Title: Christiana Care Health Services v. Palomino

State: delaware

Issuer: Delaware Supreme Court

Document:

IN THE SUPREME COURT OF THE STATE OF DELAWARE 
 
CHRISTIANA CARE HEALTH 
§ No. 56, 2012 
SERVICES,  
 
§  
 
 
 
§ Court Below:  Superior Court of 
 
Appellee-Below/Appellant, 
§ the State of Delaware in and for 
 
 
 
 
§ New Castle County 
v.  
 
 
§  
 
 
 
§ C.A. No. N10A-06-002 
CECIL PALOMINO 
§ (Consolidated) 
 
 
 
§ 
 
Appellant-Below/Appellee; 
§ 
 
 
 
§ 
 
 
 
§ 
TIMBER PRODUCTS, 
§ No. 62, 2012 
 
 
 
§  
 
Appellee-Below/Appellant, 
§ Court Below:  Superior Court of 
 
 
 
§ the State of Delaware in and for 
v.  
 
 
§ New Castle County 
 
 
 
§ 
SALVADOR AVILA-HERNANDEZ 
§ C.A. No. N10A-06-002 
 
 
 
§ (Consolidated) 
 
Appellant-Below/Appellee; 
§ 
 
 
 
§ 
 
 
 
§ 
BERGER BROTHERS, 
§ No. 63, 2012 
 
 
 
§ 
 
Appellee-Below/Appellant, 
§ Court Below:  Superior Court of  
 
 
 
§ the State of Delaware in and for 
v.  
 
 
§ New Castle County 
 
 
 
§  
JULIO MUNOZ  
§ C.A. No. N10A-06-002 
 
 
 
§ (Consolidated) 
 
Appellant-Below/Appellee 
§ 
 
Submitted: February 11, 2013 
Decided:  April 11, 2013 
 
Before STEELE, Chief Justice, HOLLAND, BERGER, JACOBS, and 
RIDGELY, Justices, constituting the Court en Banc.  
2 
 
Upon appeal from the Superior Court.  AFFIRMED. 
Amy M. Taylor, Esquire (argued), Maria P. Newill, Esquire (argued), Heckler & 
Frabizzio, Wilmington, Delaware, for Appellant Christiana Care Health Services.  
Andrew J. Carmine, Esquire, Elzufon Austin Reardon Tarlov & Mondell, 
Wilmington, Delaware, for Appellant Timber Products. 
Luciana M. Gorum, Esquire, Chrissinger & Baumberger, Wilmington, Delaware 
for Appellant Berger Brothers. 
Gary S. Nitsche, Esquire, and Michael B. Galbraith, Esquire (argued), Weik 
Nitsche & Dougherty, Wilmington, Delaware for Appellees Cecil Palomino, 
Salvador Avila-Hernandez, and Julio Munoz.  
Ralph K. Durstein III, Esquire, and Edward K. Black, Esquire, Delaware 
Department of Justice, Wilmington, Delaware, for amicus curiae, Delaware 
Department of Labor. 
 
 
 
 
 
 
 
 
 
 
 
 
 
3 
 
RIDGELY, Justice, for the majority: 
Cecil Palomino, Salvador Avila-Hernandez and Julio Munoz (“Claimants”) 
were each injured in different work-related accidents.  It is not disputed that their 
injuries are compensable under the Worker’s Compensation Act and that payments 
of some worker’s compensation have been made.  After their doctors 
recommended certain treatments, their employers requested determinations of 
whether the treatment plans fell outside of the Health Care Practice (“HCAP”) 
Guidelines through a utilization review (“UR”) authorized by 19 Del. C. 
§ 2322F(j).  The UR panel determined that portions of their treatments were not 
approved for coverage.   The Claimants, through counsel, petitioned the Industrial 
Accident Board (“Board”) for review of the UR determination.  They did so after 
the 45 day time window prescribed by Department of Labor (“DOL”) Regulation 
5.5.1.  The Board dismissed the petitions as untimely.  
Claimants appealed to the Superior Court, which determined that the 45 day 
limit of Regulation 5.5.1 is invalid because it conflicts with 19 Del. C. § 2361.  The 
applicable portion of Section 2361 provides that “[w]here payments of 
compensation have been made in any case under an agreement approved by the 
Board or by an award of the Board, no statute of limitation shall take effect until 
the expiration of 5 years from the time of the making of the last payment for which 
a proper receipt has been filed with the Department.”  Christiana Care Health 
4 
 
