Justia.com Opinion Summary: The Commonwealth Court declined to issue a writ of mandamus to Appellant Crozer Chester Medical Center (Crozer) in its attempt to force the Department of Labor and Industry (Department) to reimburse it for medical fees. Claimant William Radel suffered a work-related injury while lifting a bundle of rebar for his employer. The claimant underwent surgery at Crozer, and Crozer sent claimant's records and the bill to claimant's insurance company, Zurich North American Insurance (Zurich). Zurich did not pay, nor did it deny the claim. Crozer then turned to the State for reimbursement. The Department rejected the application as "premature," because Zurich's non-payment made an "outstanding issue of liability/compensability for the alleged injury." Crozer then petitioned the Commonwealth Court to force the Department to pay. The Supreme Court agreed that Crozer's application for reimbursement was premature. The Court found that Crozer did not try to resolve Zurich's nonpayment before petitioning the State or the Commonwealth Court. The Court affirmed the decision of the Department and the lower court, and dismissed Crozer's petition for a writ of mandamus.
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[J-113-2010]
IN THE SUPREME COURT OF PENNSYLVANIA
MIDDLE DISTRICT
CASTILLE, C.J., SAYLOR, EAKIN, BAER, TODD, McCAFFERY, ORIE MELVIN, JJ.
CROZER CHESTER MEDICAL CENTER, :
:
Appellant
:
:
:
v.
:
:
:
DEPARTMENT OF LABOR AND
:
INDUSTRY, BUREAU OF WORKERS'
:
COMPENSATION, HEALTH CARE
:
SERVICES REVIEW DIVISION,
:
:
Appellee
:
No. 59 MAP 2008
Appeal from the Order of the
Commonwealth Court at No. 251 MD
2008, Dated July 28, 2008
955 A.2d 1037 (Pa. Cmwlth. 2008)
ARGUED: December 1, 2009
RE-SUBMITTED: December 21, 2010
OPINION
MR. CHIEF JUSTICE CASTILLE*
DECIDED: May 25, 2011
In this direct appeal, we decide whether the Commonwealth Court should have
compelled appellee Department of Labor and Industry (the “Department”) via a writ of
mandamus to reach the merits of a fee review petition filed by appellant Crozer Chester
Medical Center (“Crozer”) pursuant to Section 306(f.1)(5) of the Workers’ Compensation
Act (“Act”), 77 P.S. § 531(5). The Commonwealth Court declined to issue the writ,
concluding that the Department correctly dismissed as premature Crozer’s application for
fee review. The issue, as phrased by Crozer, is:
Whether the lower court erred in granting the [Department]’s
demurrer even though: (a) the complaint [in mandamus]
averred that, in a notice of compensation payable, [a
*
This case was re-assigned to this author.
claimant]’s workers’ compensation insurer admitted that [the
claimant]’s injury was compensable and that the insurer was
liable therefor; and (b) the [c]omplaint [in mandamus] did not
aver that the insurer disputed liability or compensability.
Crozer’s Brief at 4. For the reasons that follow, we affirm.
On April 28, 2008, Crozer filed with the Commonwealth Court a petition for review in
mandamus,1 seeking to compel the Department to decide the merits of a fee review
application rejected by the Department as premature. According to the mandamus petition,
in December 2005, claimant William Radel suffered a work-related injury while lifting a
bundle of rebar for employer Re-Steel Supply Company, Inc. In January 2006, employer
issued a medical-only notice of compensation payable (“NCP”), voluntarily accepting
liability for an injury described as a hernia. Radel underwent surgery to repair an umbilical
hernia at Crozer in February 2006. On March 20, 2007, Crozer sent records and billed
employer’s insurer, Zurich North American Insurance Company (“Zurich”), for the treatment
it provided Radel. Zurich did not pay the medical care provider’s bill. See Crozer’s Petition
at ¶¶ 5-9 & exh. A (paragraph 9 states: “In violation of 34 Pa. Code § 127.208, within thirtythree (33) days after said submission,[2] Zurich neither paid [Crozer]’s bill nor did it issue a
denial of payment.[3]”) (footnotes added).
