The intervenor, Lakeview Hospital, petitions for further determination of its previous appeal from the compensation judge’s order that it reimburse the employer for the reimbursement the employer made to the Minnesota Laborers Health & Welfare Fund for payments related to the employee’s surgery.  We affirm.

This case has a long and rather complicated background and procedural history.

On May 24, 2010, the employee, Lon Gamble, suffered an injury to his low back in the course and scope of his employment with the self-insured employer, Twin Cities Concrete Products.  Ultimately, the employee’s physician recommended a two-level fusion surgery.  The employee filed a claim petition seeking, among other things, approval for the surgery.  Relying upon the opinion of its IME doctor, Dr. David Florence, the employer denied payment for the recommended surgery.

Thereafter, the employee sought and received approval for the fusion surgery from the Minnesota Laborers Health & Welfare Fund (the Fund).  The fusion surgery was performed at Lakeview Hospital (Lakeview) on April 20, 2011.  Lakeview billed the Fund, who in turn paid a contractually adjusted payment of $52,809.36.^[1]  Lakeview also submitted a bill to the employee for copayment.

The matter came on for hearing before Compensation Judge Gary Mesna in June 2011.  The Fund participated as a formal intervenor.  At no time prior to the hearing was Lakeview put on notice of its intervention rights.  Judge Mesna determined that the fusion surgery was causally related to the work injury, but did not constitute reasonable and necessary treatment.  (Findings and Order, June 28, 2011 at Finding 11.)  He went on to find that the employer was to reimburse the Fund for payments made related to the surgery, and could then proceed to seek reimbursement from the providers.  Specifically, Judge Mesna determined:

Pursuant to the June 28, 2011, Findings and Order, the employer reimbursed the Fund for payments the Fund made for the surgery.  The employer then sought reimbursement from the medical providers for the payment made to the Fund by way of medical request.  Lakeview filed a medical response.  The matter was referred for a full evidentiary hearing.

A hearing was conducted before Compensation Judge Mesna on September 5, 2012.  In his September 21, 2012, Findings and Order, Judge Mesna found that his June 28, 2011, Findings and Order was not binding on Lakeview because it was not a party to the case at that time.  (Findings and Order, September 21, 2012, at Finding 13.)  He went on to again find that the surgery was not reasonable and necessary treatment.  (Id. at Finding 12.)  He also found that the Fund had made payments to four medical providers, including Lakeview, and that the employer had reimbursed the Fund for those payments as was required by the prior findings and order.  (Id. at Findings 17 and 18.)  Judge Mesna then determined:

Lakeview appealed from the September 21, 2012, Findings and Order.  In essence, Lakeview asserted the following issues for review by this court:  (1) whether Lakeview is entitled to full payment of its bill because it was not given timely notice of its right to intervene before the June 2011 hearing; (2) whether the compensation judge erred in applying Chrz v. Sacred Heart Hospice as it is distinguishable and inapplicable to this case; and (3) whether a number of the compensation judge’s findings are supported by substantial evidence in the record, upon which the denial of payment of Lakeview’s bill and the order that Lakeview reimburse the employer, were made.

In its decision dated July 8, 2013, this court reversed the September 21, 2012, Findings and Order upon a determination that Lakeview was entitled to an automatic and full reimbursement of its bill because it was not given proper notice of the June 2011 hearing, pursuant to Brooks v. A.M.F., Inc., 278 N.W.2d 310, 31 W.C.D. 521 (Minn. 1979).  Gamble v. Twin Cities Concrete, No. WC12-5518 (W.C.C.A. July 8, 2013).  This court also determined that Chrz was inapplicable to this case because Chrz did not involve the issue of failure to provide intervention notice, and that the compensation judge’s reliance on Chrz to deny payment to Lakeview was misplaced because Lakeview did not participate in the hearing that resulted in the order to reimburse.^[3]  It was noted that this litigation had been initiated by the employee’s 2010 claim petition, and not the employer’s 2012 medical request, and that Lakeview had effectively lost at the June 2011 hearing, from which it had been excluded.

An appeal was taken from the July 8, 2013, decision of this court.  By its decision dated August 13, 2014, the Minnesota Supreme Court reversed and remanded to this court the issue of whether the surgery was reasonable and necessary treatment.  Gamble v. Twin Cities Concrete, 852 N.W.2d 245 (Minn. 2014).  In doing so, the Supreme Court declined to extend Brooks and its automatic-reimbursement rule to situations where an employer fails to give a medical provider notice of its right to intervene unless the medical provider can show that the lack of notice resulted in prejudice.  Id. at 250.  The court determined that Lakeview had not been prejudiced by its absence from the June 2011 hearing because of the September 2012 de novo review of the issue of whether the surgery was reasonable and necessary, and that Lakeview was therefore not entitled to automatic payment of its full bill.  Id.

