SENAIT GEBREKIDAN, Employee, v. LSG SKY CHEFS, INC., and LIBERTY MUT. INS. COS., Employer-Insurer, and PAR, INC., Intervenor/Appellant.
WORKERS’ COMPENSATION COURT OF APPEALS
JANUARY 29, 2010
REHABILITATION - REHABILITATION REQUEST; PRACTICE & PROCEDURE - INTERVENTION; SETTLEMENTS - EXCLUSION. A rehabilitation provider who filed a rehabilitation request was a party and exclusion of the rehabilitation provider from settlement negotiation entitles the intervenor to full reimbursement of its claim.
Determined by: Stofferahn, J., Rykken, J., and Pederson, J.
Compensation Judge: Gary P. Mesna
Attorneys: Katie H. Storms, Aafedt, Forde, Gray, Monson & Hager, Minneapolis, MN, for the Respondents. Michael G. Schultz, Sommerer & Schultz, for the Appellant.
DAVID A. STOFFERAHN, Judge
PAR, Inc., a rehabilitation provider, appeals from a compensation judge’s order denying its request for a Parker/Lindberg hearing to consider outstanding bills. We vacate the order and order payment of PAR’s claim by the employer and insurer.
The employee sustained a work injury to her left foot and ankle on February 17, 2007. The injury was admitted by the employer and insurer and various workers’ compensation benefits were paid. In July 2007, the employee was referred for a rehabilitation consultation by her attorney, and, thereafter, she began receiving statutory rehabilitation services from QRCs at PAR.
In March 2008, the employee was evaluated on behalf of the employer and insurer by Dr. Tilok Ghose. Dr. Ghose’s opinion was that the employee did not require any further medical treatment or work restrictions as a result of her 2007 work injury. The employee filed a medical request in April 2008, seeking payment for a pain clinic program as recommended by her treating doctor. The employer and insurer objected to the request, citing to Dr. Ghose’s opinion. The employer and insurer also filed a rehabilitation request to discontinue further rehabilitation services based on Dr. Ghose’s opinion that the employee needed no work restrictions from her 2007 work injury.
The Department of Labor and Industry [DOLI] sent a letter to the employee on April 16, 2008, with a copy to the employee’s attorney and the QRC. The letter advised the employee that she should file a response to the employer and insurer’s rehabilitation request if she did not want rehabilitation services to be discontinued. There is no indication in the record as to any response by the employee. No administrative conference was ever scheduled on the rehabilitation request and no further action on the request was ever taken by DOLI. PAR continued to provide rehabilitation services, filing monthly reports with the employer and insurer. PAR’s bill for services after the employer and insurer’s rehabilitation request was filed is the basis of PAR’s claim.
An administrative conference was held on the employee’s medical request and the request was denied. The employee then filed a request for a formal hearing. The hearing was initially set for September 11, 2008, and was then rescheduled to December 11, 2008.
The hearing set for December 11, 2008, did not take place because the employee and the employer and insurer reached an agreement to settle the case. PAR filed a closure report, R-8, with the state on December 23, 2008, ending rehabilitation because of the settlement. PAR also filed a rehabilitation request seeking payment of its bill which totaled $5,580.93.
The employer and insurer objected to the request, stating in part, that the employer and insurer “submitted a Stipulation for Settlement on December 18, 2008,” which foreclosed outstanding intervention claims. The response also stated that the employee had agreed to hold the employer and insurer harmless for such claims. This response was filed January 13, 2009. On January 26, PAR asked for its rehabilitation request to be dismissed but advised that a Parker/Lindberg hearing would be requested.
The Stipulation was not submitted to the Office of Administrative Hearings [OAH] until February 9, 2009, and an Award on Stipulation was issued on February 11, 2009. The Stipulation provided for a complete waiver of all claims by the employee on a final basis with the exception of limited future medical care. The Stipulation identified part of the employee’s claim as being that she was “entitled to the provision of rehabilitation services.” The Stipulation closed out all claims for rehabilitation, past, present, and future, on a final basis.
A number of healthcare providers were identified in the Stipulation as potential intervenors. PAR was not mentioned in the Stipulation and PAR was not served with a copy of the Award on Stipulation. A healthcare provider, MAPS Pain Clinic, was identified in the Stipulation as an intervenor, was a signatory to the Stipulation, and received payment of 100% of its outstanding bill.
John Richardson, the owner and CEO of PAR, has stated in an Affidavit to this court that the employer and insurer made a proposal on January 22, 2009, to settle his claim for PAR’s bill, offering $400.00 on the bill of $5,580.93. The employer and insurer question the date of the offer, but do not otherwise dispute the affidavit. In any event, the offer was made before the Stipulation was submitted to OAH.
PAR filed a request for a Parker/Lindberg hearing on January 30, 2009. The response of the employer and insurer was to file a Motion to consolidate the rehabilitation request it had filed in April 2008 to discontinue rehabilitation with PAR’s request for a Parker/Lindberg hearing. A telephone pretrial on the Parker/Lindberg request was set by OAH for March 23, 2009. The notice sent out by OAH referenced the initiating litigation as being the employee’s request for formal hearing on the medical dispute which she had filed in July 2008.
There is no record as to what transpired at the pretrial. The compensation judge issued an Order dismissing the rehabilitation request PAR had filed back in December. No action was taken on the request for a Parker/Lindberg hearing filed in January.
PAR filed another request for a Parker/Lindberg hearing on June 16, 2009, again seeking to have the claim for payment of its bills considered. In response, the attorney for the employer and insurer argued that the stipulation had foreclosed any “outstanding or unknown” intervention interests and the employee was to hold the employer and insurer harmless from such claims. Secondly, it was argued that any bill for rehabilitation services after April 9, 2008, when the employer and insurer had filed its rehabilitation request to end rehabilitation, was unreasonable and unnecessary.
