TRUDY STUMBORG, Applicant
CITY OF WAUSAU, Employer
WAUSAU UNDERWRITERS
INSURANCE CO, Insurer
In April 2007, the applicant filed a hearing application seeking the penalty under Wis. Stat. § 102.18(1)(bp) and compensation for medical expenses. Administrative Law Judge (ALJ) Cathy Lake of the Worker's Compensation Division of the Department of Workforce Development heard the matter on October 3, 2007.
Prior to the hearing, the employer and its insurer (collectively, the respondent) conceded jurisdictional facts, the occurrence of a compensable injury on January 10, 2005, and an average weekly wage at the time of the injury of $589.20. At issue were the claims for medical expense and the penalty under Wis. Stat. § 102.18(1)(bp).
On December 28, 2007, the ALJ issued her decision. The applicant filed a timely petition for review.
The commission has considered the petition and the positions of the parties, and it has reviewed the evidence submitted to the ALJ. Based on its review, the commission makes the following:
The applicant worked for eight years a janitor cleaning the employer's buses. She claimed a shoulder injury from occupational exposure or disease with a January 17, 2005 date of injury. The respondent denied the claim based on two reports from its medical examiner, Stephen Barron, M.D. (dated April 13, 2005 and November 17, 2005), which opined (1) the applicant's work exposure was not of sufficient duration, frequency and magnitude to be a material causative factor in the onset or progression of her shoulder condition, and (2) the applicant had reached maximum medical improvement with no permanent partial disability or restrictions as of May 13, 2005 based on the doctor's reexamination of her on November 11, 2005.
The disability claim was heard by ALJ Larry Steven Schifano on June 21, 2006, with the record being left open to allow the applicant to submit an updated Medical Treatment Statement on form WKC-3 documenting her medical expenses. Meanwhile, on August 1, 2006, Dr. Barron wrote another opinion, this one stating that the applicant would have reached maximum medical improvement by the date of hearing, June 21, 2006, if she did not have surgery, which he opined was not necessary anyway.(1) The respondent did not submit this third report from Dr. Barron to ALJ Schifano. It asserts on appeal that it did not provide the report to ALJ Schifano because it felt ALJ Schifano held the record open only to get an updated Medical Treatment Statement from the applicant.
ALJ Schifano, having never received the updated Medical Treatment Statement on form WKC-3 from the applicant, closed the record on October 31, 2006. By order dated November 8, 2006, ALJ Schifano found for the applicant, crediting her treating doctor, Dr. Strick, and rejecting the April 13, 2005 and November 17, 2005 opinions of Dr. Barron. ALJ Schifano explained that he believed the applicant's job required vigorous right shoulder use; that Dr. Barron had opined there were no objective abnormalities in the applicant's right shoulder, when in fact the MRI showed arthritis and tendinopathy; that if the shoulder problem were really simply due to aging and not work-related as Dr. Barron suggested, it would reasonably be expected to be bilateral not right-shoulder-only; and that the facts indicated that the applicant was a diligent worker not motivated by secondary gain.
Accordingly, ALJ Schifano ordered the payment of temporary total disability from the January 17, 2005 date of injury to the June 21, 2006 date of hearing. ALJ Schifano did not order payment of medical expense, absent a Medical Treatment Statement on form WKC-3, but retained jurisdiction presuming the parties would be able to reach agreement now that causation had been decided. He also left his order interlocutory on additional or continuing temporary total disability and medical expenses "because [the applicant] remain[ed] in a healing period."
On November 14, 2006, the respondent submitted Dr. Barron's third report, the one dated August 1, 2006, to the department.
On November 27, 2006, the respondent paid temporary total disability for the period awarded by ALJ Schifano (from January 17, 2005 to June 26, 2006), in the amount of $23,306.14. See WKC-13-E, boxes 13, 14, and 19.
On December 8, 2006, 30 days after ALJ Schifano's order, the insurer informed the applicant's attorney that it would pay certain medical expenses incurred in 2005 and early 2006. Exhibit C. The insurer paid the medical expenses made on December 13, 2006.(2) The respondent did not file for commission review of ALJ Schifano's findings and order.