In a footnote, the supreme court noted that Lakeview also argued that the compensation judge erred in applying Chrz because Chrz did not involve a failure to provide intervention notice.  Id. at 249 n.3.  The Court considered this argument to lack merit, and went on to explain that the compensation judge did not rely on Chrz for purposes of rejecting the automatic-reimbursement argument, but for purposes of determining that the employer was entitled to reimbursement from Lakeview for payment of medical treatment that was not reasonable and necessary.  Id.  The Court noted that the issue of whether Lakeview is obligated to reimburse the employer was not before the court and it therefore declined to reach it.  Id. at 251 n.6.

The case was then remanded to this court.  The only issue identified for further review was whether the surgery was reasonable and necessary.  Id. at 251.  The issue of whether Lakeview would otherwise be required to reimburse the employer pursuant to Chrz was not identified as an issue on remand.

On remand, this court affirmed the compensation judge’s determination that the surgery was not reasonable and necessary.  Gamble v. Twin Cities Concrete, No. WC14-5757 (W.C.C.A. Feb. 6, 2015).

By petition, Lakeview seeks further determination of its previous appeal from the compensation judge’s order that it reimburse the employer for the payment the employer made with respect to the employee’s unreasonable and unnecessary surgery based upon the holding in Chrz v. Sacred Heart Hospice, slip op. (W.C.C.A. Feb. 13, 1990).

“[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).

The compensation judge ordered the employer to reimburse the Fund for payments made for the employee’s surgery because the surgery was causally related to the employee’s admitted injury.  He then found that the surgery did not constitute reasonable and necessary treatment.  Because the surgery was not reasonable and necessary treatment, he ordered that Lakeview (and the other medical providers who received payments related to the surgery) reimburse the employer in accordance with Chrz v. Sacred Heart Hospice, slip op. (W.C.C.A. Feb. 13, 1990).

In Chrz, the employer and insurer had ceased paying medical benefits on an admitted injury and the employee’s health insurer began paying for treatment pursuant to Minn. Stat. § 176.191, subd. 3.  The matter came on for hearing and the health insurer intervened.  The compensation judge determined that some treatment was reasonable and necessary, and went on to order that the health insurer be reimbursed, but only for the treatment that was reasonable and necessary and within the limitations of the fee schedule.  The health insurer appealed claiming entitlement to full reimbursement.

In concluding that the health insurer was entitled to full reimbursement, as opposed to reimbursement for only treatment deemed reasonable and necessary and within the limitations of the fee schedule, this court reasoned that the language of Minn. Stat. § 176.191, subd. 3, contemplated reimbursements “for all payments made” by the health insurer upon a determination that the injury was compensable.  This court considered that it was the workers’ compensation insurer that had a remedy available should the treatment be excessive, or unreasonable and unnecessary.  That remedy, under Minn. R. 5221.0600, subp. 6, provides that the workers’ compensation insurer is able to seek reimbursement for excessive, or unreasonable and unnecessary treatment, from the provider.  This court noted that the policy behind these provisions is that the risk and burden of seeking reimbursement is placed upon the workers’ compensation insurer who had denied liability.

Lakeview asserts a number of factors are present in Chrz that are not present in this case, such that Chrz and its holding are inapplicable.

First, Lakeview argues that Chrz is distinguishable on the basis that the Fund paid for the surgery pursuant to its express written preauthorization, and not pursuant to the requirement set forth in Minn. Stat. § 176.191, subd. 3, as was done in Chrz.  Minn. Stat. § 176.191, subd. 3, provides that health and disability insurers are obligated to make medical or disability payments should the compensability of an employee’s injury be in dispute.  If the injury is later determined to be compensable, this provision also provides health and disability insurers a right of reimbursement for payments made.  As noted above, this court in Chrz held that that right of reimbursement is for all payments made, regardless of the limitations of the fee schedule or a reasonable and necessity determination.

Second, Lakeview argues that Chrz is distinguishable on the basis that the Fund is not subject to Minn. Stat. § 176.191, subd. 3, because it is not an entity contemplated by the statute.  By its express language, this provision applies to entities governed by Minn. Stat. Ch. 62A, 62C, 62D, 62E, 62R, and 62T.  Lakeview asserts that the employee was covered by the Minnesota Laborers Health and Welfare Fund which is governed by the Employee Retirement Income Security Act of 1974 (ERISA).  Lakeview goes on to cite to a provision within ERISA that states that it preempts state law.  Thus, Lakeview argues, because the Fund is not a type of the enumerated entities contemplated in Minn. Stat. § 176.191, subd. 3, but is governed by federal ERISA law as opposed to state law, the “directive in Chrz providing for reimbursement by Lakeview Hospital to the Employer/Insurer is inapplicable.”  (Petition at p. 23.)

Third, Lakeview argues that Chrz is distinguishable because, unlike the case at hand, the employee in Chrz did not sign a written guaranty of payment for medical expenses incurred at Lakeview.  Lakeview goes on to argue that because there was an express contract between it and the employee for elective treatment, it is entitled to full reimbursement regardless of the reasonableness and necessity of the treatment.

The compensation judge determined that the respective rights of the parties’ required two reimbursements be made.  The Fund paid to Lakeview a contractually negotiated amount for the employee’s surgery and pursuant to the terms of the employee’s benefit plan with the Fund.  The first required reimbursement was to be made to the Fund by the self-insured employer.  The second required reimbursement was to be made to the self-insured employer by the medical providers, including Lakeview.