1
Crozer’s initial filing is captioned “Mandamus Complaint.” But, pursuant to Rule of
Appellate Procedure 1512, the filing should have been styled a petition for review in
mandamus. Pa.R.A.P. 1512(c) & note. We use the correct designation.
2
The Act provides that the insurer must make payment to the medical care provider
within thirty (30) days of the provider’s submission of bills and records. 77 P.S. § 531(5).
Regulation 127.208 provides that “[f]or purposes of computing the timeliness of payments,
the insurer shall be deemed to have received a bill and report 3 days after mailing by the
provider,” i.e., thirty-three days after submission. 34 Pa. Code § 127.208.
3
Although Section 306(f.1)(1) does not require written notice to the provider
explaining the denial of payment, the Department’s regulations impose that obligation. See
77 P.S. § 531(5); 34 Pa. Code § 127.209(a) (“If payment of a bill is denied entirely, insurers
shall provide a written explanation for the denial.”). No claims are before us regarding the
(continued…)
[J-113-2010] - 2
According to the mandamus petition, Crozer filed an application for fee review on
May 23, 2007. In March 2008, the Department rejected and returned the application as
premature, because it found that there was “an outstanding issue of liability/compensability
for the alleged injury.” The Department also denied Crozer’s request for a de novo
administrative hearing. Consequently, the medical care provider filed its mandamus
petition with the Commonwealth Court. See id. at ¶¶ 4-5, 7-11, 13 & exh. C.
In June 2008, the Department filed preliminary objections requesting dismissal of
Crozer’s petition on several grounds, including that mandamus was not an appropriate
remedy here because the medical care provider failed to establish a clear right to relief, and
the medical care provider sought to compel an exercise of discretion rather than a
ministerial act. Crozer responded with its own preliminary objections, asserting that the
Department was seeking demurrer relief on the basis of documents supplementing the
petition for review, contrary to the prohibition against speaking demurrers. Crozer’s
Objections at 2 (citing Hall v. Goodman Co., 456 A.2d 1029, 1035 (Pa. Super. 1983)).
Specifically, Crozer objected to the Court’s consideration of a letter and two faxes from
Zurich’s claims adjuster and to a February 2006 notice from the Department, which
informed Crozer that Radel’s claim had been denied. Department’s Objections at exh. A.
Following a hearing, the Commonwealth Court sustained Crozer’s preliminary objections
and stated that it would not consider any exhibits attached to the Department’s filing. But,
the Court also sustained the Department’s substantive objections and dismissed Crozer’s
mandamus petition. Crozer filed a direct appeal to this Court. See 42 Pa.C.S. § 723(a).4
(…continued)
legal effect of any failure by Zurich to notify Crozer of its decision in writing, pursuant to
Regulation 127.209(a).
4
This Court, upon dispositional review of the parties’ briefs, see I.O.P. § 3(A)(3),
ordered additional briefing on the issue of whether the NCP constitutes a dispositive
(continued…)
[J-113-2010] - 3
Crozer claims on appeal that its mandamus action was improperly dismissed
because the averments in its petition established the Department’s mandatory duty to issue
(and Crozer’s clear legal right to receive) a determination on the merits of the fee review
application. Crozer argues that Zurich issued a medical-only NCP, which had not been
modified or terminated at the time of the medical treatment and, thus, pursuant to the Act,
the NCP constituted a voluntary and binding admission of liability for Radel’s umbilical
hernia. According to Crozer, because Zurich is precluded from terminating benefits
unilaterally or retroactively, the existence of an “open” NCP at the time of Radel’s treatment
is an “unequivocal admission” that Zurich must pay Crozer. Thus, the medical care
provider disputes the Department’s conclusion that an unresolved issue of liability remained
at the time of the fee review application. In view of the “open” NCP, Crozer offers, the
Department was not faced with making any legal determination of Zurich’s liability as part of
its fee review. Crozer therefore requests that we reverse the Commonwealth Court’s
decision and order the Department to resolve the merits of the fee review application.
