynn, Lynn, Scharfenberg & Assocs., Minneapolis, MN, for the Respondents. Todd J. Thun, Thun Law Office, Minneapolis, MN, for the Appellant.
THOMAS L. JOHNSON, Judge
St. Joseph’s Hospital/HealthEast appeals the compensation judge’s finding that the obligation of Coca Cola Bottling Company and SFM Mutual Insurance Company to St. Joseph’s Hospital/HealthEast for the employee’s surgical procedure performed on January 30, 2007, is the reasonable value of those services not to exceed 85% of the usual and customary charges for similar treatment. We conclude the compensation judge’s decision is not appealable under Minn. Stat. § 176.421.
On February 7, 2005, Jason P. Hove, the employee, sustained a personal injury arising out of his employment with Coca Cola Bottling Company, the employer, then insured by SFM Mutual Insurance Company. The employer and its insurer admitted liability for the employee’s personal injury.
In January 2007, the employee underwent an anterior lumbar interbody fusion utilizing a surgical cage implant manufactured by Synthes at St. Joseph’s Hospital/HealthEast, hereafter HealthEast. The parties stipulated the surgery was reasonable, necessary, and causally related to the employee’s personal injury. HealthEast billed the employer and insurer $58,020.60 for the implant and accompanying hardware incorporated in the employee’s surgery. This charge was the usual and customary charge of HealthEast for the implants and hardware, which charge reflected a markup in an amount undisclosed in the record. The employer and insurer have not established a prevailing charge for the hardware and implants involved in the case. HealthEast bills all its patients a single, identical, usual and customary charge for a specific medical service or supply. However, the amount HealthEast agrees to accept as payment for that medical service or supply will vary, depending upon applicable state or federal statutes and rules or applicable contracts in effect between it and private medical insurance companies.
The insurer paid HealthEast the sum of $8,703.09 for the implants and hardware. HealthEast then filed a Medical Request seeking payment of the unpaid balance. The case was heard by a compensation judge on stipulated facts pursuant to Minn. Stat. § 176.322. The sole issue presented to the compensation judge for determination was:
Whether or not the compensation judge has independent authority to make a determination as to what would be a reasonable charge for the implants and hardware used in this case at less than 85% usual and customary limitation referenced herein, or whether instead, St. Joseph’s Hospital/HealthEast Care System is entitled to payment of $49,317.51, which represents the remainder of its unpaid 85% usual and customary charges for the implants and hardware at issue in this case.
In a Findings and Order served and filed April 9, 2009, the compensation judge found that the employer and insurer’s obligation to HealthEast for the surgical procedure performed on January 30, 2007, may not exceed 85% of the provider’s usual and customary charge for similar treatment, articles and supplies. See Minn. Stat § 176.136, subd. 1b. The compensation judge found that 85% of the usual and customary charge is not to be assumed to be the amount HealthEast is owed, without consideration to, and a determination of, the reasonable value of the services provided to the employee. Finally, the compensation judge found that a determination of the actual amount the employer and insurer owed HealthEast was a factual determination to be made in a later proceeding. HealthEast appeals the compensation judge’s decision.
Appeals to the Workers’ Compensation Court of Appeals are governed by Minn. Stat. § 176.421, subd. 1, which provides that a party may appeal to this court “within 30 days after a party in interest has been served with notice of an award or disallowance of compensation, or other order affecting the merits of the case.” As a general rule, an order is appealable only if it “finally determines rights of the parties and concludes the action.” Hagen v. Hoffman Aseptic Packaging, slip op. (W.C.C.A. May 8, 1997) (citing Zizak v. Despatch Indus., Inc., 427 N.W.2d 755, 756 (Minn. App. 1988)). The policy behind the general rule is to prevent piecemeal appeals and protect the rights of all parties until all claims have been adjudicated in the trial court. Johnson v. Johnson, 363 N.W.2d 355, 357 (Minn. App. 1985) (citing Comment, Minn. R. Civ. App. P. 104.01), pet. for rev. denied (Minn. May 6, 1985). Orders which do not affect the merits of the case or do not prevent a later determination of the case on the merits, are not appealable to this court. Mierau v. Alcon Indus., Inc., 386 N.W.2d 741, 38 W.C.D. 652 (Minn. 1986).