Thereafter, in early April 2007, the insurer learned that the applicant was having further problems and wanted to undergo another MRI. Indeed, the applicant underwent the MRI later that month. The medical bills documented at exhibit I also show treatment in November 2006 and February 2007. The insurer refused to pay these bills based on Dr. Barron's August 1, 2006 report. Exhibit E. At the hearing, Donna Brodjieski, the worker's compensation insurer's case manager, explained that it denied compensation for any additional claims (apparently both for medical expenses and temporary disability) arising after August 1, 2006 based on Dr. Barron's report of that date. The applicant then filed an application for hearing dated April 12, 2007 which sought payment of medical expenses denied and also sought payment of the bad faith penalty under Wis. Stat. § 102.18(1)(bp).
On June 27, 2007, almost three months after the applicant raised the issue of the MRI expense, the worker's compensation insurer arranged for another medical examination of the applicant. This examination, by Sridhar V. Vasudevan, M.D., followed the applicant's repeated inquiry about the payment of the medical bills. See for example, exhibits A and D. The worker's compensation insurer informed the applicant about the medical examination with Dr. Vasudevan on August 8, 2007. Exhibit G. Dr. Vasudevan examined the applicant on August 24, 2007, and issued his report on September 4, 2007.
Ms. Brodjieski testified that, based on Dr. Vasudevan's report, the worker's compensation insurer decided to pay the additional temporary total disability and medical expenses. On September 28, 2007, or just before the bad faith hearing before ALJ Lake, the respondent evidently paid the temporary total disability accruing since June 21, 2006 (the date of the hearing before ALJ Schifano).(3) It appears the disputed medical expenses may have been paid that same day.
ALJ Lake heard the bad faith matter on October 3, 2007. Prior to hearing, the applicant amended her complaint to claim bad faith on the delayed payment of the temporary total disability accruing after the first hearing before ALJ Schifano. On the record, but before taking testimony, the ALJ identified the parameters of the claim as follows:
...the applicant is seeking bad faith benefits or the bad faith penalty to be assessed against Wausau based upon the late payment of temporary total disability in the amount of $23,306.13 as well as medical expenses which were not paid in the amount of $1,324. Altogether, if you looked at 200 percent of this benefit or this penalty -- ... this would max out at the $30,000 amount pursuant to most recent statutory changes. Therefore, the parameter of the claim at this time would be $30,000.
Transcript, page 6. It does not appear the respondent objected to the issue as framed.
ALJ Lake issued her decision on December 28, 2007. She found the employer's witness--case manager Brodjieski who testified about how the claim was handled--to be apathetic, disingenuous, and completely lacking in credibility. ALJ Lake found that Dr. Barron's August 1, 2006 report merely reiterated the conclusions stated in his first two reports, conclusions that ALJ Schifano later rejected. She also found that Dr. Barron's August 1, 2006 report thus lacked credibility and was an inappropriate basis for denying the "continuing claim for benefits."
ALJ Lake thus concluded that the worker's compensation insurer committed bad faith when it denied the applicant's "request for payment of continuing medical expenses." ALJ Lake further concluded that the maximum penalty was warranted, which she set at $2,648 or 200% of the $1,324 medical expenses at issue.
On appeal, the applicant also seeks imposition of the bad faith penalty on the delayed payment temporary total disability benefits--that is, the temporary total disability benefits that accrued after the June 2006 hearing before ALJ Schifano but which were not paid until September 27, 2007. In response, the respondent argues that Dr. Barron's August 1, 2006 report justified the denial of the medical treatment expense, and implies that ALJ Lake's award was based on medical expenses that the worker's compensation insurer had paid back in December 2006.