The Department responds that Crozer improperly sought mandamus to compel
exercise of the Department’s discretion in a particular manner. Specifically, the Department
argues that Zurich denied liability, but that Crozer nonetheless sought to force the
(…continued)
admission of liability and what effect the decisions in Beissel v. W.C.A.B. (John
Wanamaker, Inc.), 465 A.2d 969 (Pa. 1983), Barna v. W.C.A.B. (Jones & Laughlin Steel
Corp.), 522 A.2d 22 (Pa. 1987), Mahon v. W.C.A.B. (Expert Window Cleaning), 835 A.2d
420 (Pa. Cmwlth. 2003), and Section 406.1(d) of the Act, 77 P.S. 717.1(d), have on the
Department’s obligation to decide Crozer’s fee review application on the merits. The
parties complied. In their supplemental briefs, both parties stated that the issue subject to
supplemental briefing is collateral to their dispute and that the caselaw cited is inapposite.
See Crozer’s Supp. Brief at 4, 6; Department’s Supp. Brief at 2. Upon review, we agree.
Although this may not always be the case, it appears that here the parties are correct in
attempting to refocus the disputed issue before the Court. We note, moreover, that the
supplemental briefs assisted the Court in understanding how the Department’s fee review
process operates.
[J-113-2010] - 4
Department to decide that the “open” NCP estopped Zurich from denying liability. The
Department notes that these decisions are not as simple as Crozer believes. According to
the Department, deciding whether the NCP is “open,” whether Zurich’s denial was proper,
and whether Crozer was entitled to payment under the circumstances, “far exceeds the
jurisdiction and administrative capabilities of the fee review authorities.” Department’s Brief
at 7. The Department further notes that, although ill-equipped to do so, the Department’s
hearing officer would be required to determine the credibility of insurers and providers,
inquire into whether the NCP included the treatment billed by the provider, resolve whether
the NCP was rescinded, accurate, or authentic, and determine issues of estoppel. The
Department maintains that, in view of these inherent practical challenges, the regulatory
prohibition against litigating liability within the context of the fee review process is sensible.
The Department argues that issues of liability, even where an “open” NCP exists, are better
litigated before workers’ compensation judges, pursuant to the Act and relevant regulations.
Crozer, the Department concludes, failed to establish a clear legal right to a determination
on the merits of its fee review application and, therefore, the Commonwealth Court properly
dismissed Crozer’s action.
In dismissing Crozer’s petition for mandamus, the Commonwealth Court explained
that Crozer’s petition (paragraph 11 and exhibit C) indicated that Zurich was disputing
liability for the injury. According to the court, Crozer essentially argued that “when an
insurer’s denial of liability appears to violate the [Act], the Department should be required to
make a determination.” Crozer Chester Med. Ctr. v. Dep’t of Labor & Indus., 955 A.2d
1037, 1042 (Pa. Cmwlth. 2008). Specifically, in the court’s view, Crozer maintained that
Zurich’s denial violated the Act in light of the “open” NCP. The court rejected Crozer’s
mandamus argument, concluding that to grant Crozer relief would entail requiring the
Department to exercise legal judgment and evaluate the credibility of witnesses, the legal
effect of documents and of other evidence. Thus, the panel recognized that Crozer “[was]
[J-113-2010] - 5
not attempting to enforce a right which ha[d] been established beyond peradventure, but
[was] seeking to have [the court] direct the Department to determine the issue of liability in
[Crozer]’s favor.” Id. The Commonwealth Court therefore held that Crozer had failed to
plead a legally cognizable claim in mandamus. Id.
