The intervenor, Lakeview Hospital, appeals from the compensation judge’s denial of Lakeview Hospital’s claim for payment of its Spaeth balance along with the compensation judge’s determination that Lakeview Hospital is required to reimburse the self-insured employer and its administrator in the amount of $52,809.36.  We reverse.

This case has a long and complicated history.  The employee, Lon Gamble, fell from a ladder at work on May 24, 2010.  The self-insured employer, Twin Cities Concrete Products, admitted liability for the injury and paid various workers’ compensation benefits.  As a result of his injury, the employee began to experience low back pain with radiation down through both buttocks and legs.

The employee’s treating physician, Dr. Christian DuBois, recommended a two-level fusion from L4 to S1.  The self-insured employer denied payment for the surgery, arguing that it was not reasonable or necessary treatment, based, in part, on the independent medical examination and opinions of Dr. David Florence.  Nonetheless, the employee proceeded with the fusion surgery on April 20, 2011.  Dr. DuBois performed the fusion at Lakeview Hospital.

Lakeview Hospital initiated with its billing procedure following the employee’s fusion surgery.  On April 29, 2011, Lakeview Hospital completed its itemized bill for the fusion surgery.  The total charges for goods and services provided by Lakeview Hospital for the fusion surgery amounted to $67,460.25.  Lakeview Hospital sent its bill to the employee’s health insurer, Minnesota Laborers’ Health & Welfare Fund (the Fund), on May 2, 2011.  Lakeview Hospital received a contractually adjusted payment from the Fund in the amount of $52,809.36 on May 23, 2011.

On May 25, 2011, Lakeview Hospital submitted a bill to the employee for a copayment amount totaling $4,531.83.

On June 7, 2011, the case came on for hearing before Compensation Judge Mesna.  The Fund was the only intervenor at the hearing.  The issues raised at hearing included “whether the two-level fusion was causally related to the work injury,” and “whether the fusion surgery was reasonable and necessary.”  The employee’s medical bills, including those for the fusion, had been paid by the Fund.  The Fund prepared an itemized statement of the payments it made to various health care providers, including Lakeview Hospital, which was submitted in a letter dated June 3, 2011.  The self-insured employer asserts that it was not aware of Lakeview Hospital’s potential intervention interest until June 6, 2011, the day before the hearing.

All parties agree that Lakeview Hospital was not given timely notice of its right to intervene with regard to the June 2011 hearing.  Nonetheless, the hearing proceeded on June 7, 2011, with the Fund as the only intervenor at that hearing.

On June 27, 2011, Lakeview Hospital sent a second bill to the employee for his copayment amount.

In a findings and order, served and filed on June 28, 2011, the compensation judge found that the employee’s treatment for his low back had been causally related to his work injury, but he was “persuaded by the opinion of Dr. David Florence that the fusion surgery was not reasonable and necessary treatment.”  Because the employee’s treatment had been causally related to his work injury, the compensation judge found that the Fund was entitled to reimbursement for its payments from the self-insured employer.  Citing Chrz v. Sacred Heart Hospice, slip op. (W.C.C.A. Feb. 13, 1990), the compensation judge also found that “to the extent that any of the bills were for treatment determined herein to be not reasonable and necessary, the self-insured employer may seek reimbursement from the providers.”  Neither the self-insured employer nor the employee appealed the compensation judge’s June 2011 findings and order.

In late July 2011, Lakeview Hospital sent a collection letter to the employee and left a telephone message for him.  The employee subsequently called Lakeview Hospital and stated that his case was settled, and he believed the workers’ compensation insurer had agreed to pay his bills.  On August 1, 2011, Lakeview Hospital sent a bill to the self-insured employer.  On September 13, 2011, the self-insured employer indicated that it was denying payment for the surgery arguing that it was unreasonable and unnecessary as indicated in the June 2011 findings and order.  Shortly thereafter, a representative of the self-insured employer informed Lakeview Hospital that the employer believed the unpaid balance would be the employee’s responsibility.

Lakeview Hospital and counsel for the employee spoke by telephone on October 10, 2011.  The employee’s counsel reportedly informed Lakeview Hospital’s representative that the court had ordered the providers to write off their balances.  Lakeview requested a copy of the findings and order, which it received on November 25, 2011.  On December 19, 2011, Lakeview Hospital served and filed a motion for a hearing on the issue of whether the parties failed to provide proper intervention notice, pursuant to Minn. R. 1420.1850, subp. 4.^[1]  The hospital also served and filed an intervention motion on December 20, 2011.

The Office of Administrative Hearings denied intervention status because there were “no disputes pending” as of December 28, 2011.  The motion for a hearing under Rule 1420.1850, subp. 4, was not addressed.

