STATE OF WISCONSIN
LABOR AND INDUSTRY REVIEW COMMISSION
P O BOX 8126, MADISON, WI 53708-8126 (608/266-9850)

TAMARA S KUEHNE, Applicant

AIR PRODUCTS CHEMICALS, Employer

ACE AMERICAN INSURANCE CO, Insurer

WORKER'S COMPENSATION DECISION
Claim No. 2011-010074


An administrative law judge (ALJ) for the Worker's Compensation Division of the Department of Workforce Development issued a decision in this matter. A timely petition for review was filed.

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 agrees with the decision of the ALJ, and it adopts the findings and order in that decision as its own, except that it makes the following modifications:

1. In the second full paragraph on page 9 of the ALJ's decision, after the words "and additional past and future medical expenses," insert "(including attempts by treatment providers to recover directly from the applicant amounts disallowed by Blue Cross from the expenses documented in Exhibit E)."

2. Delete the ALJ's Interlocutory Order, and substitute the second and third paragraphs of the commission's Interlocutory Order as set out below.

NOW, THEREFORE, the Labor and Industry Review Commission makes this

INTERLOCUTORY ORDER

The findings and order of the administrative law judge, as modified, are affirmed in part and reversed in part.

Within 30 days, the employer and its insurer shall pay all of the following:

1. To the applicant, Tamara S. Kuehne, the sum of One thousand nine hundred seventy-seven dollars and seventy-seven cents ($1,977.77) in disability compensation and Sixty dollars and no cents ($60.00) in out-of-pocket medical expenses.
2. To the applicant's attorney, James A. Meier, the sum of Five hundred one dollars and ninety-nine cents ($501.99) in attorney fees and Thirty dollars and eighteen cents ($30.18) in costs.
3. To Mercy Hospital, Two thousand seven hundred nine dollars and no cents ($2,709.00) in medical treatment expense.
4. To MHS Physician Services, Three thousand nine hundred dollars and sixty-seven cents ($3,900.67) in medical treatment expense.
5. To Blue Cross, Sixty-one thousand eight hundred forty-three dollars and ninety-one cents ($61,843.91) in reimbursement of medical expenses paid.
6. To Air Products Chemicals, Ten thousand seven hundred seventeen dollars and eighty-four cents ($10,717.84) as reimbursement for sickness and accident benefits covered by temporary disability benefits.
7. To Metropolitan Life, Three thousand four hundred fifteen dollars and eighty-nine cents ($3,415.89) as reimbursement for private indemnity benefits.

Jurisdiction is reserved for further findings of fact, conclusions of law, and orders as warranted, consistent with this order.

Dated and mailed
April 30, 2012
kuehnet . wmd : 101 : 9 ND6 5.1

 

BY THE COMMISSION:

/s/ Robert Glaser, Chairperson

/s/ Ann L. Crump, Commissioner

/s/ Laurie R. McCallum, Commissioner

MEMORANDUM OPINION

The primary issues resolved by the ALJ are not in dispute on appeal. The petition for commission review raises only the limited issue of the amount of medical expenses.

The applicant submitted a Medical Treatment Statement on form WKC-3 documenting her medical expenses. Exhibit E. At issue now are two items of medical expense. The first is the expenses from Mercy Hospital which totals $51,086.08. The WKC-3 shows that Blue Cross paid $35,319.85 and also includes this notation "BC dis.: 15,766.25".

Similarly, there is an item for MHS Physicians Services showing total charges of $89,321.60, with $75.00 paid by the applicant, a Blue Cross payment of $26,619.38, the notation: "BC dis.: 58,726.55," and an unpaid balance of $3,900.67.

After examining the bills, the commission concludes the notation "BC dis." refers to disallowance of a portion of the expense by non-industrial insurer Blue Cross. That is, Blue Cross refused to pay the full amount charged and disallowed certain portions of the expense.

At issue is whether the worker's compensation insurer must pay Mercy Hospital and MHS Physicians Services the amounts disallowed by Blue Cross. In Darlene R. Hoefs v. Midway Hotel and Wausau Underwriters, WC Claim No. 1999-029146 (LIRC October 21, 2003), the commission stated:

On appeal, the respondent asserts that because Marshfield Clinic has written off part of its bill, it is admitting that only the bill as adjusted was reasonable in amount. Because an employer is liable only for reasonable medical expenses under Wis. Stat. § 102.42(1), and because the commission has the authority to decide reasonableness of fees under Wis. Stat. § 102.18(1)(bg), it follows from the respondent's argument that the commission should limit the award of medical expense to the Marshfield Clinic to the charges that were not written off. The applicant takes no position on this issue.

The commission agrees that the respondent need not reimburse the Marshfield Clinic for the amounts it has written off. Under Wis. Stat. § 102.42(1), an employer has the duty to supply necessary medical treatment or pay the reasonable expense of such treatment. "Expense" in this context means the cost or price to the applicant of the treatment. The record in this case does not indicate why Marshfield Clinic wrote off a portion of the expenses; there is no indication that Marshfield Clinic regarded the expense as uncollectable, as for example might occur if the respondent had refused payment and the applicant declared bankruptcy. On this record, then, the commission concludes the charges, after deducting the written off amounts, reflect the expense of the actual cost or price in terms of the Marshfield Clinic treatment.

In other words,

absent special circumstances, medical charges reflecting write-offs represent the "reasonable expense" of treatment for which liability accrues under Wis. Stat. § 102.42(1).

Barrera v. Grade A Construction, WC Claim No. 2004-043779 (LIRC July 19, 2007). In general, then, the commission assumes the amounts shown as discounted or written-off are not part of the actual medical expense unless certain special circumstances apply, such as when the provider wrote off the expenses as uncollectible. There is no indication that any amounts were written off as being uncollectible in this case. In fact, the bill from MHS Physician Services specifically shows a zero amount as uncollectible and still shows a charge to the patient of $964.07.

The commission acknowledges that a provider may pursue an injured worker for the amount that was disallowed or adjusted from the bill by a non-industrial insurer such as Blue Cross. See, for example, Richard Pospichal v. Ashley Furniture and Employers Insurance of Wausau, WC Claim No. 2002-022704 (LIRC November 30, 2004). In this case, the commission modified the ALJ's decision to include language to reserve jurisdiction to permit future orders to deal with that possibility.

Finally, the ALJ properly identified a $110.30 expense as unrelated to the medical treatment for the injury, specifically treatment for an office or outpatient visit with Neszta Wahmhoff concerning a respiratory condition on January 30, 2010. As the commission understands the first entry on page 7 of the "Account Charge Activity Detail" documenting the expenses from MHS Physician Services, the amount of $110.30 was billed for that Wahmhoff treatment expense, Blue Cross agreed to pay $95.30, and $15.00 was transferred to the applicant, who paid that amount out-of-pocket. The commission accounts for this unrelated expense by deducting $15.00 from the amount paid out-of-pocket by the applicant, bringing that from $75.00 to $60.00, deducting $95.30 from the amount paid by Blue Cross to MHS Physician Services, reducing that amount to $26,524.08 (and total reimbursement to $61,843.91 as ordered by the ALJ), and leaving the unpaid balance of $3,900.67 as it stands.

NOTE: The commission modified the ALJ's Interlocutory Order to deal with the disallowed medical expenses. The respondent, of course, is entitled to a credit for any payments it has made under the ALJ's interlocutory order; it need not pay any amounts twice.

cc: Attorney James A. Meier
Attorney James G. Budish


[ Search Decisions ] - [ WC Legal Resources ] - [ LIRC Home Page ]


uploaded  2012/10/01