JILL E. HANSEN, Employee/Appellant, v. DAYTON’S n/k/a MACY’S, SELF-INSURED, Employer, and JOHN G. STARK, M.D., HENNEPIN FACULTY ASSOCS., and RS MED., Intervenors, and MEDICA HEALTH PLANS, Intervenor/Cross-Appellant.
WORKERS’ COMPENSATION COURT OF APPEALS
FEBRUARY 2, 2011
PRACTICE & PROCEDURE - MATTERS AT ISSUE. Where the employee presented no claim for care provided by her family doctor, it was error for the compensation judge to determine that the care represented an unauthorized change of physician.
MEDICAL TREATMENT & EXPENSE - SUBSTANTIAL EVIDENCE. Where the employee failed to produce evidence to support her claim for payment of medications, substantial evidence supports the compensation judge’s denial of the claim.
MEDICAL TREATMENT & EXPENSE - REASONABLE & NECESSARY. Where the employee and the employer stipulated that a medical bill was not necessary or reasonable treatment, the compensation judge had no authority to consider the bill further.
INTERVENORS. Where a group insurer was granted intervention status by the Office of Administrative Hearings and was thereafter sent multiple notices and orders as an intervenor, the group insurer was an intervenor, even though there was no pending litigation when the group insurer filed its motion to intervene.
INTEREST; STATUTES CONSTRUED - MINN. STAT. § 176.191, SUBD. 3. A group insurer making payment of medical bills pursuant to Minn. Stat. 176.191, subd. 3, is entitled to interest on its reimbursement from the date it paid the bills.
Affirmed in part, reversed in part, vacated in part, and remanded.
Determined by: Stofferahn, J., Wilson, J., and Rykken, J.
Compensation Judge: Jennifer Patterson
Attorneys: Mark J. Freeman, Fitch, Johnson, Larson & Held, Minneapolis, MN, for the Appellant. Timothy P. Jung, Lind, Jensen, Sullivan & Peterson, Minneapolis, MN, for the Respondent. M. Shannon Peterson, McCollum, Crowley, Moschet & Miller, Minneapolis, MN, for the Cross-Appellant.
DAVID A. STOFFERAHN, Judge
The employee has appealed the compensation judge’s denial of certain medical expenses she claimed were related to her work injury of November 20, 1998. Medica Health Plans has cross-appealed from the compensation judge’s denial of its intervention claim. We affirm in part, vacate in part, reverse in part, and remand.
Jill Hansen, the employee, sustained a work injury on November 20, 1998, while employed at Dayton’s. The self-insured employer, now known as Macy’s, admitted a work injury occurred on that date.
The employee’s initial medical care for her injury was with her family doctor, Dr. Timothy Trude. Dr. Trude referred the employee to Dr. Francis Denis at Twin Cities Spine Center. On October 17, 2000, Dr. Denis performed an anterior fusion surgery with instrumentation from L3 to S1. The employee continued to experience symptoms and a nerve block was done at L4 in August 2001. On January 2, 2002, Dr. Ensor Transveldt, also at Twin Cities Spine Center, did a foraminotomy at L4-5 with instrumentation removal. The employer denied liability for treatment and the employee filed a claim petition in July 2001, seeking payment of medical expenses as well as wage loss benefits and permanent partial disability. Medica was identified as a potential intervenor on the claim petition, since it had paid for the disputed treatment.
The employee and the employer entered into a settlement of the employee’s claims in November 2002. In the stipulation, the employee stated she was claiming injuries to her back, shoulder, lower extremities, and a consequential psychological injury from the 1998 work injury. While admitting a 1998 work injury, the employer denied the employee’s claims were related to that injury.
The stipulation provided for a lump sum payment to the employee of $105,000.00 in return for a full, final, and complete settlement of all claims, except for future medical expenses. The stipulation also provided for payment to three health care providers who had intervened. A number of other providers, as well as Medica, were identified as having received notice of the right to intervene in November 2001 but had failed to respond. In the stipulation, the parties requested these potential intervention rights be extinguished. Finally, the stipulation designated Dr. John Stark as the employee’s treating physician.
An Award on Stipulation was issued on November 27, 2002, approving the settlement as prepared by the parties.
Healthcare Recoveries in Louisville, Kentucky, filed a motion to intervene on behalf of Medica with the Office of Administrative Hearings [OAH] on January 6, 2003, seeking reimbursement for medical expenses they had paid on behalf of the employee to that date. There was no litigation pending at the time of the filing. Nevertheless, OAH issued a “Notice of Intervention Status” to Medica on January 16, 2003.