In the meantime, the self-insured employer reimbursed the Fund for the payments it made related to the employee’s fusion surgery.  Then, on February 7, 2012, the self-insured employer filed a medical request seeking reimbursement from various health care providers, including Lakeview Hospital, for the payments the self-insured employer had reimbursed to the Fund relating to the fusion surgery.  On March 2, 2012, Lakeview Hospital served and filed a motion for intervention and response to the medical request.

A conference was held at the Office of Administrative Hearings on April 3, 2012.  The proceedings were referred for a full evidentiary hearing, which took place before Compensation Judge Mesna on September 5, 2012.

The compensation judge again found that the two-level fusion performed at Lakeview Hospital in April 2011 was not reasonable and necessary treatment.  However, the compensation judge noted that although there had been a prior hearing in June 2011, “the determinations in that case are not binding on Lakeview Hospital because it was not a party in that case.”  All parties agreed that Lakeview Hospital was not given timely notice of its right to intervene with regard to the June 2011 hearing.  As such, the compensation judge found that there was no need for a hearing pursuant to Minn. R. 1420.1850, subp. 4.

The compensation judge then found that although Lakeview Hospital was not given notice of its right to intervene in the first proceeding, it was not entitled to payment of its balance because “full reimbursement for an intervention interest would be due only for those items that are compensable under the workers’ compensation law.”  In his memorandum of law, the compensation judge indicated that there had been “no prejudice to Lakeview Hospital by relitigating the reasonableness and necessity issue.”  The compensation judge stated that he felt Lakeview Hospital was “in a better position to litigate the issue now than they would have been in 2011” because of a longer period of time between the surgery and the hearing.  He also stated that any prejudice to the original parties by having to “relitigate” the claim was “a reasonable penalty for failure to notify a potential intervenor of its right to participate in the first hearing.”

Ultimately, in reliance on the Chrz case, the compensation judge determined that “the employer is entitled to reimbursement of the amounts paid to the providers in connection with the April 20, 2011 surgery.”  The compensation judge then ordered Lakeview Hospital to reimburse the self-insured employer in the amount of $52,809.36.

In reviewing cases 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.  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, “[f]actfindings are clearly erroneous only if the reviewing court on the entire evidence is left with a definite and firm conviction that a mistake has been committed.”  Northern States Power Co. v. Lyon Foods Prods., Inc., 304 Minn. 196, 201, 229 N.W.2d 521, 524 (1975).  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 the evidence or not reasonably supported by the evidence as a whole.”  Id.

“[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).

On appeal, Lakeview Hospital argues that it is entitled to payment in full for its bill relating to the fusion surgery because it was not given timely notice of its right to intervene before the June 2011 hearing.  We agree.

Minn. Stat. § 176.361 provides a right to intervene to “A person who has an interest in any matter before the Workers’ Compensation Court of Appeals, or commissioner, or compensation judge such that the person may either gain or lose by an order or decision . . . .”  Minn. R. 1415.1100 requires notice of intervention rights to any potential intervenors.  Attorneys, “whether representing employees, employers, or any other parties to a workers’ compensation proceeding, shall ask their clients whether a third party, other than the workers’ compensation insurer, has paid or provided benefits or services to the employee or on the employee’s behalf . . . .”  Minn. R. 1415.1100, subp. 1.  Upon disclosure of the existence of a potential intervenor, “the attorney must promptly serve the potential intervenor with written notice of its right to petition for intervention and reimbursement . . . .”  Minn. R. 1415.1100, subp. 2; see also Minn. R. 1415.1100, subp. 3 (requiring prompt notice to a “potential intervenor whose interest arises upon payment made or services rendered after the petition, answer, rehabilitation request, or medical request was filed”).

“Failure to comply with the notice requirements . . . may result in the matter being stricken from the hearing or conference calendar, or other sanction under part 1420.3700, if the judge or commissioner finds the noncompliance materially prejudices the rights and liabilities of the other parties or the potential intervenor.”^[2]  Minn. R. 1415.1100, subp. 4.  “Further proceedings may be ordered under part 1420.1850 if an intervenor or potential intervenor claims to have been effectively excluded from a binding determination or from settlement negotiations or has been unable to reach a resolution of its claim at the time the other parties have resolved their claims.”  Id.

