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

SHELLEY HUCK-FRANK, Applicant

DAIRY QUEEN, Employer

AMERICAN FAMILY MUTUAL INSURANCE COMPANY, Insurer

WORKER'S COMPENSATION DECISION
Claim No. M199701386

On December 3, 1997, Richard D. Smith, an administrative law judge (ALJ) for the Division of Worker's Compensation in the Department of Workforce Development (the department), issued a default order pursuant to Wis. Admin. Code § 80.73(3)(c). ALJ Smith's order required the insurer to pay Daniel C. Strong $1,318 in medical expenses within 30 days. The employer and insurer (collectively, the respondent) have petitioned for relief from the ALJ's order under Wis. Stat. § 102.18(4)(c). Specifically, the respondent asks the commission to exercise the discretion conferred upon it under Wis. Stat. § 102.18(4)(c) and set aside ALJ Smith's order and remand the matter for adjudication of the medical expense on its merits under the health care cost dispute resolution procedure established by state statute and administrative rule.

In support of its petition, the respondent provided an affidavit with attached documents. Assuming for the purposes of this decision that the averments in the affidavit submitted by the respondent are correct, the facts in this case may be stated as follows:

The applicant claimed a work injury by report dated June 5, 1996, which listed the applicant's treating chiropractor, Dr. Strong. On June 24, 1996, the insurer wrote to Dr. Strong and requested his treatment notes. Dr. Strong did not send the notes, but instead sent the insurer a bill on July 31, 1996. Fifty-four days later, on September 23, 1996, the insurer wrote to the department and requested an extension of the time it had to respond to Dr. Strong's bill. The department did not respond to this request.

On October 16, 1996, the insurer again wrote to Dr. Strong and requested additional information. One week later, on October 23, 1996, Dr. Strong responded by providing his office notes. The insurer then had a review of the treatment done by Gary A. Fischer, D.C., who determined that some of the treatment expenses were not necessary. On December 16, 1996 (or 135 days after Dr. Strong submitted the bill, but only 53 days after Dr. Strong provided his office notes), the insurer formally notified Dr. Strong and injured worker Huck-Frank that it was disputing the claim under the alternative dispute resolution procedure based on Dr. Fischer's report.

Nearly nine months later, on September 2, 1997, Dr. Strong sent a letter to the insurer asking for a copy of Dr. Fischer's report. Shortly thereafter, on September 5, 1997, Dr. Strong also filed a "Necessity of Treatment Dispute Resolution Request" form with the department. In his form, Dr. Strong stated he had submitted his bills on July 31, 1996, and had received notice more than 60 days thereafter that the treatment was in dispute. The form concludes by requesting a default order in the amount of the disputed bill.

On September 8, 1997, the insurer wrote to the WC Division, challenging Dr. Strong's request for a default order. As a defense against the claim it disputed the bill more than 60 days after receipt, the insurer pointed to its request for an extension of time to respond to the bill submitted to the department on September 23, 1996.

On September 9, 1997, Dr. Strong submitted a response to Dr. Fischer's evaluation to the insurer. Basically, Dr. Strong explained why he felt the treatment he rendered was in fact necessary. This response came after Dr. Strong filed his Necessity of Treatment Request/Request for Default Order, not thirty days before.

Next, on September 12, 1997, the department sent the insurer a form letter noting Dr. Strong's request for default order and demanding an explanation about why the insurer did not act within the 60-day period. The department's notice stated that if it did not receive a response within 20 days, it would issue a default order. According to the affidavit of the insurer's claims adjuster, the insurer did not respond to the department's request for information because it had just recently sent the September 8, 1997 letter opposing the request for default order.

In October 1997, the insurer had Dr. Fischer reconsider the treatment expenses in light of Dr. Strong's September 9, 1997 response. Dr. Fischer did not change his opinion. The insurer thus notified the applicant and Dr. Strong of this on October 30, 1997, which seems to be outside the 30-day deadline for such a formal response under the administrative code.

Finally, on December 3, 1997, ALJ Richard Smith issued his default order reciting that the insurer failed to answer the department's September 12, 1997 Notice demanding an explanation regarding the disputed bill. According to the affidavit of the insurer's adjuster, she then pointed out the insurer's September 8, 1997 letter providing such an explanation to someone at the department. The adjuster stated that she was told the matter was being reviewed internally and that the adjuster should hold off on an appeal. Later, department personnel informed the insurer it would not change ALJ Smith's order.

The insurer's adjuster avers that she relied on the department's prior representations that ALJ Smith's order was under review, and so did not seek judicial review. Instead, it asks LIRC to review ALJ Smith's default order under Wis. Stat. § 102.18(4)(c) which permits the department to set aside (and then affirm, reverse, modify or remand) any order of the department within one year thereof on grounds of mistake or newly discovered evidence. In essence, the insurer argues that Wis. Stat. § 102.18(4)(c) permits the commission to consider dispute resolution claims to prevent the miscarriage of justice, despite the fact the commission is excluded from the normal administrative review process under Wis. Stat. § 102.16 (2m)(e).

The commission cannot agree. ALJ Smith's order here was issued under the color of Wis. Stat. § 102.16(2m). The commission lacks the authority to review his order under Wis. Stat. § 102.16(2m). The commission declines to evade the evident legislative intent it not review such orders stated in the later and more specific Wis. Stat. § 102.16(2m)(e), by purporting to act under the earlier and more general Wis. Stat. § 102.18(4)(c). Therefore, the respondent's petition must be dismissed.

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

ORDER

The petition for review is dismissed.

Dated and mailed: September 29, 1998
huckfr.wpr : 101 : 6 ND § 5.47

/s/ David B. Falstad, Chairman

/s/ Pamela I. Anderson, Commissioner

/s/ James A. Rutkowski, Commissioner

MEMORANDUM OPINION

In its petition, the respondent refers to a situation posed in Normington v. Karajahl Inn, WC claim no. M9700588. That case also involved an allegation that the department inappropriately issued a default order under Wis. Admin. Code § 80.73(3)(c) based on the inaccurate conclusion that the affected insurer (Capital Indemnity Corp.) had failed to respond to department correspondence. Normington, however, involved the added fact that Mr. Normington, the injured worker, had apparently never claimed a work injury. Instead, the medical provider (Meriter) pursued the claim against Capital Indemnity itself because the seizure for which Mr. Normington treated at Meriter occurred at work. Thus, Capital Indemnity did not dispute the necessity of the bill per se, but rather whether it could at all be related to any work injury.

Because Mr. Normington apparently did not claim a work injury, an argument could be made that the department had no authority to invoke the alternative dispute resolution process in Normington. (1) Hence, the default order in Normington could be viewed as simply a generic default order awarding compensation subject to commission review, rather than an order precluding commission review under Wis. Stat. § 102.16 (2m).

In short, Normington presented different facts than are presented here. Thus, while the commission reserved jurisdiction pending resolution of a contemporaneous circuit court appeal in Normington, it dismisses the petition outright in this case for lack of jurisdiction.

cc: ATTORNEY RONALD S APLIN
COYNE NEISS SCHULTZ BECKER & BAUER SC

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Footnotes:

(1)( Back ) Wis. Stat. § 102.16(2m)(a) recites that the process is limited to cases when an employe claims benefits under Wis. Stat. ch. 102.