PATRICIA PRADER ROGGEMAN, Employee/Appellant, v. MODEL STONE CO. and CNA INS. CO., Employer-Insurer.
WORKERS’ COMPENSATION COURT OF APPEALS
NOVEMBER 4, 2009
ATTORNEY FEES - RORAFF FEES. The record did not support the judge’s decision that no genuine dispute existed regarding payment of medical expenses. Accordingly, the employee’s attorney was entitled to Roraff fees for work performed in connection with that dispute, and the judge’s decision to the contrary was reversed.
Determined by: Wilson, J., Pederson, J., and Rykken, J.
Compensation Judge: John Ellefson
Attorneys: David G. Johnson, Attorney at Law, Prior Lake, MN, for the Appellant. Vincent A. Petersen, Cousineau McGuire, Minneapolis, MN, for the Respondents.
DEBRA A. WILSON, Judge
The employee appeals from the judge’s finding that no genuine dispute existed between the parties over payment of medical bills and from the judge’s resulting denial of Roraff attorney fees. We reverse.
The employee sustained work related injuries in 1986, 1988, 1989, 1990, and 1992, while employed by Model Stone Company [the employer]. In June of 2005, the parties entered into a partial stipulation for settlement wherein the parties agreed to a full, final, and complete settlement of the employee’s claims, except claims for future medical expenses for treatment of work injuries to the employee’s neck, upper back, right shoulder, right arm, low back, bilateral hands, wrists, and fingers. An award on stipulation was filed on June 30, 2005.
The employee received significant medical care after June 30, 2005. Billings from some healthcare providers indicate that Medicare and Blue Cross Blue Shield [BCBS], rather than CNA, were often billed for the employee’s treatment.
Attorney David G. Johnson had represented the employee at the time of the partial stipulation for settlement. On April 26, 2006, Mr. Johnson wrote to Vincent Petersen, counsel for the employer and CNA, enclosing numerous medical reports and itemizations from Methodist Hospital and Park Nicollet Clinic.
On October 23, 2006, Mr. Johnson wrote again to Mr. Petersen, stating, “Park Nicollet has seen fit to bill others for treatment related to the back, neck and hands.” Mr. Johnson went on to include itemized billings, stating that he believed that CNA was responsible for some of the services, which he went on to specify. On May 7, 2007, he provided Mr. Petersen with copies of benefit statements from Construction Suppliers Health & Welfare Trust Fund, BCBS, and Medicare, along with “correspondence to these various entities informing them that billing has been improperly processed [and] that they should be contacting CNA for proper billing procedures.”
On July 26, 2007, Mr. Petersen wrote to Mr. Johnson, informing him that it appeared that many of the employee’s bills had been submitted to other carriers and that many of the medications provided by Omnicare were unrelated to the employee’s work injuries. He also noted that he had contacted BCBS and the Construction Suppliers’ Health & Welfare Fund “to determine who is responsible for which bills.” He went on to state that “this is somewhat complicated. I am hopeful to get a resolution of these claims in the coming weeks.” He ended by asking Mr. Johnson to have the employee submit all future bills to CNA for either approval or denial.
On December 3, 2007, the employee filed a medical request seeking payment of numerous medical expenses. Many of the bills attached to the medical request showed a $0 balance. The employer and CNA responded on December 10, 2007, indicating that they had paid all invoices “related to any of the work-related injuries that have been properly submitted. Many of the bills referenced in the medical request were improperly submitted to other entities.” A month later, on January 3, 2008, Mr. Johnson wrote to Mr. Peterson and three other attorneys, stating that he was enclosing copies of recently received Walgreen pharmacy records.
In March of 2008, the employer and CNA entered into a partial stipulation for settlement with BCBS, wherein BCBS claimed to have paid medical expenses for the employee totaling $1,615.72. CNA agreed to pay BCBS $1,150.00. The employee was not a party to this stipulation.
Mr. Johnson wrote to Medicare on February 2, 2008, and contacted that office again on April 3, 2008, requesting an itemization of payments. Medicare wrote to CNA on April 22, 2008, requesting reimbursement of $4,559.16 in benefits paid. On May 1, 2008, the employer and CNA made full payment to Medicare.
On May 7, 2008, Mr. Johnson wrote to Mr. Petersen’s office, listing bills, primarily with Park Nicollet and Methodist Hospital, which remained “unaddressed in our Medical Request.” Mr. Petersen responded by letter of May 30, 2008, stating that he had received supporting documentation from the attorney for Park Nicollet and Methodist Hospital indicating that all bills had been paid at that point by either CNA, Medicare, or BCBS. On June 4, 2008, Mr. Johnson wrote back, stating, “I understand that many of these bills have been paid by Medicare and Blue Cross. That is not the point. The point is that CNA should be paying all of them, and Blue Cross and Medicare should be reimbursed.” He went on to contend that the bills attached to his letter of May 7, 2008, had not been paid by anyone.
