DAVID WATSON, Employee/Appellant, v. WIL-KIL PEST CONTROL and SEDGWICK CLAIMS MGMT. SERVS., INC., Employer-Insurer.
WORKERS’ COMPENSATION COURT OF APPEALS
NOVEMBER 1, 2012
ATTORNEY FEES - RORAFF FEES; ATTORNEY FEES - GENUINE DISPUTE. Substantial evidence supports the compensation judge’s determination that there was no genuine dispute over the employee’s need for surgery. The judge’s denial of the employee’s claim for Roraff fees is accordingly affirmed.
Determined by: Stofferahn, J., Johnson, J., and Milun, C.J.
Compensation Judge: Cheryl LeClair-Sommer
Attorneys: Vincent A. Peterson, Law Offices of Donald F. Noack, Mound, MN, for the Appellant. Deb Sundquist and Radd Kulseth, Aafedt, Forde, Gray, Monson & Hager, Minneapolis, MN, for the Respondents.
DAVID A. STOFFERAHN, Judge
The employee appeals from the compensation judge’s denial of Roraff fees, finding that no genuine dispute existed as to the payment of surgical expenses. We affirm.
The employee, David Watson, sustained an admitted work injury to his right foot and ankle on July 2, 2008. As the result of his work injury, the employee had right foot and ankle surgery in February 2009 and again in October 2009. He developed an infection following the October 2009 surgery which required further surgical treatment. Because of the employee’s continued pain, he was referred to Dr. J. Chris Coetzee at Twin Cities Orthopedics. Dr. Coetzee recommended revision of the talonavicular fusion that had been done in October 2009. This fourth surgery was done by Dr. Coetzee in September 2010.
The employee continued to have significant right foot and ankle pain and Dr. Coetzee ordered a repeat CT scan of the right foot and ankle. The CT scan was done May 12, 2011, and showed a near complete fusion of the subtalar joint, but no arthrodesis of the talonavicular joint. Dr. Coetzee recommended injection of the talonavicular joint to determine whether the nonunion there was generating the employee’s pain. The injection was performed on June 14, 2011, and completely relieved the employee’s symptoms.
The insurer, Sedgwick Claims Management, had assigned Kathryn Anderson, an employee and registered nurse, to act as telephonic case manager. Ms. Anderson testified that she had been in periodic contact with Dr. Coetzee’s office in the spring of 2011. On May 9, she received a request from Dr. Coetzee’s office for approval of the CT scan, and she provided that authorization. On June 3, 2011, she provided approval for the June 14, 2011, injection.
Ms. Anderson telephoned Dr. Coetzee’s office on June 23, 2011, and was told that the employee was not scheduled to see Dr. Coetzee again until August, when he would be undergoing surgery. Ms. Anderson testified that this was the first time the insurer had heard anything about additional surgery. She left a message with Lisa Long, Dr. Coetzee’s assistant, requesting that Dr. Coetzee provide the insurer with information about the nature and rationale for the proposed surgery.
When no information had been received by July 14, 2011, Ms. Anderson again phoned Dr. Coetzee’s office and again talked to Lisa Long. Ms. Long told her that the doctor was on vacation and that she had not been able to get him to dictate the information the insurer had requested, but she would try to obtain this information and fax it to her later. Ms. Long did inform Ms. Anderson that the surgery was scheduled for August 15, 2011.
On August 2, 2011, Ms. Anderson again called Twin Cities Orthopedics to ask for an explanation of the need for surgery. She stated that the insurer would not be able to authorize payment for further surgery without a note dictated by the physician providing such an explanation. The records of Twin Cities Orthopedics indicate that someone on the staff there emailed Dr. Coetzee on that date, asking him to dictate a note “ASAP” to send to the insurer.