It is well established that where a potential intervenor is excluded from settlement negotiations or other proceedings resulting in a final resolution of the employee’s claim, the potential intervenor is entitled to full reimbursement of its claim.  See Brooks v. A.M.F., Inc., 278 N.W.2d 310, 314-15, 31 W.C.D. 521, 530-31 (Minn. 1979) (companion case to Hendrickson v. Central States Insulation, Inc., 278 N.W.2d 310, 31 W.C.D. 521 (Minn. 1979)); Le v. Kurt Mfg. Co., 557 N.W.2d 202, 55 W.C.D. 650 (Minn. 1996); Brown v. City of Minneapolis, Public Works, 71 W.C.D. 645 (W.C.C.A. 2011); Newstrand v. Anderson Fabrics, 59 W.C.D. 243 (W.C.C.A. 1999).  Here, the record establishes that the fusion surgery took place on April 20, 2011, nearly seven weeks before the June 2011 hearing.  Lakeview Hospital sent its bill to the employee for a copayment amount on May 25, 2011.  The Fund prepared and submitted an itemized statement of its payments to various health care providers, including Lakeview Hospital, before the June 2011 hearing.  Counsel for the self-insured employer and counsel for the employee received the itemization of payments from the Fund, including those made to Lakeview Hospital by June 6, 2011.  The reasonableness and necessity of the fusion surgery was one of the primary issues at the hearing on June 7, 2011.  That procedure had been performed at Lakeview Hospital, and the Fund had already made payments to Lakeview Hospital.  Yet, as the parties agree, Lakeview Hospital was not provided with notice of its right to intervene before the June 2011 hearing.

On appeal, the self-insured employer and the employee argue that although Lakeview Hospital was not given notice, neither the employer nor the employee intended to exclude the hospital from any negotiations or the June 2011 hearing.  The notice statute and rules do not distinguish between intentional or unintentional exclusions of an intervenor from the proceedings.  See, e.g., Minn. R. 1420.1850, subp. 4 (stating that where “a potential intervenor claims the potential intervenor was not served with a notice of the right to intervene and a settlement or decision is now final, the potential intervenor may request a hearing on the issue of whether the parties failed to provide proper notice under part 1415.1100”).  Furthermore, in Newstrand, this court held, pursuant to Brooks, that the intervenor was “entitled to reimbursement and the relative degree of fault of the parties is immaterial.”  59 W.C.D. at 248.  The employers involved in that case argued that despite proper inquiry, the employee failed to tell them she had received and was receiving unemployment compensation benefits.  Id. at 246-47.  As such, the employers argued that they had “‘clean hands’ and the fault here lies with the employee.”  Id. at 248.  However, as this court stated, there was no significant distinction as to the knowledge of one party versus the other.  Id. at 247-48.  As such, we held that the potential intervenor had been excluded from the settlement in that case, through no fault of its own, and it was entitled to full reimbursement.  Id. at 248-49.

More important, the fact remains here that both the employee and the employer were aware of Lakeview Hospital’s potential intervention interest before the June 2011 hearing when the Fund submitted its itemization of payments.  Nonetheless, the parties failed to provide notice to Lakeview Hospital.  There was no action taken to protect the potential intervention interests or to possibly continue the hearing.  See Le, 557 N.W.2d at 204, 55 W.C.D. at 652-53 (citing Johnson v. Blue Cross & Blue Shield, 329 N.W.2d 49, 52 (Minn. 1983)); Minn. Stat. § 176.361; Minn. R. 1415.1100; Minn. Stat. § 176.341, subd. 4 (allowing for a continuance “when the underlying eventuality is unforeseen, is not due to lack of preparation, is relevant, is brought to the chief administrative law judge’s attention in a timely manner and does not prejudice the adversary”).

The employer and insurer also argue that cases such as Brooks involve settlement proceedings and are, therefore, inapplicable.  We disagree.  Full reimbursement, pursuant to Brooks, has been applied in the context of a hearing.  See, e.g., Brown, 71 W.C.D. at 653-54 (citing Brooks, 278 N.W.2d 310, 31 W.C.D. 521; Le 557 N.W.2d 202, 55 W.C.D. 650; Newstrand, 59 W.C.D. 243).  The proper focus is on whether the award results in “a final resolution of the employee’s claim.”  Id.  Certainly, a hearing and subsequent findings and order constitute a final resolution of the employee’s claim.

Brown involved multiple hearings, as well.  Before the first hearing in Brown, the employee was receiving disability payments, and the employer was informed of those payments and the resulting potential intervention.  71 W.C.D. at 647.  Nonetheless, the parties proceeded to a hearing without providing notice to the potential intervenor.  Id.  As such, this court held that “An intervenor or potential intervenor that is excluded from negotiations or a hearing resulting in a final resolution of the employee’s claim is entitled to full reimbursement” and affirmed the compensation judge’s decision to award full reimbursement to the potential intervenor.  Id. at 653-54 (citing, generally, Brooks, 278 N.W.2d 310, 31 W.C.D. 521; Le 557 N.W.2d 202, 55 W.C.D. 650; Newstrand, 59 W.C.D. 243).  Furthermore, this court noted that the fact that the employee provided notice to the potential intervenor prior to subsequent proceedings “did not obviate the parties’ obligation to provide notice to [said potential intervenor] prior to” the initial hearing.  Id. at 653-54 n.4.