The commission agrees with ALJ Lake that the worker's compensation insurer acted in bad faith with respect to the medical expenses, and that the maximum penalty of 200 percent is warranted. The worker's compensation insurer could not rely in good faith on Dr. Barron's August 1, 2006 opinion, at least not after ALJ Schifano issued his November 2006 decision that had rejected Dr. Barron's prior, substantially identical opinions and that had specifically found that the applicant remained in a healing period. Even if Dr. Barron's report provided some short-term shred of support for denying the payment of the expenses, the worker's compensation insurer still should have acted more quickly if it intended to deny the ongoing medical expenses following ALJ Schifano's November 2006 decision, instead of waiting until late June 2007 before arranging for another medical examination.
The commission is also satisfied that ALJ Lake's award was based on the medical expenses that went unpaid until September 2007, not the earlier expenses the respondent had paid back in December 2006 after ALJ Schifano's order. Exhibit I from the hearing before ALJ Lake indicates that Liberty Mutual paid Sports and Spine Center $630 on December 19, 2006 toward a bill of $1,260, leaving $630 outstanding. The remaining $694 in medical expenses claimed in exhibit I are all for treatment after December 13, 2006 and do not appear to be duplicative of those listed as paid in Ms. Brodjieski's December 8, 2006 letter at exhibit C. Indeed, respondent's witness Brodjieski testified about "continuing medical bills," further supporting the conclusion that the bills documented in exhibit I pertain to treatment incurred after ALJ Schifano's first hearing, not the earlier expenses paid in December 2006. In sum, the commission finds that the worker's compensation insurer is thus liable to the applicant for compensation in the amount of $2,648 under Wis. Stat. § 102.18(1)(bp).
However, ALJ Lake's findings and order do not resolve the claim for a bad faith penalty with respect to the temporary total disability payments accruing after June 21, 2006 which were not paid until late September 2007. Nor does this order. Rather, that aspect of the claim is remanded to the department for further appropriate action, including a decision and further hearing if necessary.
The record further establishes that the applicant has incurred reasonable and necessary medical expenses to cure and relieve the effects of her work injury, including those documented in exhibit I as follows: from Sport and Spine Center, $1,260, of which $630 remains outstanding; from Radiology Merrill, S.C., $406, all of which is outstanding; from UW Health Physicians, $337, of which $202 remains outstanding; and from Bone & Joint Clinic, S.C., $463.20, of which $86 remains outstanding. The employer and its insurer are liable for the payment of the outstanding amounts, assuming they have not been paid.(4)
Because the applicant may have further claims for treatment expenses, this order shall be left interlocutory.
NOW, THEREFORE, the Labor and Industry Review Commission makes this
The findings and order of the administrative law judge are modified to conform to the foregoing and, as modified, are affirmed.
Within thirty days, the worker's compensation insurer, Wausau Underwriters Insurance Company, shall pay all of the following:
1. To the applicant, Trudy Stumborg, Two thousand, one hundred eighteen dollars and forty cents ($2,118.40) in compensation under Wis. Stat. § 102.18(1)(bp).
2. To the applicant's attorney, Five hundred twenty-nine dollars and sixty cents ($529.60) in fees.
Within thirty days, the employer, City of Wausau, and its insurer, Wausau Underwriters Insurance Company, shall pay the following treatment expenses (assuming they have not been paid):
1. To Sport and Spine Center, Six hundred thirty dollars and no cents ($630).
2. To Radiology Merrill, S.C., Four hundred six dollars and no cents ($406).
3. To UW Health Physicians, Two hundred two dollars and no cents ($202.00).
4. To Bone & Joint Clinic, S.C., Eighty-six dollars and no cents ($86.00).
This matter is also remanded to the department for further appropriate action on the applicant's claim for the bad faith penalty with respect to the temporary total disability benefits accruing after June 21, 2006, consistent with this decision.
Jurisdiction is also reserved for findings, orders and awards on further claims as warranted.
Dated and mailed August 28, 2008
sturmbo . wrr : 101 : 8 ND ? 7.21
/s/ James T. Flynn, Chairperson
Robert Glaser, Commissioner
/s/ Ann L. Crump, Commissioner
cc:
Attorney James Kurth
Attorney Jessica Almazar
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