Preliminarily, it is important to recognize that the claim before us involves a request
for mandamus relief. The controlling question is whether the factual averments in Crozer’s
petition for review are legally sufficient to state a cause of action for mandamus in light of
the relevant provisions of the Act and the regulations of the Department. A mandamus
action lies only “to compel official performance of a ministerial act or mandatory duty where
there is a clear legal right in the plaintiff, a corresponding duty in the defendant, and a lack
of any other adequate and appropriate remedy at law. . . . While mandamus will not
ordinarily lie to compel a series of particular acts or conduct or to compel the performance
of a particular discretionary act, it is available to direct that discretion be exercised.”
Delaware River Port Auth. v. Thornburgh, 493 A.2d 1351, 1355-56 (Pa. 1985) (internal
citations omitted). The affected governmental entity may test the legal sufficiency of a
mandamus complaint by filing preliminary objections in the nature of a demurrer. See
Pa.R.C.P. No. 1028(a)(4). A demurrer is properly sustained if it is clear and free from doubt
that the facts pleaded in the complaint are legally insufficient to establish a right to relief.
Werner v. Zazyczny, 681 A.2d 1331, 1335 (Pa. 1996).
For the purpose of determining whether a lower court properly sustained a demurrer,
this Court must regard as true all well-pleaded material facts set forth in the mandamus
petition and all reasonable inferences that may be drawn from those facts. Id. But, this
Court “need not accept as true conclusions of law, unwarranted inferences, allegations, or
expressions of opinion.” Bayada Nurses, Inc. v. Commonwealth, 8 A.3d 866, 884 (Pa.
2010). Our review of the lower court’s decision is de novo and plenary. Mazur v. Trinity
Area Sch. Dist., 961 A.2d 96, 101 (Pa. 2008).
[J-113-2010] - 6
Here, the Commonwealth Court sustained the preliminary objections of the
governmental entity, the Department, holding that Crozer’s petition failed to plead a legally
cognizable claim in mandamus. The court found that the Department acted properly in
dismissing Crozer’s fee review application as premature pursuant to the Department’s
Regulation 127.255(1). In its totality, Regulation 127.255 provides that:
The Bureau will return applications for fee review prematurely
filed by providers when one of the following exists:
(1) The insurer denies liability for the alleged work
injury.[ ]
5
(2) The insurer has filed a request for utilization review
of the treatment under Subchapter C (relating to medical
treatment review).
(3) The 30-day period allowed for payment has not yet
elapsed, as computed under § 127.208 (relating to time for
payment of medical bills).
34 Pa. Code § 127.255 (premature applications for fee review). We review the pertinent
provisions of the Act to determine whether Crozer’s application was indeed premature and
properly dismissed.
Pursuant to Section 306(f.1) of the Act, the employer of a qualified injured employee,
or claimant, “shall” pay for the reasonable surgical and medical services provided by
5
We recognize that the language of Regulation 127.255(1) appears to contain a latent
ambiguity insofar as it refers to the insurer denying “liability for the alleged work injury.”
See 34 Pa. Code § 127.255. Indeed, Section 306(f.1)(5) of the Act, which the regulation
addresses, indicates that it is sufficient if the insurer denies liability for a “particular
treatment,” as explained further infra. See 77 P.S. § 531(5); 77 P.S. § 991(a)(v)
(Department to promulgate regulations “reasonably calculated to . . . explain and enforce
the provisions of th[e] [A]ct”). In this case, the Department is interpreting the Regulation
consistently with the Act, as required, and there is no issue before us regarding the overall
validity of Regulation 127.255(1) in light of the latent ambiguity. See 77 P.S. § 991(a)
(Department to promulgate regulations “consistent with th[e] [A]ct”).
[J-113-2010] - 7
physicians or other health care providers as and when needed. 77 P.S. § 531(1)(i). The
Act shields a claimant with a compensable work injury from liability to a medical care
provider for the cost of treatment, and places the onus on the employer, acting
independently or through its insurer, to make timely payments to medical care providers for
such costs. 77 P.S. § 531(5), (7).6 Additionally, Section 306(f.1)(5) protects the financial
interests of both claimants and medical care providers by mandating payment for any
undisputed treatment in a timely manner. 77 P.S. § 531(5). Indeed, insurers are required
to pay interest on untimely payments to the medical care provider, and may be subject to
penalties to the claimant for unreasonable delays in paying compensation. See 77 P.S. §
991(d) (penalties); 34 Pa. Code § 127.210 (interest on untimely payments); Hough v.