On June 25, 2009, Compensation Judge Mesna sent a letter to Mr. Richardson, stating, “I cannot grant your recent request for a Parker/Lindberg hearing in this matter. Parker/Lindberg hearings are for intervenors who allege that they were excluded from participating in a settlement. Because you did not intervene in this matter, you are not an intervenor, and I cannot hold a Parker/Lindberg hearing.” PAR has appealed from this denial.
The compensation judge erred in stating that PAR was not an intervenor. In Schumacher v. Personal Staff Senior Care, 66 W.C.D. 53 (W.C.C.A. 2006), this court held specifically that by filing a rehabilitation request seeking payment of its bills, a rehabilitation provider becomes a party to the action. We stated that it is not necessary for the rehabilitation provider to file a motion to intervene. We will not restate here the legal basis for this conclusion since it was laid out in detail in Schumacher.
Without question, Schumacher applies to the present case and PAR should have been acknowledged as a party. Further, the interests of PAR should have been addressed in the stipulation. It is not sufficient to argue, as the employer and insurer did in response to PAR’s requests, that the stipulation closed out all outstanding rehabilitation claims and that, therefore, PAR’s claims were closed out as well. The claims of a party can not be eliminated without its participation.
In response, the employer and insurer do not mention Schumacher. A number of other arguments are raised instead. The employer and insurer contend that PAR was not a “known” intervenor at the time of the settlement. This is simply not true. PAR filed its rehabilitation request for the payment of its bill in December 2008, before the stipulation had been filed with OAH. In fact, the employer and insurer had even made a settlement offer to PAR before the stipulation was submitted to OAH.
The employer and insurer also argue that the April 2008 letter from DOLI to the employee was a “directive” to the QRC to close the rehabilitation file and the QRC’s failure to do so extinguished the intervention claim. We find no support for this argument and none is cited by the employer and insurer.
When an insurer denies further liability, Minn. R. 5220.0510, subp. 7a.A., provides that the QRC is to file a plan closure report “if the consultant decides to withdraw.” (Emphasis added.) The rule also provides that the subpart does not apply if any “document initiating litigation has been filed on the liability issue.” At the time DOLI sent its letter to the employee, the employee had also filed her medical request, initiating litigation on this matter.
This court has also held previously that when there is a dispute as to whether or not continued rehabilitation services should be provided, the QRC need not close the file and take no further action. “A QRC who continues to provide rehabilitation services during the pendency of a dispute for rehabilitation eligibility runs the risk of nonpayment in the event that the employer prevails in the eventual hearing on the merits of the employee’s entitlement to rehabilitation services. However, if the employee prevails, all appropriate services are compensable.” Parker v. University of Minn., 63 W.C.D. 134, 142 (W.C.C.A. 2003).
In Parker, the employee’s claim was settled without the participation of the QRC and the QRC’s bill was not addressed in the stipulation. A Parker/Lindberg hearing was held on the QRC’s claim and the compensation judge determined that the QRC had not been excluded from settlement negotiations. The inquiry then turned to the reasonableness of the QRC’s actions in continuing rehabilitation and the reasonableness of the QRC’s bill. The compensation judge awarded some, but not all, of the QRC’s bill.
The argument made by the employer and insurer in this case as to the actions of PAR after April 2008 goes to the reasonableness of PAR’s bill and does not establish that PAR was not a party at the time of settlement. If the employer and insurer really wanted to have this issue addressed, they should have agreed with PAR’s request for a Parker/Lindberg hearing. PAR was clearly a party in this matter whose interests should have been considered and resolved by the parties at the time of settlement.
In Parker/Lindberg v. Friendship Village, 395 N.W.2d 713, 39 W.C.D. 125 (Minn. 1986), the court dealt with the remedies available to an intervenor who claims not to have been included in settlement negotiations. A hearing is to be held in which the intervenor needs to establish that the intervenor was excluded from settlement negotiations. If exclusion is shown, the intervenor is entitled to full payment of its claim. If there was no exclusion, a determination is made on the underlying claim.
Since PAR was not included in the stipulation, its request for a Parker/Lindberg hearing should have been granted. Ordinarily, we would remand this matter back to OAH for that hearing. We decline to do so in this case, however. First, we find no evidence in the record that PAR was included in settlement negotiations. The only offer to PAR was after the stipulation was already drafted and signed. The parties were well aware of PAR’s rehabilitation services after April 2008, were aware that PAR was requesting payment of its bill before the stipulation was even submitted to OAH, and yet, PAR’s claim was not addressed or even mentioned in the settlement. Second, in her brief, the attorney for the employer and insurer admits that PAR was purposely excluded from settlement negotiations and states, “PAR, Inc. was appropriately excluded from settlement negotiations, because they were not a known intervenor at the time of settlement.” (Brief of Employer and Insurer, p. 11.) Since PAR was excluded from settlement negotiations, it is entitled to full payment of its bill.
We vacate the order of the compensation judge as set out in his letter of June 25, 2009, and we order the employer and insurer to make full payment of PAR’s bill.
 Parker/Lindberg v. Friendship Village, 395 N.W.2d 713, 39 W.C.D. 125 (Minn. 1986).
 The employer and insurer have also argued that PAR’s appeal was not timely in that it was not filed within thirty days of the Order of April 6, 2009, which dismissed PAR’s rehabilitation request. The April 6, 2009, Order, however, had nothing to do with PAR’s request for a Parker/Lindberg hearing and PAR’s appeal of the denial of its request for such a hearing was timely.