The employee saw Dr. John Stark on November 5, 2002, and he assessed, “right SI pain following three-level fusion surgery.” The employee received therapeutic injections to the SI joint which provided relief from her symptoms and Dr. Stark recommended surgery. He performed right SI joint fusion surgery on January 7, 2003. The employee continued to see Dr. Stark for follow-up care.
The employer refused to pay for the employee’s care with Dr. Stark and in August 2003, the employee requested certification of the medical dispute. Certification was issued by the Department of Labor and Industry [DOLI] on August 21, 2003, and the employee filed a medical request on November 12, 2003. The medical request identified Medica as having paid the employee’s medical expenses and on November 12 the employee sent intervention notices to Medica and a number of health care providers. Medica and some of the providers did not respond to the notices.
No administrative conference was held on the medical request. However, administrative conferences were scheduled six different times between January 2004 and December 2005. Notices of the conferences were sent by OAH separately to Healthcare Recoveries as well as to Medica. The case was also set for a settlement conference in September 2005 and then scheduled for four different “stipulation status” conferences between March 2006 and March 2007. Healthcare Recoveries and Medica were sent notices of these conferences by OAH.
The employee and employer settled the November 2003 medical request and completed a stipulation which was the subject of an award issued on March 8, 2007. The stipulation provided for payment to the employee for out-of-pocket medical expenses, and payment of an attorney’s fee to the employee’s attorney. The stipulation provided for payment to three health care providers who had intervened and identified five health care providers who were said to have received notices of their right to intervene on November 12, 2003, but who had failed to respond. The stipulation provided for these potential intervention claims to be extinguished. Neither Healthcare Recoveries nor Medica was mentioned in the stipulation and no provision was made for Medica’s claims. The stipulation contained a provision stating that the employer would hold the employee harmless for any “potential intervention interests.” The stipulation also named Dr. Robert Wengler as the employee’s treating physician. The employee settled “all claims for medical expenses, mileage and out-of-pocket expenses through the date of the Award on this Stipulation.”
The employee had seen Dr. Wengler in June 2005 for a second surgical opinion. Dr. Wengler did not believe additional surgery was appropriate and he referred her to the Interventional Pain Clinic operated by Hennepin Faculty Associates [HFA].
Records from HFA indicate the employee began treating there in January 2006. Treatment included therapeutic injections into the SI joints and the right piriformis muscle. The diagnoses given in January 2006 were chronic lower back pain syndrome, sacroiliitis, psoasmuscle syndrome, and depression with anxiety disorder. According to the records, the employee had already been prescribed tramadol, Ambien, Advil, cyclobenzaprene, Zoloft, and clonazapen when first seen at HFA.
Radiofrequency denervation was done on the employee’s low back at HFA in August 2007. In December 2007, Dr. Brian Allen at HFA advised the employee there was no further treatment that would help her pain. The last office note from HFA in the record is dated January 28, 2008.
The employer refused to pay the charges at HFA and it appears Medica paid those expenses until the employee’s coverage with Medica ended in August 2007. The employee testified she was unable to continue to treat at HFA because of a lack of insurance coverage and she returned to her family doctor, Dr. Trude. Dr. Trude provided pain management through prescriptions for medications. No records from Dr. Trude were introduced into evidence.
In May 2008, the employee’s attorney requested a certification of dispute from DOLI. No certification was issued until September 15, and the employee filed a medical request on September 24. Letters advising of a right to intervene were sent to RS Medical, a company that had rented a TENS unit to the employee, and to Medica. RS Medical intervened in February 2009.
A number of pretrial notices were issued by OAH but it is not clear how many pretrials were actually held. In September 2009, a notice of hearing was issued, setting the case for hearing on December 4, 2009. On September 28, 2009, a notice of right to intervene was sent to HFA and Allina (Dr. Trude’s facility). On October 30, 2009, Medica filed an intervention motion through its representative Ingenix. HFA intervened on November 4, 2009. Dr. Stark intervened on January 29, 2010. Thereafter, the caption of the case used by OAH and the parties identified Dr. Stark, RS Medical, HFA, and Medica, as intervenors.
