MICHELE M. ALDEN, Employee, v. MILLS FLEET FARM and HARTFORD SPECIALTY RISK SERVS., Employer-Insurer/Appellants.
WORKERS’ COMPENSATION COURT OF APPEALS
JULY 29, 2010
ATTORNEY FEES - CERTIFICATION OF DISPUTE; STATUTES CONSTRUED - MINN. STAT. § 176.081, SUBD. 1(c). In general, the dispute certification process contained in Minn. Stat. § 176.081, subd. 1(c), is applicable whether a medical claim is pursued through a medical request or a claim petition.
ATTORNEY FEES - RORAFF FEES. The compensation judge erred in concluding that a genuine dispute existed for purposes of liability for Roraff fees. An employer and insurer’s timely request for an independent medical examination, standing alone, is insufficient to support a finding of a genuine dispute between the parties over a medical claim.
Determined by: Wilson, J., Rykken, J., and Pederson, J.
Compensation Judge: Janice M. Culnane
Attorneys: Norbert Cuellar, Cuellar Law Office, Minneapolis, MN, for the Respondent. Michael C. Jackman, Larkin, Hoffman, Daly & Lindgren, Minneapolis, MN, for the Appellants.
DEBRA A. WILSON, Judge
The employer and insurer appeal from the compensation judge’s award of Roraff fees and her corresponding award under Minn. Stat. § 176.081, subd. 7. We reverse.
On January 22, 2009, the employee sustained a work-related injury to her low back while employed by Mills Fleet Farm [the employer]. The employer and insurer admitted liability and paid various wage loss and medical expense benefits.
The employee continued to experience significant symptoms, despite conservative treatment, and, on April 8, 2009, the employee’s physician, Dr. Yannick Grenier, sent the insurer a fax requesting authorization to perform surgery, laminotomies at L4-5. On April 17, 2009, seven working days later, the insurer responded in several ways to Dr. Grenier’s request for authorization of surgery. Jolene Smiley, the claims adjuster assigned to the employee’s case, faxed a note to Dr. Grenier, indicating that “surgery is denied pending a 2nd surgical opinion per Minn. Stat. § 176.135(1)(a).” Ms. Smiley also spoke directly to the employee, telling her that an independent medical examination would be set to determine whether the surgery was necessary and related to her work injury. According to her testimony at hearing, Ms. Smiley assured the employee in this same conversation that, if the independent examiner agreed, surgery would be approved, and that the employee’s wage loss and other medical benefits would continue pending receipt of the examiner’s opinion. That same day, Ms. Smiley scheduled the examination, with Dr. Terry Hood, for May 2, 2009, and sent a letter to the employee notifying her of that appointment. Also on April 17, 2009, Lilnetra Grady, the insurer’s utilization review nurse, sent the employee a letter, explaining that the employee’s surgery could not as “yet” be considered reasonable or medically necessary because tests had not definitively identified the source of the employee’s pain. The letter also contained an explanation of standard and expedited appeal procedures, should the employee choose to contest the insurer’s decision.
On April 24, 2009, the employee signed a retainer agreement with attorney Norbert Cuellar, and, by letter dated April 28, 2009, Mr. Cuellar served and filed a copy of the retainer and a notice of appearance. Two days later, on April 30, 2009, - - two days prior to the scheduled exam by Dr. Hood - - Mr. Cuellar served the employer and insurer with a claim petition, by mail, requesting approval of the surgery proposed by Dr. Grenier and “reserv[ing] Roraff, Irwin, Heaton Fees” and fees pursuant to Minn. Stat. § 176.081, subd, 7. The claim petition and supporting documents made no reference to the pending examination by Dr. Hood. In the cover letter to the claim petition, Mr. Cuellar indicated that the employee would not agree to give the insurer an extension of time to file its answer.
On May 2, 2009, the employee’s examination by Dr. Hood took place as scheduled. Three days after that, on May 5, 2009, Ms. Smiley received the employee’s claim petition, which she referred to the insurer’s attorney for response. That attorney served and filed an answer to the claim petition on May 14, 2009.