W.C.A.B. (AC&T Companies), 928 A.2d 1173, 1179-81 (Pa. Cmwlth. 2007), appeal denied,
940 A.2d 367 (Pa. 2007) (“Section 306(f.1)(5) . . . does not require that [p]rovider seek fee
review before [c]laimant may proceed on a penalty petition alleging untimely payment of
medical bills”).
The Act also foresees the most likely scenarios giving rise to disputes: (1) between
insurers and claimants over liability, i.e., whether compensation is due for medical care or
for a particular treatment, and (2) between insurers and medical care providers over the
amount billed or the timeliness of payment for a covered treatment.
Notably, where the insurer issues an NCP, the insurer may still contest liability for
medical care or for a particular treatment on several grounds. For example, an insurer may
seek to modify, suspend, or terminate the NCP, including a claimant’s medical benefits, if
the incapacity of a claimant has decreased, or temporarily or finally terminated. 77 P.S. §§
732, 772; see, e.g., Henry v. W.C.A.B. (Keystone Foundry), 816 A.2d 348, 349, 354 (Pa.
6
Because the employer here acted through its insurer, Zurich, we analyze the
relevant provisions as they apply to the insurer.
[J-113-2010] - 8
Cmwlth. 2003).
If the NCP and the insurer’s accompanying liability for medical
compensation has not been modified or terminated, the insurer may nonetheless question
liability for a particular treatment. 77 P.S. § 531(5). A common scenario is one in which the
insurer questions the “reasonableness or necessity” of a treatment offered for an accepted
work-related injury, i.e., whether the treatment is appropriate for the injury. See, e.g., Gallie
v. W.C.A.B. (Fichtel & Sachs Indus.), 859 A.2d 1286, 1288 (Pa. 2004). In that event,
immediate payment is not required, but the insurer must make a timely request for
treatment utilization review. 77 P.S. § 531(5), (6). In other instances, the insurer may also
question liability for a particular treatment because: the billed treatment is not related to the
accepted work-related injury as described by the NCP, the NCP is fraudulent or contains a
material misrepresentation or error, or the issue of liability for medical costs is subject to an
agreement supplementing or replacing the NCP. 77 P.S. § 771 (modification of materially
incorrect NCP); see, e.g., Cinram Mfg., Inc. v. W.C.A.B. (Hill), 975 A.2d 577, 582 (Pa.
2009) (“workers’ compensation judge ‘may’ at any time correct a notice of compensation
payable”); Barna v. WCAB (Jones & Laughlin Steel Corp.), 522 A.2d 22, 24 (Pa. 1987)
(compensation may be terminated if timely investigation reveals that NCP is materially
incorrect); Waugh v. W.C.A.B. (Blue Grass Steel), 737 A.2d 733, 737-38 (Pa. 1999)
(claimant supplied documents containing material misrepresentation regarding residency to
obtain NCP); Gregory v. W.C.A.B. (Narvon Builders), 926 A.2d 564, 565 (Pa. Cmwlth.
2007) (compromise and release agreement replaced NCP). In cases in which liability for a
particular treatment is at issue, the claimant, not the medical provider, must pursue
compensation before a workers’ compensation judge in the regular course. See 77 P.S. §
531(6)(iv) (utilization review); 77 P.S. § 710 (liability for compensation generally).
But, under the Act, if an insurer accepts that compensation is due for a particular
treatment, a medical care provider may file an application for fee review to dispute the
“amount or timeliness” of the payment. 77 P.S. § 531(5); Catholic Health Initiatives v.
[J-113-2010] - 9
Health Family Chiropractic, 720 A.2d 509, 511 (Pa. Cmwlth. 1998) (commencement of fee
review process “presupposes” that liability has been established). For example, an
application for fee review is appropriate if payment to the provider was partial or late. See,
e.g., Enterprise Rent-A-Car v. W.C.A.B. (Clabaugh), 934 A.2d 124, 128 (Pa. Cmwlth.