The hearing set for December 4, 2009, was postponed and a hearing was rescheduled for March 3, 2010. That hearing was also postponed and reset. The hearing took place on May 12, 2010, before Compensation Judge Jennifer Patterson. In her decision issued July 16, 2010, the compensation judge identified the issues as representing “two sets of claims: those made by the employee and those made by Medica.” No mention was made of claims made by HFA, RS Medical, or Dr. Stark. The compensation judge denied the employee’s claims and Medica’s intervention claims in her findings and order issued July 16, 2010. The employee appeals and Medica cross-appeals.
The employee has identified a number of issues to be considered on appeal, the first being whether the employee’s treatment with HFA and Dr. Trude represented an unauthorized change of physician. While the compensation judge concluded that there was an unauthorized change of physician, there was no finding or order addressing payment for treatment with HFA or Dr. Trude.
At the outset of the hearing, the parties and the compensation judge had a discussion regarding the issues to be determined. On page 16 of the transcript, there is a discussion concerning the treatment and bills at HFA:
THE COURT: There has been a separate agreement with Hennepin Faculty Associates regarding their bills, correct?
MR. JUNG: Two things, yes. We’ve settled HFA, Hennepin Faculty, and we have agreed to reimburse the employee her co-pays without waiving defenses. So the injections would only be an issue to the extent of Medica’s claim, not the employee.
Given this agreement, we see no controversy concerning the treatment at HFA and we need not consider the employee’s argument on this question.
On page 23 of the transcript, the employee’s attorney identified for the compensation judge the claims he was presenting on behalf of the employee, “Apparently the only claims that are left for the employee today are her claims for her medications that she has been taking since December of 2006 and that has been outlined for the court.”
Based on this statement, we conclude the employee was not claiming payment of bills for treatment with Dr. Trude. No records or bills from Allina or Dr. Trude were placed into evidence by the employee. That being so, the question of whether the employee’s treatment with Dr. Trude represented an unauthorized change of physician was not a question for the compensation judge to consider. The compensation judge’s finding on that question is vacated.
The second issue raised by the employee on appeal is the compensation judge’s denial of her claim for payment of medications. At the hearing, the employee’s attorney introduced a 9-page list of prescription medications purchased by the employee between December 18, 2006, and April 30, 2010. Eleven different medications are listed and the amount paid is over $17,000.00.
It is the employee’s obligation to establish that his or her claimed medical expenses are causally related to the work injury and were reasonable and necessary. Adkins v. University Health Care Ctr., 405 N.W.2d 233, 39 W.C.D. 898 (Minn. 1987); Priglmeier v. Stellar Concrete & Masonry, No. WC04-228 (W.C.C.A. Apr. 25, 2005).
The employee introduced no evidence from the physicians who prescribed the medications and no evidence that all of the claimed medications were related to the employee’s work injury. In his November 12, 2009, report, Dr. Wengler stated, “the medications prescribed were to control pain and spasm associated with her low back problems. Some of the medications that she was provided were for the situational depression associated with intractable pain unresponsive to treatment. These meds were entirely appropriate.” This statement does not provide evidence which would support an award on this issue. There is no indication of the medications which Dr. Wengler considered, no indication as to what period of time is discussed, and no indication as to what health care providers were providing these prescriptions.
The decision of the compensation judge on this issue is affirmed.
The employee also appealed the compensation judge’s denial of the prescription for Zoloft. She testified at the hearing that this medication was necessary to treat depression caused by her work injury and that this medication was prescribed by Dr. Trude. No records from Dr. Trude or any other medical evidence was introduced to support this claim or a claim that the medication was used to treat pain separately from an emotional condition. The compensation judge’s decision on this issue is affirmed as well.
Finally, the employee claims that the compensation judge erred in refusing to consider the compensability of the bills from RS Medical. The employee was prescribed the use of a TENS unit while she was treating at HFA and one was provided to her by RS Medical. There is some question as to the timing here, but at some point the employee decided the unit was not helpful and she returned it. A bill remained for the unit rental and RS Medical intervened in February 2009 in response to an intervention notice sent to them by the employee’s attorney.
At the hearing, the employee’s attorney advised the compensation judge that the employee’s position was that the TENS unit prescription, although related to the employee’s work injury, was not reasonable and necessary treatment for that injury. Given that position, the compensation judge concluded there was no claim for the TENS unit bill and she did not have jurisdiction to consider whether the bill was for reasonable and necessary treatment.
