Selective Ins. Co. of Am. v. Bur. of Workers Comp. Fee Review Office, PICS Case No. 14-0244 (Pa. Commw. Feb. 4, 2014) Leavitt, J. (10 pages).

COMMONWEALTH COURT

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INSURANCE LAW

Workers' Compensation • Fee Review • Medical Provider

Selective Ins. Co. of Am. v. Bur. of Workers Comp. Fee Review Office, PICS Case No. 14-0244 (Pa. Commw. Feb. 4, 2014) Leavitt, J. (10 pages).

Where workers' compensation insurer's denial of invoice turned on whether billing entity was a medical provider as defined by the Workers' Compensation Act, the Fee Review Section lacked jurisdiction to consider billing entity's fee review application. Affirmed as modified.

An employee of petitioner Selective Insurance's insured suffered a shoulder injury while on the job, and received physical therapy to treat the work injury. Selective denied invoices from The Physical Therapy Institute for this treatment on the basis that PTI did not actually provide therapy to the employee.

PTI filed fee review applications for review of the "amount of payment." The Bureau of Workers' Compensation Fee Review Section determined the amounts were correct and directed Selective to pay PTI the invoiced amounts plus 10 percent. Selective filed for a de novo hearing, questioning whether PTI was the provider that performed the physical therapy services, and whether PTI was entitled to reimbursement.

At hearing, both parties agreed that the threshold issue was whether the bureau had jurisdiction to determine whether PTI was a medical provider entitled to payment. While Selective wished to bring evidence on the issue, PTI argued that the bureau lacked jurisdiction. The bureau dismissed Selective's petition on the grounds that their jurisdiction only extended to disputes over amount or timeliness of medical bills, and affirmed its decision.

On appeal, Selective argued that the bureau erred in concluding it lacked jurisdiction; or, alternatively, the Bureau erred in dismissing its request for hearing when it should have dismissed PTI's fee review applications.

The court noted that the Workers' Compensation Act obligates employers to reimburse for services rendered by providers, and that a provider who disputes the amount or timeliness of payment may file a fee review application. The court further noted that fee review was designed to have a very narrow scope and was accordingly staffed with personnel with specialized expertise on compensation fee schedules, and therefore the fee review process was not designed to inquire into insurers' reasons for denying liability. Accordingly, the court held that because the issue in the instant case is whether PTI was a "provider" under the act, the issue should be properly determined by a workers' compensation judge before proceeding to fee review, and therefore the bureau lacked jurisdiction to determine PTI's status and therefore Selective's liability to PTI.

The court agreed with Selective's assertion that the bureau erred in denying Selective's request for a de novo hearing because it should have dismissed PTI's fee review applications for lack of jurisdiction, and further erred by ordering Selective to pay the invoices before Selective's liability to PTI had been established by a workers' compensation judge.