On May 19, 2009, Ms. Smiley contacted Dr. Hood’s office to inquire about the status of his report. Upon being informed that Dr. Hood had agreed with the request for surgery, Ms. Smiley faxed Dr. Grenier’s office, that same day, to indicate that the insurer had approved the requested procedure. The following day, on May 20, 2009, the employer and insurer’s attorney wrote to Mr. Cuellar, indicating again that the insurer had agreed to pay for the laminotomies and asking that he withdraw the claim petition.
The employee underwent the recommended surgery on June 3, 2009.
Mr. Cuellar served and filed a claim for Roraff fees, and the matter came on for hearing before a compensation judge on February 16, 2010. The employer and insurer contested the claim for fees on three grounds, arguing 1) that the employee had not requested or received certification of a dispute, as required by statute; 2) that there had been no genuine dispute over the employee’s entitlement to surgery; and 3) that Mr. Cuellar had not been instrumental in obtaining approval of the procedure. Evidence included certain pleadings, correspondence between the parties, and the testimony of Ms. Smiley, who was the sole witness at hearing.
In a decision issued on March 1, 2010, the compensation judge concluded that Mr. Cuellar’s failure to request certification of the dispute did not preclude his claim for fees, that there had been a genuine dispute over the proposed surgery, and that Mr. Cuellar was entitled to $6,007.61 in Roraff fees for his representation of the employee in connection with her claim. The judge also made an award pursuant to Minn. Stat. § 176.081, subd. 7. The employer and insurer appeal.
STANDARD OF REVIEW
On appeal, the Workers’ Compensation Court of Appeals must determine whether “the 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 (2008). Substantial evidence supports the findings if, in the context of the entire record, “they 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, findings of fact should not be disturbed, even though the reviewing court might disagree with them, “unless they are clearly erroneous in the sense that they are manifestly contrary to the weight of evidence or not reasonably supported by the evidence as a whole.” Northern States Power Co. v. Lyon Food Prods., Inc., 304 Minn. 196, 201, 229 N.W.2d 521, 524 (1975).
“[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).
1. Certification of Dispute
With regard to attorney fees for work performed in connection with medical claims, Minn. Stat. § 176.081, subd. 1(c), provides, in part, as follows:
Except where the employee is represented by an attorney in other litigation pending at the department or at the Office of Administrative Hearings, a fee may not be charged after June 1, 1996, for services with respect to a medical or rehabilitation issue arising under section 176.102, 176.135, or 176.136 performed before the employee has consulted with the department and the department certifies that there is a dispute and that it has tried to resolve the dispute.
In the present case, no “other litigation” was pending at either the department or at the Office of Administrative Hearings, and it is undisputed that neither the employee nor Mr. Cuellar consulted the department or obtained certification of the dispute as specified by statute. The compensation judge concluded, however, that Mr. Cuellar’s failure to request certification from the department did not preclude payment of attorney fees, explaining, in part, as follows:
To require that a[n] issue be certified by the Department of Labor & Industry and that the Department be given an opportunity to resolve the issue, before it can be addressed at a hearing pending at the Office of Administrative Hearings, would serve to delay a case and make the case unable to be set at the Office of Administrative Hearings. With surgery pending, the employee has the opportunity to file a Claim Petition directly with the Office of Administrative Hearings for an evidentiary hearing on the need for surgery. . . . The employee does not need to have the Department of Labor & Industry add an additional step to this process since the law allows the employee the opportunity to file a Claim Petition with the Office of Administrative Hearings, which she did.
However, the employee’s choice of pleading, or even venue, is not the point.