On appeal, the employee argues that the compensation judge should have decided whether the RS Medical bill was excessive. We disagree. At a hearing, the compensation judge is expected to determine contested issues of fact and law. Minn. Stat. § 176.371. The compensation judge may not issue an advisory opinion in the absence of a justiciable controversy. See Grove v. United Hosp., No. WC05-129 (W.C.C.A. July 5, 2005) and cases cited therein. The liability of an employer for medical expenses is limited to those expenses which are causally related and which are reasonable and necessary. Minn. Stat. § 176.135. In agreeing that the charges were not reasonable and necessary, the employee was also agreeing that there was no claim for those expenses. The employee, accordingly, raised no controversy for the compensation judge to determine. The decision of the compensation judge on this point is affirmed.
Medica has cross-appealed from the compensation judge’s denial of its intervention claim. Medica sought reimbursement for medical bills it paid on behalf of the employee for treatment provided between January 6, 2003, and August 7, 2007, when Medica’s coverage ended. In considering Medica’s claim, the bills should be divided into those for services before the 2007 settlement and the bills for services after that date.
The key question on the 2003-2007 bills is whether Medica was an intervenor and a party at the time of the settlement in March 2007. Medica, through its agent Healthcare Recoveries, filed its petition to intervene in January 2003, shortly after the November 2002 settlement. The 2002 settlement extinguished Medica’s claims up to that date for its failure to intervene. Medica does not challenge that result and is making no claim for bills that it had paid before November 2002.
When Medica intervened in January 2003, there was no pending litigation. Despite that, OAH issued a “Notice of Intervention Status” to Medica. The compensation judge concluded that the notice was issued in error and had no legal effect. She also found that, as a result, Medica was not a party to the subsequent claim filed by the employee in 2003 and settled in 2007. We disagree.
When Medica received an intervention notice in November 2003, Healthcare Recoveries had already received a Notice of Intervention Status from OAH. It was reasonable for Medica to conclude that it did not have to intervene yet again, since it had already been told in January 2003 that it was an intervenor by an agency of the State of Minnesota. In addition, after the employee filed her medical request, there were at least 11 different notices and orders issued by OAH and sent to the parties in the litigation. All of those notices were sent to Healthcare Recoveries and most were sent separately to Medica as well. Given these facts, we are not willing to conclude that Medica should be penalized for an error by OAH, especially when the proposed penalty is an extinguishment of all claims. Further, we find it significant in this regard that although the 2007 settlement extinguished the potential intervention rights of some providers who had received a notice of right to intervene in November 2003 and who had not responded, no such assertion was made with regard to Medica.
The compensation judge also denied Medica’s claim based on a finding that Medica’s delay had materially prejudiced the employee and employer. As we have already discussed, we have found no delay by Medica in asserting its intervention claim and, in any event, no evidence of any prejudice to the employee or employer exists in the record. A statement made by counsel at the hearing that in some unspecified manner there was prejudice does not constitute evidence and does not support a finding of material prejudice that would preclude the assertion of an intervention claim. That finding is vacated.
We conclude that Medica was a party in this matter at the time of the March 2007 settlement. The next question is whether Medica was excluded from negotiations that led to the settlement.
We are not aware from the record whether a settlement proposal was made to Medica or whether Medica was even advised that a settlement was being discussed. At the time of the settlement in 2007, the only dispute between the employee and employer was whether the treatment received by the employee beginning with her surgery by Dr. Stark in January 2003 was causally related to the work injury and was reasonable and necessary. The employee was claiming that she needed that surgery and subsequent treatment. The employer denied causation and reasonableness. It was only because Medica stepped in and paid those bills that the employee was able to continue to receive the treatment she and her doctors believed to be necessary. Despite the central role of Medica in the litigation, Medica was not even mentioned in the stipulation.
However, because of the absence of any evidence on this question, we conclude that this case must be remanded for an evidentiary hearing as to whether or not Medica was excluded from settlement discussions. Case law is clear as to the consequences if an intervenor is excluded from settlement negotiations. In that situation, the intervenor is entitled to full reimbursement. Brooks v. A.M.F., 278 N.W.2d 310, 31 W.C.D. 521 (Minn. 1979); Parker/Lindberg v. Friendship Village, 395 N.W.2d 713 (Minn. 1986); Gebrekidan v. LSG Sky Chefs, Inc., 70 W.C.D. 71 (W.C.C.A. 2010). We emphasize that the status of Medica as an intervenor in March 2007 is not in dispute and the issue at the hearing with regard to Medica’s claim for the 2003-2007 bills is limited to Medica’s involvement in the March 2007 settlement. If substantial evidence exists to support a finding that a reasonable settlement offer was extended to Medica in March 2007, then Medica should be allowed to present its claim pursuant to Parker/Lindberg.
