Pennsylvania Workers’ Compensation Client Advisory: Commonwealth Court Requires Employers to File Utilization Review or Petition for Review to Perfect Argument that Fee Review Process is Premature

On December 15, 2022, the Commonwealth Court of Pennsylvania published two opinions concerning fee review procedures: UPMC Benefit Management Services, Inc. d/b/a UPMC Work Partners v. United Pharmacy Services (Bureau of Workers’ Compensation Fee Review Hearing Office), No. 558 C.D. 2021, ____ A.3d ________ (Pa. Cmmw. Ct. Dec. 15, 2022), and SWIF v. Harburg Medical Sales Co., Inc., (Bureau of Workers’ Compensation Fee Review Hearing Office), No. 712 C.D. 2021, ____ A.3d ________ (Pa. Cmmw. Ct. Dec. 15, 2022). The issue in both cases was whether an application for fee review must be dismissed where the employer has denied liability for the particular treatment in question, though the employer had accepted liability for a work-related injury. The providers had tendered medical bills to the insurance carriers, who had denied payment on the basis that same were not causally related to the work injury. Despite these circumstances, the fee review officers ruled on the merits of the fee review applications. The carriers appealed. In a 4-1 published decision, the Commonwealth Court held that a timely fee review application is not premature unless the employer has either filed for utilization review or a petition for medical review challenging the causal relatedness of the treatment.

United Pharmacy and Harburg should be considered when processing contested medical bills. For accepted claims, if the treatment does not appear to be causally related to the work injury, we recommend our clients  continue to deny the bills and document the basis in writing. If the provider fails to challenge the denial, then no further action is necessary. If the provider asks claimant’s counsel to file a Penalty or Review Petition, then the matter should be assigned to counsel to defend the petition.

If the provider files a fee review, then we recommend continued denial of the treatment, again preferably in writing. If the Fee Review Division grants the fee review application, the adjuster should continue to maintain the denial and consider obtaining medical support such as an IME to support the denial.  If after a denial of the treatment by the Fee Review Division, a provider files for a de novo hearing before a hearing officer, then a Petition for Review should be filed challenging causal relatedness. Again, an IME should be considered at that stage to provide medical support for the denial. After filing a Review Petition, the employer can take the position before the hearing officer that under United Pharmacy and Harburg, the hearing officer no longer has jurisdiction and fee review is premature because the employer has denied liability for the treatment at issue.

Contrary to the Commonwealth Court’s discussion in United Pharmacy and Harburg, filing for Utilization Review under these circumstances is unrealistic and is therefore not recommended. The Utilization Review process was never equipped to answer the question of causal relatedness, and therefore there is less control and predictability over the outcome. Providers assigned for Utilization Review do not have the benefit of an examination and are unaccustomed to addressing questions of causal relationship. In addition, the Bureau regulations forbid providing the UR provider doing the review with a copy of an independent medical examination, which prevents the provider from having all the information necessary to make a determination of causal relatedness.

Any questions regarding this case can be addressed to Jim Tinnyo, Esquire, at jtinnyo@tthlaw.com or (717) 237-7121.