Services (“Christiana Care”), Timber Products, and Berger Brothers (collectively, 
“Employers”) have appealed from the Superior Court’s judgment.  
We find no merit to the appeal and affirm. 
Facts and Procedural History 
Salvador Avila–Hernandez was injured in a compensable work-related 
accident resulting in a low back injury while employed by Timber Products.  His 
injuries required him to receive multiple injections and regular physical therapy.  A 
UR panel approved two injections and twelve sessions of physical therapy.  The 
UR panel rejected twenty-eight other sessions of physical therapy, however, 
finding that they were not in compliance with HCAP Guidelines.  Based on the UR 
determination, the employer's insurance carrier paid for twelve therapy sessions 
and two injections but denied payment for the other sessions.  Avila–Hernandez 
filed his petition for review of the UR determination after the 45 day period had 
expired.  The Board granted Timber Products’ motion to dismiss the review as 
untimely. 
Cecil Palomino was injured in a compensable work-related accident while 
employed by Christiana Care.  Two UR determinations rejecting treatment plans 
were issued in his case.  Palomino did not file his petition for review until after the 
45-day window had passed.  The Board granted Christiana Care’s motion to 
dismiss the review as untimely. 
5 
 
Julio Munoz was injured in a compensable work-related accident while 
employed by Berger Brothers.  A UR panel determined that his medical services 
were not in compliance with HCAP Guidelines.  Munoz filed his petition for 
review after the 45 day period had expired.  Berger Brothers’ motion to dismiss the 
review as untimely was granted. 
Claimants appealed the dismissals to the Superior Court and their cases were 
consolidated.  The Superior Court reversed and remanded, concluding that 
Regulation 5.5.1’s imposition of a 45-day limitation on petitions was invalid 
because it is contrary to the five-year statute of limitations mandated by 19 Del. C. 
§ 2361(b).  Employers appealed to this Court. 
During the course of this appeal, we asked the Department of Justice to 
submit an amicus curiae brief on behalf of the Department of Labor on the validity 
of Regulation 5.5.1 in light of 19 Del. C. §2361.  For the reasons explained in this 
Opinion, we affirm the Superior Court judgment. 
Discussion 
When reviewing an appeal from the Board, “the only role of the appellate 
court is to determine whether the decision of the Board is supported by substantial 
evidence and is free from legal error.”1  We review questions of law, such as the 
                                          
 
1 Std. Distrib., Inc. v. Hall, 897 A.2d 155, 157 (Del.2006). 
6 
 
construction of the workers’ compensation statute, de novo.2  “When any 
regulation is the subject of an enforcement action in the Court, the lawfulness of 
such regulation may be reviewed by the Court as a defense in the action.”3  “Upon 
review of regulatory action, the agency action shall be presumed to be valid and 
the complaining party shall have the burden of proving either that the action was 
taken in a substantially unlawful manner and that the complainant suffered 
prejudice thereby, or that the regulation, where required, was adopted without a 
reasonable basis on the record or is otherwise unlawful.”4 
Title 19, section 2361 of the Delaware Code provides in relevant part: 
 (b) Where payments of compensation have been made in any 
case under an agreement approved by the Board or by an award 
of the Board, no statute of limitation shall take effect until the 
expiration of 5 years from the time of the making of the last 
payment for which a proper receipt has been filed with the 
Department.5 
This Court has emphasized that this provision “unambiguously provides that no 
statute of limitation shall take effect until five years from the last payment of 
benefits.”6 
Title 19, section 2322F(j) of the Delaware Code provides for the 
development of a “utilization review program.”7  Significantly, the General 
                                          
 
2 LeVan v. Independence Mall, Inc., 940 A.2d 929, 932 (Del. 2007). 
3 29 Del. C. §10141 (c). 
4 29 Del. C. §10141 (e). 
5 19 Del. C. § 2361 (b).  
6 LeVan, 940 A.2d at 932 (quoting National Union Fire Ins. Co. v. McDougall, 877 A.2d 969, 
975 (Del. 2005) (emphasis in original). 
7 
 