The intent of the dispute certification process referenced in Minn. Stat. § 176.081, subd. 1(c), is to facilitate “the prompt and economical resolution of medical and rehabilitation disputes without the need for attorney involvement.” Jorgenson v. Nova-Fleck, Inc., 638 N.W.2d 760, 763, 62 W.C.D. 89, 91 (Minn. 2002), quoting Jorgenson v. Nova-Fleck, Inc., 62 W.C.D. 81, 85 (W.C.C.A. 2001) (reversed on other grounds). Nothing in the statute exempts claims initiated by claim petitions from the process, and we see no reason to differentiate between the two procedural routes for purposes of determining whether fees are payable when the certification process has not been followed. Requiring employees and their counsel to take this first, informal step is hardly an onerous burden, and, as the supreme court has agreed, the process is not a “mere technicality that may be ignored.” Id. We therefore hold that the compensation judge erred by ruling that the certification process is inapplicable when an employee chooses to file a claim petition rather than a medical request.
Under other circumstances, our holding on the certification issue would obviate the need for any further analysis: no fees would be payable because Mr. Cuellar failed to ask the department to certify the dispute. See, e.g., Shaw v. Flame Metals Processing Corp., 69 W.C.D. 237 (W.C.C.A. 2009). However, this case is arguably governed by the supreme court’s holding in Jorgenson, cited above.
In Jorgenson, the supreme court concluded that the employee’s attorney was entitled to Roraff fees, despite his failure to request certification of a dispute, because primary liability had been denied, and the employer and insurer had not raised the issue of certification in response to the employee’s medical expense claim. In so holding, the court explained as follows:
[T]he department has no jurisdiction to determine primary liability issues. Minn. Stat. § 176.106, subd. 8 (2000). Inasmuch as the department has no jurisdiction to resolve a dispute when the employer and insurer deny primary liability, certification is superfluous. Moreover, it would be inequitable to deny fees when the employer and insurer do not raise the issue in response to what they believe to be a claim requiring certification.
Jorgenson, 638 N.W.2d at 763, 62 W.C.D. at 91-92 (footnote omitted). In the present case, unlike Jorgenson, the employer and insurer admitted primary liability for the employee’s injury. However, the cost of the claimed procedure ultimately exceeded $7,500, and, by statute, medical claims exceeding $7,500 do not fall within the department’s jurisdiction. Minn. Stat. § 176.106, subd. 1. As such, as in Jorgenson, department jurisdiction was arguably lacking, making the certification process “superfluous.” Furthermore, as in Jorgenson, we see nothing indicating that the employer and insurer raised the certification issue in response to the employee’s claim petition. However, even if certification was unnecessary, under the rationale of Jorgenson, we conclude that Roraff fees are nevertheless inappropriate in this matter, on other grounds.
2. Genuine Dispute
The same fee provision requiring certification of disputes in medical claim cases also contains the following language:
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, including disputes related to the payment of rehabilitation benefits or to other aspects of a rehabilitation plan. 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.
Minn. Stat. § 176.081, subd. 1(c) (emphasis added). The compensation judge in this case reasoned that “[t]he dispute between the employee and the insurer [was] well-documented,” through the correspondence between the employee, the insurer, and the employee’s physician. The judge also concluded that the insurer’s promptness in responding to the request for surgery did not mean that no dispute existed for purposes of Mr. Cuellar’s entitlement to fees. While not saying so explicitly, the judge apparently based her decision as to the existence of a “genuine dispute” to a large extent on the fact that the insurer exercised its right to an independent medical examination prior to approving the requested procedure. However, an employer and insurer have a right to such an exam under both the statute and the rules, and this court has cautioned that the exercise of this right, standing alone, is not enough to establish the existence of a genuine dispute for purposes of Minn. Stat. § 176.081, subd. 1(c). Abernathy v. Asplundh Tree Expert, 60 W.C.D. 310 (W.C.C.A. 2000).