2007), appeal denied, 948 A.2d 805 (Pa. 2008) (fee review, not utilization review, was
appropriate where provider challenged insurer’s payment of initial estimate rather than of
higher final cost of retrofitting claimant’s home). The application for fee review is due “no
more than thirty (30) days following notification of a disputed treatment or ninety (90) days
following the original billing date of treatment.” 77 P.S. § 531(5). The Department may
reject the application as premature, 34 Pa. Code § 127.255; otherwise, the Department’s
hearing officer is required to decide the merits of a fee review application within thirty (30)
days of its filing. 34 Pa. Code § 127.256. In the Department’s description, which Crozer
does not dispute, the fee review process “is administered by nurses who determine
whether employers’ payments are timely paid or properly calculated under the workers’
compensation fee schedule and medical billing protocols. While these personnel are
experienced and knowledgeable about the workers’ compensation fee schedule, their skills
are markedly distinct from [workers’ compensation judges], who [as attorneys with a
mandatory minimum of five years’ workers’ compensation law experience] are trained to
conduct hearings and make credibility determinations.” Department’s Supp. Brief at 2-3.
It is apparent that the fee review process has a very narrow scope within the broader
legislative and regulatory scheme of compensating claimants for work-related injuries.
Understandably, the General Assembly directed that most disputed compensation issues
be litigated between claimants and insurers before skilled workers’ compensation judges in
the first instance, and reserved few narrow issues to be litigated by the medical care
provider before a fee review hearing officer. The Department’s Regulation 127.255, which
fills procedural gaps within the fee review legislative scheme, enforces this understanding
[J-113-2010] - 10
by explaining that the Department will reject a medical care provider’s application for fee
review if the “insurer denies liability for the alleged work injury” or a request for utilization
review is pending. 34 Pa. Code § 127.255(1), (2); see also 77 P.S. § 991 (Department to
promulgate regulations reasonably calculated to explain and enforce provisions of the Act.).
In its mandamus petition, Crozer pled that Zurich refused to pay its bill for treating
Radel, contrary to the Act’s mandate. According to Crozer, the Act establishes that an
“open” NCP is Zurich’s “unequivocal admission” of liability for Radel’s December 2005
injury. Crozer concludes that, as a result, the Department should have reached the merits
of its fee review application, presumably to order Zurich to pay Crozer’s bill. At the center
of Crozer’s claim is the assumption that the so-called “unequivocal admission” of liability to
Radel absolutely establishes Zurich’s liability to Crozer for the medical costs of the
February 2006 treatment, as well as the settled nature of Crozer’s claim, whose merits the
Department should have reached. We disagree.
Initially, it is apparent from Crozer’s own averments that Zurich was disputing
liability. Paragraph 9 of the mandamus petition describes Zurich’s refusal to pay Crozer for
the February 2006 surgery, which, in light of the Act’s mandate that insurers pay “timely for
any treatment or portion thereof not in dispute,” is essentially a denial of liability for the
treatment.7 This averment, though adverse to Crozer’s legal interest, must be accepted as
true, on par with all other allegations in the petition. See Werner, 681 A.2d at 1335 (“Court
must consider as true all the well-pleaded material facts set forth in appellant’s [pleading]”).
Crozer seeks to overcome Zurich’s denial of liability by claiming that an “open” NCP is
irrebuttable evidence of liability for the cost of the February 2006 surgery. This is a legal
7
As noted supra, Regulation 127.209 required Zurich to provide Crozer with a written
explanation of its denial. 34 Pa. Code § 127.209(a). This notice requirement, however, is
distinct from the question of whether an insurer’s refusal to pay the entire bill effectively
constitutes a denial of liability in the distinct context of the fee review process.
[J-113-2010] - 11
argument, sounding in estoppel, which simply adds another layer to the dispute over
liability.