On July 14, 2008, Mr. Johnson wrote to Judge John Ellefson at the Office of Administrative Hearings, stating that he had appeared for a medical conference on June 19, 2008, at which time he had informed the judge that “all medical bills had been paid with the exception of the potential Spaeth balance intervention interests of several providers.” Because sixty days had elapsed after service of the intervention notices, Mr. Johnson requested that an order be issued extinguishing the providers’ interests and dismissing the medical request.
On September 8, 2008, Mr. Johnson filed a statement of attorney fees and costs, seeking $6,615.00 in attorney fees, claiming that he had recovered $92,128.93 in medical benefits for the employee that would not have been paid but for his involvement in the case. The employer and CNA filed an objection, asserting that all invoices that had been properly submitted to CNA for payment had been paid in a timely fashion and that “there was no dispute per Minn. Stat. § 176.081 (1)(c).”
The matter proceeded to hearing, and, in a decision filed on July 9, 2009, the compensation judge found that Mr. Johnson had not established the existence of a genuine dispute regarding the payment to health care providers and that Mr. Johnson was therefore not entitled to any attorney fees. The employee appeals.
Minn. Stat. §176.081, subd. 1(c), provides, in part,
In no case shall fees be calculated on the basis of any undisputed portion of compensation awards. Allowable fees under this chapter shall be based solely upon genuinely disputed claims or portions of claims. . . . The existence of a dispute is dependent upon a disagreement after the employer or insurer has had adequate time and information to take a position on liability. Neither the holding of a hearing nor the filing of an application for a hearing alone may determine the existence of a dispute.
At hearing on the attorney fee request, Mr. Petersen argued that the employee “submitted bills without any rhyme or reason to CNA, to Medicare . . . mostly to Blue Cross.” He contended that bills that had been submitted to CNA “were either accepted or denied within thirty days” and that his witness would testify that, of the bills submitted to CNA, there were “only approximately three where there was an issue.” He went on to state that, in order to prevail on his attorney fee petition, Mr. Johnson would have to prove that “there is a date of service that was submitted and wasn’t paid timely.”
In his findings, the compensation judge first concluded that, when CNA had notice of a bill, CNA
would promptly contact the health care provider and inquire if there was any outstanding amount due for the medical treatment in question. If CNA was advised that there was an outstanding amount due for the medical treatment in question, it would request medical records related to the treatment so that it could determine whether the treatment was related to one of the work injuries. Upon the receipt of the medical records, CNA would promptly determine whether the treatment was work related and if it was, it would make a prompt payment to the treatment provider. The evidence presented did show the existence of a single instance where under these circumstances CNA did not make prompt payment of the full amount sought by the health care provider.
The compensation judge then found,
Mr. Johnson did not establish that there was a genuine dispute regarding the payment to a health care provider for any medical treatment that it had provided to the employee. Therefore Mr. Johnson is not entitled to receive an attorney’s fee for any time spent with regard to having CNA make payment for the medical treatment in question.
Mr. Johnson first appeals from the judge’s finding as to how CNA processed claims and from the judge’s conclusion that CNA made prompt payment. We agree that substantial evidence does not support those determinations.
Carla Korman, a claims specialist at CNA, was the only witness to testify at hearing. While she testified as to how she handles claims, she also testified that she has only been the claims adjustor on the employee’s file for the last year. She was unaware of whether CNA had denied medical bills related to the employee’s back in 2006 because she was not the claims adjustor at that time and she did not have the complete file with her. She was also unable to confirm whether Mr. Petersen had sent copies of all bills, forwarded to him by Mr. Johnson, to CNA for review. And, while she testified that Exhibit 7 represented the payment history and showed every bill paid by CNA from July 29, 1992, through May 1, 2008, she did not have the corresponding “explanation of review” for each of those bills.
Numerous medical bills contained in the hearing exhibits were not, in fact, paid promptly. For example, in Exhibit 7, there is a Methodist Hospital bill, for a March 31, 2006, date of service, that was not paid by CNA until August 30, 2007. Another Methodist Hospital bill, for services rendered on July 20, 2006, was not paid until June 15, 2007, nearly a year later, and yet another Methodist Hospital bill, for services on April 30, 2007, was not paid until July 24, 2007. All of those bills listed CNA as the primary, or only, insurer, and there was no explanation for the delay in payment.