The medical treatment parameters establish a comprehensive scheme governing requests for nonemergency surgery. Under those rules, the employee’s doctor was required to notify the insurer of the proposed surgery at least seven working days prior to performing the procedure. Minn. R. 5221.6050, subp. 9.A.(3). The insurer then responded to the doctor’s request for surgery within seven working days, also as required by rule. Minn. R. 5221.6050, subp. 9.C. Within that same seven-day period, Ms. Smiley scheduled the exam with Dr. Hood, to take place about two weeks later, and Ms. Smiley also notified the employee of the exam and assured her that the surgery would be approved if Dr. Hood concurred that the procedure was medically reasonable and necessary. Less than three weeks after the examination, Ms. Smiley contacted Dr. Hood’s office to inquire about his report and, receiving verbal notification of Dr. Hood’s agreement, Ms. Smiley immediately communicated the insurer’s approval to the employee’s surgeon. In other words, the entire process, from the insurer’s request for examination to approval, was completed in less than 45 days, as contemplated by Minn. R. 5221.6050, subp. 9.C.(6), which provides as follows:
(6) In any case where prior notification of proposed surgery is required, the insurer may elect to obtain an examination of the employee by the employer’s physician under Minnesota Statutes, section 176.155, sometimes referred to as an “independent medical examination.” If the insurer notifies the employee and health care provider of the examination within seven working days of the provider’s notification, the proposed nonemergency surgery may not be provided pending the examination. However, after 45 days following the insurer’s request for an examination, the health care provider may elect to proceed with the surgery, subject to a determination of compensability by the commissioner or compensation judge under subpart 7.
The 45-day limit in Minn. R. 5221.6050, subp. 9.C.(6), appears to reflect a judgment, by the department, that 45 days is adequate time to allow an insurer to schedule an exam, receive the doctor’s opinion, and then make its decision to approve or deny authorization for the requested procedure. We recognize that the rules allow an employee or a provider to file a medical request or a claim petition “[i]f the insurer denies authorization . . . for [the proposed] treatment.” Minn. R. 5221.6050, subp. 7.C. (emphasis added). However, the same rules make it clear that an insurer’s request for an independent medical examination is not the same as a denial of authorization. Rather, an insurer’s request for an exam is simply one of the several specified alternatives to denial.
Medical treatment issues are sometimes complex, and surgery, particularly, involves substantial cost and potential liability for resulting additional permanent impairment and wage loss. The rules clearly contemplate significant insurer involvement when surgery is proposed to treat a work-related injury, and it is evident that the provisions in question were intended to give an insurer adequate time to make an informed decision to either authorize or deny authorization of proposed treatment, thereby avoiding unnecessary disputes. It therefore seems to us that the time limits established by those rules are very pertinent to the question of whether the insurer has had reasonable “time and information to take a position on liability,” as specified by Minn. Stat. § 176.081, subd. 1(c). After all, one of the purposes of the treatment parameters is to “reduce litigation over compensable treatment.” Jacka v. Coca-Cola Bottling Co., 580 N.W.2d 27, 36, 58 W.C.D. 395, 410 (Minn. 1998). Allowing attorney fees in cases such as this one would undercut that aim by encouraging unneeded attorney involvement before the approval process specified by rule can be completed. And it would also be inconsistent with the apparent intent of the statutory provisions making a “genuine dispute” a prerequisite to an award of fees. In summary, we find little justification for imposing liability for fees on an insurer that handles and ultimately approves a request for surgery in precisely the manner envisioned by the rules governing compensable treatment.
The employee has the burden of establishing entitlement to attorney fees. See, e.g., Cantu v. Ameripride Linen & Apparel Serv., 65 W.C.D. 343 (W.C.C.A. 2005). In the particular case now before us, the employer and insurer substantially complied with all of the rules applicable to requests for surgery, well within the time specified by those rules, and there was little or no indication of any real disagreement between the parties. Rather, the insurer simply evaluated the surgery request using one of the processes specifically authorized by the treatment parameters. Under these circumstances, the record does not support the conclusion that a “genuine dispute” existed within the meaning of Minn. Stat. § 176.081, subd. 1(c). We therefore reverse the judge’s award of Roraff fees and, correspondingly, the award pursuant to 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 term Roraff fee is commonly used to describe attorney fees payable in connection with medical treatment disputes. See also Minn. Stat. § 176.135, subd. 1, and Minn. Stat. § 176.081, subd. 1.