The records of Twin Cities Orthopedics also show that on July 19, 2011, Dr. Coetzee’s physician’s assistant dictated a “phone note” stating that the employee had been sent for a diagnostic injection after his continued right foot pain following his prior talonavicular fusion, and that the injection had provided 100 percent relief. He also stated in the note that he and Dr. Coetzee were of the opinion that the employee would best be served with a repeat talonavicular fusion. Apparently an attempt was made to fax this phone note to Ms. Anderson on August 9, 2011. However, both Ms. Anderson and the adjustor assigned to the file, Michelle Messink, testified that they did not receive any communication from Dr. Coetzee’s office on August 9, 2011.
On August 12, 2011, Dr. Coetzee’s office left a telephone message for the insurer asking whether payment for the surgery had been authorized. Michele Messink, the adjustor on the file, returned the call, stating that the insurer did not have any information which would allow it to determine if the surgery was reasonable and necessary. She advised the doctor’s office that, as a result, the surgery would not be approved, and the insurer would be requesting an independent medical evaluation (“IME”) to review the alleged need for surgery.
The surgery was performed on an outpatient basis on August 15, 2011, at Fairview Southdale Hospital, and was billed to the employee’s health insurer at the employee’s request. The surgical procedure notes state that the preoperative diagnosis was of degenerative changes of the right talonavicular joint and describe the procedure as a right talonavicular fusion augmented with AlloStim.
On August 22, 2011, Ms. Messink scheduled an IME for September 17, 2011, with Dr. Tilak Ghose. Notice of the IME was sent to the employee on August 30, 2011.
On August 26, 2011, the employee filed a claim petition seeking approval for the surgery with Dr. Coetzee. The July 19 phone note and the August 15 surgical records were attached to the claim petition as supporting documentation. The claim petition was received by the insurer on August 31, 2011, and, according to Ms. Messink’s testimony, this was the first time that the insurer had been provided with the July 19 phone note or any information as to the nature of the surgery.
On September 12, 2011, the employee’s counsel notified the insurer that the employee would not attend the IME scheduled for September 17.
The insurer filed its answer to the claim petition on September 14, 2011. In the answer, the insurer stated that it neither admitted nor denied the reasonableness and necessity of the surgery, and requested the right to a “second opinion,” noting that the employee had canceled a scheduled IME. The insurer arranged for a new IME, this time with Dr. Lance Silverman, a foot and ankle specialist. Dr. Silverman’s earliest available date for the IME was October 12, 2011.
The Office of Administrative Hearings scheduled an expedited hearing on the employee’s claim petition for November 23, 2011. The insurer received notice of the scheduled hearing on October 5, 2011.
On October 12, 2011, the employee attended the IME with Dr. Silverman. Dr. Silverman’s report was dated November 10, 2011. In his report, he agreed that the employee’s medical treatment had been appropriate and was causally related to the work injury. Following its receipt of the IME report, the insurer approved payment for the surgery.
The employee’s attorney filed a statement of attorney’s fees on December 5, 2011, seeking fees, costs and disbursements for obtaining approval for the employee’s surgery. The fee statement requested hourly fees in the amount of $4,773.00, fees pursuant to Minn. Stat. §176.081, subd. 7, of $1,356.90, and costs and disbursements totaling $397.85. The employer and insurer objected to the fee request stating that the requested fees were improper in the absence of a genuine dispute over the payment of the surgical expenses and that the employee’s attorney had already received $13,000.00 in contingency fees in an earlier settlement.
A hearing was held on the fee request before Compensation Judge Cheryl LeClair-Sommer on May 7, 2012. In her findings and order, the compensation judge found that the evidence failed to support a conclusion that a genuine dispute existed over the approval of the surgical procedure or payment of medical expenses related to the surgery. The compensation judge also determined that the employee’s attorney had failed to properly file a request for fees in excess of $13,000. The compensation judge denied the claim for attorney fees, and the employee appeals the denial.