Mr. Johnson also contends that there was evidence of a dispute regarding payment to health care providers for medical treatment provided to the employee. Again, we agree. For example, CNA’s payment of Methodist bills on June 15, 2007, and July 24, 2007, followed shortly after a letter by Mr. Johnson to Mr. Petersen, dated May 7, 2007, enclosing Methodist bills and stating, “I understand you will put these items in line for payment.” There is also the July 26, 2007, letter from Mr. Petersen to Mr. Johnson, indicating that he was trying to determine “what is work-related and what is not” and, with reference to BCBS and the Construction Suppliers’ Health & Welfare Fund, his hope “to get a resolution of these claims in the coming weeks.” These comments provide additional evidence as to the existence of a dispute regarding medical bills.
Because the evidence establishes several instances in which CNA failed to make prompt payment and also shows the existence of a dispute between the employee and CNA regarding the payment of medical bills, we reverse the judge’s findings to the contrary.
Given our conclusion about the existence of a dispute over payment of medical expenses, Roraff fees are payable. The question then becomes how to calculate those fees. Mr. Johnson contends that, because the employer and CNA never questioned his hours, hourly rate, or any of the Irwin factors, the full attorney fee claimed, $6,615.00, should be awarded. We are not persuaded.
This court has continuing jurisdiction over attorney fees pursuant to Minn. Stat. § 176.081, subd. 3. The file reflects that the employee’s claims over time were confusing; bills that had already been paid by other insurers were often sent to CNA with an indication that those bills had not been paid; and Mr. Johnson did not make it clear from the start that he was seeking to have CNA reimburse BCBS and Medicare. His argument that CNA should have paid the providers who had a $0 balance makes little sense. In addition, bills that were unrelated to the employee’s work injuries were often submitted for payment, or related bills were submitted in duplicate, thus requiring CNA to review them twice. We are of the opinion that the same result could have been obtained in a much more efficient manner. We therefore conclude that Mr. Johnson is entitled to $4,000.00 in fees and also his taxable costs. Pursuant to statute, the employee is entitled to subdivision 7 fees on the $4,000.00 fee award. See Minn. Stat. § 176.081, subd.7.
 See Roraff v. State, Dep’t of Transp., 288 N.W.2d 15, 32 W.C.D. 297 (Minn. 1980).
 The case originally involved Employers Insurance of Wausau, CNA Insurance Company, and the Special Compensation Fund. Pursuant to the partial stipulation for settlement, CNA became the paying agent for the employee’s future medical benefits, with an agreement by Wausau and the Special Compensation Fund to reimburse CNA in an agreed upon percentage basis.
 Copies of the specific information submitted with these letters were not attached to the letters when they were offered as exhibits at hearing.
 The Walgreen records were not attached to the letter offered into evidence at the hearing.
 Exhibit 7 indicates that this was the issue date of CNA’s payment to Medicare. Mr. Petersen’s letter of May 2, 2008, to Mr. Johnson indicates that he had recommended that CNA make full payment to Medicare.
 Spaeth v. Cold Springs Granite Co., 56 W.C.D. 136 (W.C.C.A. 1996) (aff’d by order opinion, Minn. 1997).
 It is unclear whether the judge intended to say that the evidence “did show the existence of [only] a single instance where CNA” did not make prompt payment or whether he meant to say “did [not] show the existence of a single instance.”
 According to Ms. Korman,
Once a bill has been submitted we require an itemized bill and at that time we have to review the medical records attached to the bill. Once we have determined and we’ve reviewed the medical that’s attached to see if it is related or not to the injury, if it’s related to the injury I will approve it at that time. If it is not related to the injury I deny it at the same time.
 She later testified that she “came on to the claim” “around probably” May of 2007.
 The “explanation of review” showed when a bill was received by CNA and when it was paid.
 In his appellate brief, Mr. Petersen included a “summary of bills,” which indicated that the March 31, 2006, Methodist Hospital bill was “covered in May 3, 2006, and Oct. 19, 2006 stipulations.” Those stipulations, however, were not part of the record before this court, and no evidence was offered as to why payment was not made until ten months after the last stipulation. With regard to the July 20, 2006, Methodist Hospital bill, Mr. Petersen alleged that a bill for $448.00 was never submitted to CNA but rather was submitted to and paid by Medicare. He did not address, however, the more than $3,000.00 bill from Methodist Hospital, for the same date of service, that listed CNA as the insurer but was not paid by CNA until eleven months later.
 CNA did eventually make payment to BCBS and Medicare.
 See Irwin v. Surdyk’s Liquor, 599 N.W.2d 132, 59 W.C.D. 319 (Minn. 1999).
 We decline to award attorney fees on appeal. The evidence submitted at the fee hearing was not organized or orderly. Mr. Johnson made no attempt to cross reference bills submitted for payment with bills paid by CNA, apparently leaving that work for the judge. His arguments on appeal were also confusing. He raised four issues in his appellate brief but made only two arguments. He prevailed on appeal not because of his brief but because of this court’s extensive review of the file.