Assembly provided for de novo review of a utilization review decision by the 
Board, but did not prescribe any time limitation by which the petition for review 
must be filed, nor did it otherwise change the broad language of Section 2361.  The 
statute authorizing utilization review provides: 
Utilization review. -- The Health Care Advisory Panel shall 
develop a utilization review program.  The intent is to provide 
reference for employers, insurance carriers, and health care 
providers for evaluation of health care and charges.  The 
intended purpose of utilization review services shall be the 
prompt resolution of issues related to treatment and/or 
compliance with the health care payment system or practice 
guidelines for those claims which have been acknowledged to 
be compensable.  An employer or insurance carrier may engage 
in utilization review to evaluate the quality, reasonableness 
and/or necessity of proposed or provided health care services 
for acknowledged compensable claims.  Any person conducting 
a utilization review program for workers' compensation shall be 
required to contract with the Office of Workers' Compensation 
once every 2 years and certify compliance with Workers' 
Compensation Utilization Management Standards or Health 
Utilization Management Standards of Utilization Review 
Accreditation Council (“URAC”) sufficient to achieve URAC 
accreditation or submit evidence of accreditation by URAC.  If 
a party disagrees with the findings following utilization review, 
a petition may be filed with the Industrial Accident Board for 
de novo review.  Complete rules and regulations relating to 
utilization review shall be approved and recommended by the 
Health Care Advisory Panel.  Thereafter, such rules shall be 
adopted by regulation of the Department of Labor pursuant to 
Chapter 101 of Title 29.  Such regulations shall be adopted and 
effective not later than 1 year after the first meeting of the 
Health Care Advisory Panel.8 
                                                                                                                                        
7 19 Del. C. § 2322F (j).  
8 Id. 
8 
 
Upon the recommendation of the Health Care Advisory Panel, the DOL 
adopted Regulation 5.5.1, which provides in relevant part: 
The decision of the utilization review company shall be 
forwarded by the Department of Labor, by Certified Mail, 
Return Receipt Requested, to the claimant, the claimant’s 
attorney of record, the health care provider in question, and the 
employer or its insurance carrier.  A decision of the utilization 
review company shall be final and conclusive between the 
parties unless within 45 days from the date of receipt of the 
utilization review decision any interested party files a petition 
with the Industrial Accident Board for de novo review.9 
Employers argue that Regulation 5.5.1 does not create a “statute of 
limitations” because it does not foreclose the claimant’s right to recover additional 
workers’ compensation benefits for the injuries at issue.  Employers interpret 
§ 2361(b) as setting the time at which a claimant “will be completely barred from 
ever seeking additional benefits arising out of the work accident.”  The 45-day 
period, by contrast (they argue), forecloses only payment for the specific treatment 
rendered by a specific provider on a specific date.  In other words, because 
Regulation 5.5.1 does not foreclose all claims, but rather only specific worker’s 
compensation claims, the regulation does not operate as a statute of limitations.  
We find no merit to this argument, because it ignores the practical effect of the 
regulation, which is to bar a claim that is not made within 45 days of the UR 
determination.  Indeed, if a claimant’s sole claim for worker’s compensation or 
                                          
 
9 19 Del. Admin. C. § 1341-5.5.1.  
9 
 
only remaining claim were submitted for utilization review outside of the 45 day 
window, the claim would be barred by the Regulation, even if it were otherwise 
within the five-year time limitation of Section 2361. 
Regulation 5.5.1 forecloses not only Board, but also judicial review, of a 
decision to deny specific workers’ compensation benefits. Section 2361 
unequivocally provides, however, that “no statute of limitation shall take effect 
until the expiration of 5 years from the time of the making of the last payment for 
which a proper receipt has been filed with the Department.”  This broad language 
protects a claimant from the preclusive effect of other statutes of limitation enacted 
by the General Assembly.  It necessarily follows that the broad language of the 
current statute also protects a claimant from the preclusive effect of a DOL 
regulation that imposes a shorter time limitation for the Board to review a claim 
under the Worker’s Compensation Act. 
The Employers contend that the process for reviewing a utilization review 
determination is in essence an “appeal.”  Employers argue that the 45 day time 
allowed to appeal is larger than that allowed in many other appeal procedures.  But 
the utilization review panel is neither a court nor an administrative agency.  The 
General Assembly expressly intended that “if a party disagrees with the findings 
following utilization review, a petition may be filed with the Industrial Accident 
10 
 