In determining attorney fees for an employee’s attorney, the statute provides that the fee may not be calculated on the basis of an undisputed claim. Further, the existence of a disputed claim is dependent on a “disagreement after the employer or insurer has had adequate time and information to take a position on liability.” Minn. Stat. § 176.081, subd. 1. The compensation judge found that the evidence established that “the insurer’s actions represent a reasonable time to obtain information to take a position on liability.” (Finding 9).
The employee argues on appeal that this finding is clearly erroneous and is contrary to our decision in Alden v. Mills Fleet Farm, No. WC10-5081 (W.C.C.A. July 29, 2010).
In Alden, this court considered a compensation judge’s award of Roraff fees in a case dealing with a claimed delay by an insurer in the approval of inpatient low back surgery. This court noted that the compensation judge’s award largely rested “on the fact that the insurer exercised its right to an independent medical examination prior to approving the requested procedure.” Alden, at 5. Citing Abernathy v. Asplundh Tree Expert, 60 W.C.D. 310 (W.C.C.A. 2000), the court stated that it was well-established that the exercise of the right to an IME, standing alone, was insufficient to establish the existence of a genuine dispute to support an award of attorney fees.
The employee in Alden had also alleged, however, that the insurer had improperly delayed its exercise of this right. We stated that the medical treatment parameters establish a comprehensive scheme governing requests for nonemergency surgery and that the surgery at issue required prior notification and approval under Minn.R. 5221.6050, subp. 9. Noting that the insurer had scheduled and completed its IME and made a decision approving the surgery within the 45-day time frame set forth for such approvals in the rule, we held that there was “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.” Id.
Based on the holding in Alden, the employee argues in the present case that if an insurer decides to use an IME to ascertain its liability for proposed surgery, the insurer must complete the IME and reach a determination within 45 days. The employee states that, even if the interval between the cancelled IME date and the date of the rescheduled IME is subtracted out as being beyond the insurer’s control, the insurer took 48 days to complete the process and approve payment for the surgery. Accordingly, the employee argues, the compensation judge erred in finding that the insurer had not taken an unreasonable time to make its determination.
The compensation judge noted that the proposed surgery was an out-patient procedure for which notification and pre-approval is not required under Minn.R. 5221.6050. Accordingly, the compensation judge concluded that the rule and Alden did not apply in this case. We agree.
The employee argues that the compensation judge erred in making a distinction between inpatient and outpatient surgery. He contends that the employee’s claim petition seeking payment for the surgery was set on for an expedited hearing, and argues that the distinction made by the judge is at odds with the right to an expedited hearing under Minn.R. 1420.2150, subd. 1. He argues that where there is an expedited hearing, the insurer is on notice that it should reach a quick decision on liability, and that this requires that a stricter standard be applied in judging the timeliness of the insurer’s decision-making process.
We disagree. The employee’s argument fails to note that an expedited hearing was not appropriate in this case. The cited rule states very specifically that an expedited hearing will be held “if the surgery or treatment has not been provided at the time of hearing.” Here, the surgery had taken place even before the claim petition was filed.
Since Alden does not apply here, the question of whether a genuinely disputed claim existed in this case was one of fact for the compensation judge. Freeman v. Tri-County Hosp., slip op., (W.C.C.A. July 10, 2002; Biederman v. Win Stephens Buick, 58 W.C.D. 497 (W.C.C.A. 1998). The compensation judge concluded that the failure of Dr. Coetzee’s office to provide the insurer with specific information about the proposed surgery and the employee’s cancellation of the first IME appointment were the causes of most of the delay in the insurer’s decision on liability. The compensation judge further noted that the surgery was a nonemergency procedure and was not delayed by the insurer’s deliberations. The compensation judge concluded that the insurer had not taken an unreasonable time to make its determination and that the evidence failed to support a conclusion that a genuine dispute existed which would support an award of attorney fees.
We find substantial evidence in the record as a whole to support this finding, and the compensation judge’s decision is affirmed.
 Roraff v. State, Dep't of Transp., 288 N.W.2d 15, 32 W.C.D. 297 (Minn. 1980).