“The existence of a justiciable controversy is prerequisite to adjudication. The judicial function does not comprehend the giving of advisory opinions. No controversy is presented, absent a genuine conflict in the tangible interests of opposing litigants.” Izaak Walton League of Am. Endowment, Inc., v. State, Dep’t of Natural Resources, 312 Minn. 587, 589, 252 N.W.2d 852, 854 (1977). The existence of a justiciable controversy may be raised on the court’s own motion since it is essential to a court’s exercise of jurisdiction. Makitalo v. Sears, Roebuck & Co., slip op. (W.C.C.A. May 9, 1995).
The appellate courts have used a three-part test in determining whether an issue presented for a decision constitutes a justiciable controversy. The issue must (1) involve definite and concrete assertions of right by parties with adverse interests, (2) involve a genuine conflict in tangible interests of opposing litigants, and (3) be capable of relief by decree or judgment. Graham v. Crow Wing County Bd. of Comm’rs, 515 N.W.2d 81, 84 (Minn. App. 1994) (citing St. Paul Area Chamber of Commerce v. Marzitelli, 258 N.W.2d 585, 587 (Minn. 1977), pet. for rev. denied (Minn. June 2, 1994). This test appears to have originated in cases involving declaratory judgment actions under Minn. Stat. Ch. 555 which gives courts of record the “power to declare rights, status, and other legal relations whether or not further relief is or could be claimed.” Minn. Stat. § 555.01. See also Seiz v. Citizens Pure Ice Co., 207 Minn. 277, 290 N.W. 802 (1940). The test has, however, also been utilized in cases not arising under the declaratory judgment statute. See, e.g., Rosenfeld v. Rosenfeld, 529 N.W.2d 724 (Minn. App. 1995). This three-part test has been cited in cases involving the issue of whether an appeal to the W.C.C.A. presented a justiciable controversy. See, e.g., Carlson v. Donovan Constr. Co., 62 W.C.D. 72, 78 (W.C.C.A. 2001), summarily aff’d (Minn. Feb. 5, 2002).
In Johnson v. Apple Valley Health Care Ctr., No. WC04-195 (W.C.C.A. 2004), a party appealed the compensation judge’s pretrial order determining the nature of the proceedings to be held before the compensation judge, including a statement of the burden of proof and a determination of the party upon whom the burden of proof rested. On appeal from the compensation judge’s pretrial order this court concluded the appeal was premature and held the court lacked subject matter jurisdiction over the appeal. In Davidson v. Northshore Mfg. Co., 60 W.C.D. 69 (W.C.C.A. 1999), summarily aff’d (Minn. Nov. 14, 2000), the employee filed a rehabilitation request not to obtain retraining benefits but to preserve his rights to retraining benefits should he decide to pursue retraining at some time in the future. That is, the employee sought guidance as to how the requirements of Minn. Stat. § 176.102, subd. 11(c), might be satisfied. On appeal, this court concluded that nothing in the Workers’ Compensation Act allowed for either advisory opinions or declaratory judgments. Since the issue was not ripe, and no benefits were yet at stake, the decision of the compensation judge was vacated as premature and the appeal was dismissed. See Herrly v. Walser Buick, Inc., 47 W.C.D. 670 (W.C.C.A. 1992); see also Froland v. American Hardware Ins. Co., slip op. (W.C.C.A. Oct. 10, 1996).
In this case, there has been no award or disallowance of compensation or other order affecting the merits of the case and no benefits are yet at stake. The compensation judge’s decision does not determine the rights of the parties or conclude the action. Rather, the parties seek only a legal interpretation of Minn. Stat. § 176.136, subd. 1b(b). The parties are requesting an advisory opinion and no justiciable controversy exists. The appeal of HealthEast is, therefore, dismissed. The case is remanded to the Office of Administrative Hearings to schedule an evidentiary hearing on the claim of HealthEast.
 The matter was submitted to the compensation judge based upon stipulated facts. No witnesses were called and no testimony was taken by the compensation judge.
 By Order dated October 13, 2008, the employer and insurer were precluded from seeking, through discovery, any financial information from the hospital as to the invoice cost of the surgical cage and hardware.
 Minn. Stat. § 176.136, subd. 1b.(b) provides:
The liability of the employer for the treatment, articles, and supplies that are not limited by subdivision 1a or 1c or paragraph (a) shall be limited to 85 percent of the provider’s usual and customary charge, or 85 percent of the prevailing charges for similar treatment, articles, and supplies furnished to an injured person when paid for by the injured person, whichever is lower. On this basis, the commissioner or compensation judge may determine the reasonable value of all treatment, services, and supplies, and the liability of the employer is limited to that amount. The commissioner may by rule establish the reasonable value of a service, article, or supply in lieu of the 85 percent limitation in this paragraph.