The statute and rules clearly require intervention notice to any entity that may stand to “either gain or lose by an order or decision,” and the notice requirements apply once any type of workers’ compensation proceeding has commenced.  Minn. Stat. § 176.361; see also Minn. R. 1415.1100; Minn. R. 1420.1850, subp. 4.  Because an intervenor may only intervene in an existing proceeding, once those proceedings have commenced, they must be conducted so as to protect the intervenor’s rights.  See Le, 557 N.W.2d at 204, 55 W.C.D. at 652-53 (citing Johnson, 329 N.W.2d at 52); Brooks, 278 N.W.2d at 315, 31 W.C.D. at 531.

The self-insured employer argues that because the compensation judge determined that the underlying benefits were unreasonable and unnecessary, Lakeview Hospital could not have been entitled to payment for those services, regardless of whether they received intervention notice.  It argues that because Lakeview Hospital had an opportunity to present its position at the September 2012 hearing, it would not be in the interest of public policy to award the full balance of the intervenor’s claim for services that were not compensable.  However, in examining whether an intervenor has been precluded from exercising its intervention rights, the ultimate compensability of the treatment at issue is irrelevant.  A compensation judge’s eventual decision regarding compensability has no bearing on the question of whether an intervenor has been excluded from the proceeding resulting in that decision.  See Minn. R. 1420.1850, subp. 4.  Thus, the compensation judge erred by using his ultimate decision that the surgery was unreasonable and unnecessary to excuse the fact that Lakeview Hospital had been excluded from the June 2011 hearing.

In addition, the compensation judge erred in relying on the case of Chrz v. Sacred Heart Hospice, slip op. (W.C.C.A. Feb. 13, 1990) to deny payment to Lakeview Hospital.  In Chrz, this court awarded reimbursement to the health insurer from the workers’ compensation insurer, and then indicated that the workers’ compensation insurer would need to seek reimbursement from the medical providers for any treatment it felt was unreasonable or unnecessary.  The Chrz case involved Minnesota Statute § 176.191, subd. 3, which provides that when the employer and the workers’ compensation insurer dispute the compensability of the employee’s injury, the medical insurer shall make payment of the medical costs and that if the injury is later determined to be compensable, then the workers’ compensation insurer is to reimburse the medical insurer for the medical costs paid.  This court reasoned that “the general policy of the statute appears to place the risk and burden of having to seek reimbursement for unreasonable and unnecessary charges upon the workers’ compensation insurer that denied liability.”  Id.  Practically, we held that the workers’ compensation insurer would reimburse the health insurer, and the workers’ compensation insurer could then seek reimbursement from the provider for excess charges, because charges for treatment that is unreasonable and unnecessary are, by definition, excessive.

The Chrz case, however, involves a completely different issue than the failure to provide intervention notice.  Furthermore, the procedure outlined in Chrz illustrates the need for a medical provider to be involved in the proceedings.  Here, by relying on Chrz, the compensation judge determined that Lakeview Hospital would need to reimburse the workers’ compensation insurer despite the fact that Lakeview Hospital was never informed that the June 2011 hearing was taking place and was excluded from participation in that hearing.  Although the compensation judge allowed the hospital to “relitigate” the underlying issues at the 2012 hearing, the outcome did not change.  Ultimately, the compensation judge’s reliance on the Chrz case was misplaced because the hospital was not allowed to participate in the hearing that led to the June 2011 reimbursement order.^[3]

The primary issue underlying the litigation here, including both the June 2011 hearing and the September 2012 hearing, is the reasonableness and necessity of the fusion surgery.  The employee’s initial claim petition initiated the proceedings herein, not the medical request the self-insured employer filed to seek reimbursement from Lakeview Hospital.  A potential intervenor is entitled to notice and to make a possible intervention claim where that potential intervenor stands to “gain or lose by an order or decision.”  Minn. Stat. § 176.361.  Lakeview Hospital effectively lost at the time of the June 2011 decision without ever being presented with an opportunity to present its interest at the hearing.  “The burden of economic loss in work-related injuries is to be put on industry . . . .” Johnson, 329 N.W.2d at 52.  An award of full payment to Lakeview Hospital is consistent with the applicable policy of protecting an intervenor’s interest.  As such, we reverse the compensation judge’s September 2012 findings and order as it applies to the interest of Lakeview Hospital, and we award full payment to Lakeview Hospital in relation to the fusion surgery at issue.^[4]