In its attempts to distinguish Chrz from this case, Lakeview appears to take issue with the first required reimbursement - - that the employer was obligated to reimburse the Fund.  Lakeview may be correct in its assertions that the Fund was not an entity listed in Minn. Stat. § 176.191, subd. 3, and that it was not required to make payments pursuant to that provision.  Nonetheless, the employer was obligated to reimburse the Fund because the employee’s injury was compensable, and was therefore not covered pursuant to the terms of the applicable Plan.^[4]  See Polfliet v. Northern Lights Distrib., No. WC10-5172 (W.C.C.A. Apr. 13, 2011) (“the right of a . . . benefits plan to reimbursement is governed by the relevant benefit plan or contract”).  Under these circumstances, whether Minn. Stat. § 176.191, subd. 3, applies is not dispositive.  The employer’s obligation to reimburse the Fund arose out of the Plan.

Whether Minn. Stat. § 176.191, subd. 3, applies is also not dispositive with regard to the second required reimbursement - - that Lakeview is obligated to reimburse the employer for payments made for unreasonable and unnecessary treatment.  Payments made for treatment rendered that is excessive, or unreasonable and unnecessary, must be reimbursed to the payer, in this case the employer, pursuant to Minn. R. 5221.0600, subd. 6.  The compensation judge determined that the surgery was not reasonable and necessary, this determination was affirmed by this court, and no appeal was taken of that decision.  Gamble v. Twin Cities Concrete, No. WC14-5757 (W.C.C.A. Feb. 6, 2015).  As payer of unreasonable and unnecessary treatment, the employer is entitled to reimbursement from the providers pursuant to application of the express requirements of Minn. R. 5221.0600, subp. 6.

Lakeview appears to argue that Chrz should not apply to a situation in which a benefit plan pays for treatment that is ultimately determined to be not reasonable and necessary and where the benefit plan is reimbursed by an employer pursuant to the terms of the plan for all payments made.  In Chrz, the issue was whether all payments made are to be reimbursed to a health insurer under Minn. Stat. § 176.191, subd. 3, or only those payments that would not otherwise be considered excessive.  This court in Chrz reasoned that the entire payment is reimbursable because the policy behind the statute was to place the risk and burden of reimbursement on the workers’ compensation insurer who had denied liability, and the workers’ compensation carrier had a remedy available to it under Minn. R. 5221.0600, subp. 6, should the treatment be considered excessive.  Were a workers’ compensation insurer obligated to reimburse only those payments for reasonable and necessary treatment within the fee schedule, the risk and burden would shift to the health insurer and Minn. R. 5221.0600, subp. 6, would be rendered meaningless.  It is for this reason that the holding in Chrz, that an employer must reimburse the entire payment made to a provider and not just payments for reasonable and necessary treatment within the fee schedule, should also apply in situations such as this where the injury is compensable and reimbursement is made pursuant to the terms of a benefit plan.

Lakeview’s argument that it is not required to reimburse the employer for treatment rendered based upon express written preauthorization by the Fund is not persuasive.  It is not clear on this record why the Fund agreed to pay for the surgery.  Regardless, the employer was obligated to reimburse the Fund under the terms of the Plan because the employee’s injury was compensable.  Because the employer was obligated to reimburse the Fund, the requirement that Lakeview reimburse the employer pursuant to Minn. R. 5221.0600, subp. 6, was triggered.  This rule places the burden of costs associated with excessive treatment on the medical provider.  Furthermore, as a general rule, the payment of benefits does not constitute a waiver of the right to later assert defenses to those benefits.  Minn. Stat. § 176.221, subd. 1; Parker v. Univ. of Minn., 66 W.C.D. 373 (W.C.C.A. 2006); Kingbird v. Anderson Fabrics, 63 W.C.D. 337 (W.C.C.A. 2002); Hoch v. Duluth Clinic, No. WC06-311 (W.C.C.A. Aug. 3, 2007); Enger v. General Sec. Servs., slip op. (W.C.C.A. July 28, 1998).  That the Fund paid for treatment that was later determined to be unreasonable and unnecessary is not a bar to the reimbursement it was owed under the Plan from the employer, nor is it a bar to the reimbursement the employer was owed from the medical providers under Minn. R. 5221.0600, subp. 6.

Finally, Lakeview has asserted that it has a right to full reimbursement of its bill regardless of reasonableness and necessity of the treatment pursuant to the terms of a written guaranty for the payment of elective treatment executed by the employee.^[5]  To the extent Lakeview seeks this court to determine the enforceability of an agreement between a patient and provider for the payment of elective treatment, and where the disputed treatment has been determined to fall under the jurisdiction of the Minnesota Workers’ Compensation Act, the issue is beyond the jurisdiction of this court and will not be addressed.  See Smith v. Integrity Plus, Inc., slip op. (W.C.C.A. Dec. 28, 2000) (jurisdiction is limited to questions arising under the Minnesota Workers’ Compensation Act).

The findings and order of Compensation Judge Gary P. Mesna, served and filed September 21, 2012, are affirmed.