 The employer and insurer’s answer was not submitted into evidence.
 Contrary to the compensation judge’s reasoning, Mr. Cuellar’s representation of the employee in connection with this surgery request does not qualify as “other litigation” within the meaning of Minn. Stat. § 176.081, subd. 1(c).
 In fact, according to the joint rules governing litigation procedures at both the Office of Administrative Hearings and the department, “[e]xcept where the insurer is disputing that the injury arose out of and in the course of employment, a claim petition containing only medical or rehabilitation issues shall by resolved by the division,” meaning the Workers’ Compensation Division of the Department of Labor and Industry, “unless the division refers the matter” to the Office of Administrative Hearings. Minn. R. 1415.3700, subp. 10 (emphasis added). This rule appears to contemplate department involvement in most medical-only claims, irrespective of which pleading an employee decides to file.
 Pursuant to Minn. Stat. §176.106, subd. 1, the commissioner has jurisdiction to issue decisions on medical disputes only “if the amount in dispute at the time of the medical request is filed is $7,500 or less.” There is an argument that a request for approval of prospective surgery differs from a request for payment of expenses already incurred, for purposes of the certification process. That is, in the typical case, no dollar amount is specified when approval for surgery is sought. As such, it could be argued that the $7,500 jurisdictional limit of the statute is inapplicable in such cases.
 We would note that, while the insurer framed its request as a request for a second surgical opinion pursuant to Minn. Stat. § 176.135, subd. 1a, what the insurer was actually seeking was an independent medical examination, pursuant to Minn. Stat. § 176.155, by a physician of the insurer’s choosing. The blurring of the line between the two kinds of exams is not helpful.
 Minn. Stat. § 176.155 and Minn. R. 5521.6050, subp. 9.C.
 Several other kinds of treatment also require prior notification, including some chronic management modalities, certain durable medical equipment, and treatment requiring a departure from the parameters. Minn. R. 5221.6050, subp. 9.A. The rules relating to nonemergency surgery are particularly detailed.
 Ms. Smiley’s version of the conversation was uncontradicted, and the compensation judge made no finding, either implicit or explicit, about Ms. Smiley’s credibility. The employee was not called as a witness at the fee hearing.
 Pursuant to Minn. R. 5221.6050, subp. 9.C., “[w]ithin the seven days [of a request for approval], the insurer must either approve the request, deny authorization, request additional information, request that the employee obtain a second opinion, or request an examination by the employer’s physician.” (Emphasis added.) Had the insurer instead elected to request a second opinion or additional information, other time limits would have been applicable.
If a second opinion is requested, the provider is prohibited from performing the surgery until seven working days after the insurer has received the second opinion. Minn. R. 5221.6050 subp. 9.C.(5). If the insurer requests additional information, the provider may not perform the surgery until the provider “provides reasonable additional information,” after which the insurer again has seven working days to respond. Id., subp. 9.C.(7). When the time limits specified by rule have elapsed, the provider may elect to perform the proposed surgery, subject to a later determination of compensability by the commissioner or compensation judge, “under subpart 7,” governing procedures when an insurer “denies authorization.”
 We note here that it is the insurer’s compliance with the treatment parameters that is important, not the insurer’s compliance with the requirements of Minn. Stat. § 176.155, governing independent medical examinations. An insurer’s compliance with the time limits specified in Minn. Stat. § 176.155 says little or nothing about whether a “genuine dispute” exists for purposes of entitlement to attorney fees.
 The employee retained Mr. Cuellar one week after the insurer declined to approve the procedure pending completion of Dr. Hood’s exam. Two days before the pending exam, Mr. Cuellar chose to file a claim petition rather than either contacting the department to certify the dispute or attempting any communication with the insurer. The timing of matters was so close that the adjuster did not even receive the claim petition until several days after the independent medical examination had been completed.