Carrier Prevails in Medical Bill Dispute

In the absence of a reimbursement agreement with the medical provider, workers' compensation carriers in Virginia are required to pay medical providers according to the prevailing community rate as provided by Va. Code Section 65.2-605 and Rule 14 of the Virginia Workers' Comensation Commission Rule 14.  In a dispute, the carrier bears the burden of establishing that the charges do not meet the community standard.  This is a difficult burden that often requires reliance on statistical experts and the existence of accurate and up-to-date rate databases that correspond to the community in question.  A recent decision out of the Virginia Worker's Compensation Commission, Hill v. VDOT-NOVA District Management, JCN 2099265 (Feb. 1, 2013), indicates that such complicated statistical data may no longer be necessary for a carrier to prevail in a provider fee dispute. 

In Hill, the carrier successfully defended a provider's reimbursement claim using the testimony of a doctor from the same area of Northern Virginia who practiced in the same specialty field as the claimant's provider.  In 2008, the claimant's neurosurgeon performed a fusion surgery on the claimant with the assistance of a physician's assistant.  The medical provider's office then billed the physician's assistant's work to the carrier at 95% of the surgeon's rate (more than $20,000).  The carrier paid only a portion of the bill on the grounds that the physician's assistant's charges exceeded the usual, customary, and reasonable rate for the community.  The provider filed a claim for the balance of the bill.

The carrier hired another neurosurgeon from the area to review the disputed charges.  In his deposition, the carrier's neurosurgeon testified that 20% was the upper limit of charges for physician's assistant's based upon his inquiries with the majority of other medical practices in the area.  Noteably, the carrier's neurosurgeon admitted that had no statistical date samples to support his conclusion. The Commission acknowledged that while the prevailing rate typically has been established through expert statistical analysis, "we have never held that this was the only manner in which the prevailing community rate could be ascertained."  The Hill decision shows that a doctor's testimony may be used to successfully defend a medical provider claim where the doctor has significant knowledge regarding the prevailing rate in the community for similiar proceedures and fully explains the basis for that knowledge.

U.S. Supreme Court - A Houseboat is not a Vessel

The Supreme Court recently issued an opinion that may have the effect of permitting more injured workers to fall within the realm of the Longshore and HarborWorkers Compensation Act (the “ Longshore Act”) but excluding them from the Jones Act. In Lozman v. City of RivieraBeach, the Court further addressed the issue of whether or not a particular structure is a “vessel.”

 

The opinion involved a houseboat that had no independent source of electricity, no steering mechanism and had French doors and ordinary windows (as opposed to watertight portholes).  The Court stated “in our view a structure does not fall within the scope of this statutory phrase unless a reasonable observer, looking to the home’s physical characteristics and activities, would consider it designed to a practical degree for carrying people or things over water.”  The Court, therefore, found the home not to be a vessel.

 

The issue in Lozman was whether admiralty jurisdiction was proper. Therefore, the decision may impact whether a worker is covered under the Longshore Act.  If a worker is not a Jones Act “seaman,” he or she is likely protected under the Longshore Act.  If, because of this case, certain workers are not Jones Act seaman because the structures they work on are not “vessels,” the Longshore Act will expand to cover those workers.

 

This case acts to limit what constitutes a vessel, which could take some workers out of Jones Act coverage.  The Court stated that if the structure in question, is used to transport people or things over water, it is a vessel.  The “reasonable observer” test stated in Lozman creates a practical approach to look at borderline cases and does away with the “anything that floats is a vessel” approach taken by some jurisdictions.  At present, the case may only directly affect those workers on house boats or floating restaurants or businesses.  However, it remains to be seen how individual jurisdictions will use the Lozman case’s definition of “vessel” to—perhaps unintentionally—include more workers under the Longshore Act.    

 

By Tim Boykin, Attorney

 

I Would've Offered Light Duty, But I Fired Him . . .

As a result of the 2009 decision by the Virginia Court of Appeals in Shenandoah Motors, Inc. v. Smith, 53 Va. App. 375, 672 S.E.2d 127 (2009), the framework for challenging claims to post-termination partial disability benefits changed significantly. It used to be the case that in order to bar a claim to post-termination partial disability benefits, the employer was required to show the following:

                  (1)        that the employer made a bona fide job offer suitable to the employee’s capacity,

                  (2)        that the employer procured a job offer for the employee, and

                  (3)        that the employee unjustifiably refused to accept the job offer.

The court’s ruling in Shenandoah Motors amends the first requirement to allow an employer to effectively challenge a claim to post-termination partial disability benefits by showing that the employer would have made selective employment available during the post-termination period of the employee’s partial disability but for the employee’s termination for cause from full-duty employment after suffering a compensable injury.

 

In other words, an employer may now bar a claim to post-termination partial disability benefits by establishing constructive refusal of selective employment by the employee—i.e., that the employee’s post-injury amounted to refusal of an offer of selective employment, even in the absence of an actual bona fide offer of selective employment by the employer.

An employer may establish constructive refusal of selective employment by showing that it would have offered the employee suitable selective employment but for the employee’s termination for cause. In Shenandoah Motors, uncontradicted testimony stating that an offer of light-duty employment would have been made had the employee not been previously terminated for cause while working full-duty was sufficient for showing constructive refusal of selective employment. Still, the court noted that when challenging a claim to post-termination partial disability benefits based on an employee’s constructive refusal of selective employment, the employer must persuade the Virginia Workers’ Compensation Commission with a preponderance of the evidence that the employee’s actions amounted to constructive refusal of selective employment, even though the employer never made an actual bona fide offer of selective employment.

 

Employers may preemptively bolster their abilities to challenge claims to post-termination partial disability benefits based on constructive refusal of selective employment by notifying all employees of the availability of light-duty employment in the event of an injury, and of the requirements and protocol for requesting such employment. Employers might additionally remind all injured employees of the availability of light-duty employment. Such policies will likely strengthen employers’ claims, when challenging claims to post-termination partial disability benefits based on an employee’s constructive refusal of selective employment, that light-duty employment would have been made available but for the employee’s termination for cause.