Medica’s cross-appeal also raised the issue of interest on its payment. Even though the compensation judge found Medica’s right to reimbursement was precluded, she found that interest would be owed only from December 1, 2009, the date that the compensation judge said an itemization of paid bills was provided. We vacate that finding.
In its cross-appeal, Medica argues that it is entitled to interest from the date of payment of the various bills, citing to Minn. Stat. § 176.191, subd. 3, and this court’s decision in Titera v. Clearwater-Polk Elec. Co-op, Inc., slip op. (W.C.C.A. Oct. 2, 2002). The compensation judge did not cite Minn. Stat. § 176.191, subd. 3, in her decision. In response to Medica’s claim, the employer argues that Titera does not apply since the employer did not question the compensability of the injury but only the compensability of the treatment received for the injury. Further the employer contends it would not be fair to reward Medica for its delay in handling of this case.
We agree with Medica on this issue. First, as we stated earlier, we reject the argument that Medica improperly delayed its involvement in this matter. Unquestionably, there were delays in the resolution of the employee’s claims. It took almost 3½ years for the 2003 medical request to be resolved and more than 2 years for the 2008 medical request to go to hearing. There is no indication, however, that Medica had any role in these delays. The significant amount claimed by Medica as interest is due to actions by the employee and employer and to the delays in resolving claims, not to action or lack of action by Medica.
We also reject the argument here that Minn. Stat. § 176.191, subd. 3, does not apply in this case. Although the employer admitted that a work injury occurred on November 20, 1998, it has consistently argued that there was no causal relationship between that injury and the treatment which was received from 2003 to the 2007 settlement and from the 2007 settlement to 2010. Medica was mandated to pay for the disputed treatment under Minn. Stat. § 176.191, subd. 3. Since payment was made pursuant to that section, that section also determines when interest on any reimbursement begins to run. We held in Titera that interest under that section runs from the date the group insurer paid the bills. Pursuant to Minn. Stat. § 176.191, subd. 3, Titera, and Johnson, we conclude Medica is entitled to interest on its payment of the employee’s medical expenses from the date those payments were made if Medica is found entitled to reimbursement on remand.
We turn then to the question of medical bills paid by Medica for services provided between March and August 2007. The compensability of that treatment was an issue at the hearing in 2010. Since the 2003 intervention filed by Medica was never considered, Medica remained a party in the 2010 hearing.
Most of the bills paid by Medica for services from March to August 2007 were for treatment provided at HFA. As we noted earlier, the employer’s attorney stated to the compensation judge that HFA bills and the employee’s co-pay at HFA would be paid. Given those assertions, we see no basis for denying payment to Medica if the employee has been paid. If there has been a settlement between the employee, the employer, and HFA on those bills, given our discussion to this point, it should be apparent Medica must be included in discussions of that settlement. On remand, the compensation judge should determine if there has been payment of HFA bills by the employer. If so, reimbursement with interest under Minn. Stat. §176.191, subd. 3, must be ordered for Medica. If there has been a compromise, inquiry should be made whether Medica was included in settlement discussions and an order issued which is consistent with this decision. To the extent that Medica’s claim for the March to August 2007 payments were for services provided by providers other than HFA, we conclude that Medica is entitled to present its claims for payment on remand.
Finally, both the employee and Medica have appealed from the compensation judge’s finding that the January 2003 surgery performed by Dr. Stark was not reasonable or necessary. We conclude this determination was made in error. In the 2007 settlement, the employee compromised and settled all of her claims from that surgery as part of her settlement of her medical claims. Accordingly, the reasonableness of the surgery was not in dispute between the employee and employer. Further, as we noted previously, Medica was not allowed to participate in the hearing. The compensation judge’s finding as to reasonableness and necessity is vacated.
 This notice to Medica was sent to an address in Salt Lake City. No notice was sent to Healthcare Recoveries or to the address used for Medica between 2003 and 2006. Previous notices to Medica were sent to Duluth and to San Antonio, Texas.
 Our decision here does not address the present status of the intervention claims of RS Medical, Dr. Stark, or HFA. Those issues were not presented to this court.
 At the hearing, the compensation judge did not allow Medica to participate because it was not represented by an attorney. This was error. Minn Stat. § 176.361 specifically allows for representation of an intervenor by a non-attorney.