Even if we were to assume that black letter law deems an “open” NCP to be an
“unequivocal admission” of liability, the inquiry into Crozer’s allegations cannot stop there.
The NCP is an agreement between an employer or an insurer and a claimant regarding
liability for the claimant’s injury. See 77 P.S. § 731 (NCP issued to “employe or his
dependent”). But, liability for an injury is distinct from liability for a particular treatment or its
cost. The NCP, even if “open” and binding with respect to liability for the injury, is not
dispositive as to the medical care provider’s claim for reimbursement for the cost of a
particular treatment. As a result, here, the so-called “open” NCP does not bar Zurich from
disputing liability for payment to Crozer for Radel’s February 2006 surgery. See, e.g.,
Gallie; Waugh; Gregory, supra. Thus, the “open” NCP simply cannot be construed as
compelling a fee review on the merits if an insurer, rightly or wrongly, refused payment.
See Catholic Health Initiatives, 720 A.2d at 511; 34 Pa. Code § 127.255.
Moreover, it is apparent from Crozer’s mandamus petition that the present dispute is
not capable of resolution through the Section 306(f.1)(5) fee review process. Fee review is
a process for medical care providers to dispute “the amount or timeliness” of an insurer’s
payment for a particular treatment, which are relatively simple matters. 77 P.S. § 531(5).
But, Crozer’s petition contains no allegations that the medical fee had not been paid timely
or had not been calculated in accordance with the compensation fee schedule or medical
billing protocols. See 34 Pa. Code §§ 127.208, 127.210 (timeliness provisions); 127.101127.135, 127.151-127.162, 127.205-127.207 (amount calculation provisions). Crozer is
seeking, instead, to establish the broader legal proposition that Zurich’s failure to pay was
unwarranted and that the Department’s fee review personnel were obliged to make that
[J-113-2010] - 12
determination.8 Such a decision is outside the scope of what is designed to be a simple fee
review process.
Ultimately, the Department did not err in construing Zurich’s refusal to pay Crozer’s
bill for Radel’s February 2006 surgery to be a denial of liability for the treatment. Thus, the
Department did not err in concluding that Crozer’s application did not raise either of the two
narrow issues appropriate for fee review. Rather, Crozer sought a legal decision from nonqualified personnel within the Department on whether it was entitled to payment at all in
view of the so-called “open” NCP. This type of decision is properly viewed as the province
of specially qualified workers’ compensation judges, to be rendered within the context of
claimant-insurer litigation. Crozer’s mandamus petition seeking to compel a decision on the
fee review application was properly rejected by the Department pursuant to the Act and
Regulation 127.255(1).
For the foregoing reasons, we hold that Crozer did not have a clear right to a decision of
its fee review application on the merits because: (1) the provider alleged that Zurich disputed
liability by refusing payment; and (2) the provider challenged the propriety of Zurich’s denial
rather than the amount or timeliness of payment for a particular treatment. Thus, the
allegations in Crozer’s petition for review did not state a cause of action in mandamus. The
Department did not err in applying Section 306(f.1)(5) of the Act and Regulation 127.255, and
thereby dismissing as premature the application for fee review filed by appellant Crozer. The
Commonwealth Court’s decision is affirmed. Jurisdiction is relinquished.
8
Zurich accepted liability via the NCP for Radel’s work-related hernia and Crozer
repaired an umbilical hernia. Under these circumstances, Zurich’s reasons for denying
liability are not immediately obvious. The fee review process, however, is not designed to
encompass either an inquiry into the insurer’s reasons for denying liability or an evaluation
of estoppel arguments like Crozer’s. Yet, Crozer sought resolution of both issues in the fee
review context, as a prerequisite to reaching issues of amount or timeliness of payment,
which are within the proper scope of that process.
[J-113-2010] - 13
Messrs. Justice Saylor and Eakin and Madame Justice Orie Melvin join the opinion.
Mr. Justice Baer files a dissenting opinion in which Madame Justice Todd and Mr.
Justice McCaffery join.
[J-113-2010] - 14
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