Board for de novo review.”10  The DOL regulation limits this statutory right.  Even 
if a UR determination somehow qualifies as an appeal, the jurisdiction of the 
Board and any time limitation for de novo review is a matter for the General 
Assembly and not the DOL to decide.11 
Although the General Assembly has authorized the Health Care Advisory 
Board to recommend and require the DOL to adopt regulations for utilization 
review, it did not establish any time bar for a worker’s compensation claim other 
than the 5 year limitation period provided in 19 Del. C. § 2361.  The Department of 
Labor has restricted the right of de novo review the General Assembly has granted 
in a manner that is inconsistent with the mandate of § 2361.  We conclude that the 
Superior Court properly determined that the 45-day limitation of Regulation 5.5.1 
is invalid. 
The dissent finds two problems with our analysis and urges that we have 
overlooked the purpose and function of the statutorily mandated UR process and 
that we have erroneously equated a limitation on the time to appeal from a UR 
decision with the limitation on the time to submit an original claim.  The dissent 
further argues that the invalidation of Regulation 5.5.1 defeats the purpose of the 
UR program.  We disagree.  Instead, we have determined—as we must—that the 
                                          
 
10 19 Del. C. § 2322F (j).  
11 See 19 Del. C. §§ 2301A; 2345 and 2346 (continuing the Industrial Accident Board and 
providing for hearings upon disagreement on the amount of compensation on benefits and 
charges for medical services).   
11 
 
Regulation cannot stand because it is inconsistent with the right of Claimants to 
petition the Board within the express statutory time limitations of 19 Del. C. 
§2361. 
The authorizing statute for the UR program contains no mandate shortening 
the time for a claim to be made for workers compensation benefits, nor does 
§ 2361 provide any exception.   The DOL may adopt regulations regarding 
utilization review, but it only those regulations that are “not inconsistent with the 
laws of this state.”12  Regulation 5.5.1 conflicts directly with 19 Del. C. §2361 and 
therefore impermissibly abridges Claimants’ rights under the statute.     
The dissent argues there is a distinction between a statute of limitations and 
a limit on the time to appeal.  We do not disagree with that distinction, but the 
dissent’s premise that Claimants’ petitions were appeals is incorrect.  An appeal 
involves “[r]esort to a superior (i.e. appellate) court to review the decision of an 
inferior (i.e. trial) court or administrative agency.”13  The UR service provider is 
neither a court nor an administrative agency.  Rather, the UR service provider is a 
contractor.14  The contractor’s only role is to review upon the request of an 
employer or insurance carrier, “the forms, information package and medical 
                                          
 
12 29 Del. C. §8503(7). 
13 Black’s Law Dictionary (5th Ed.). 
14 See 19 Del. C. §2322F(j) provides in part:  “Any person conducting a utilization review 
program for workers’ compensation shall be required to contract with the Office of Workers’ 
Compensation once every 2 years…”   
12 
 
records package by the employer or insurance carrier…to determine if it is in 
compliance with the practice guidelines developed by the Health Care Advisory 
Panel and adopted and implemented by the Department of Labor.”15  The Board 
has the statutory authority to determine whether additional compensation is due 
upon the request of any party after utilization review.  The jurisdiction of the Board 
is invoked by a “petition” like every other Workers’ Compensation Act claim.  
Here, Claimants sought original review by the Board of their claim, not appellate 
review.  The General Assembly has prescribed one time limitation period for 
Claimants’ petitions by 19 Del. C. §2361, to the exclusion of all others.  When 
§2361 and a DOL regulation conflict, the statute must prevail. 
Conclusion 
The judgment of the Superior Court is AFFIRMED. 
 
 
 
 
 
 
 
                                          
 
15 19 Del. Admin. C. §1341–5.4. 
13 
 
BERGER, Justice, dissenting, with STEELE, Chief Justice, joining: 
The majority holds that, because there is a five year statute of limitations for 
workers’ compensation payments, a regulation limiting the time within which a 
party may seek review of an adverse utilization review (UR) decision is invalid.  
The majority reasons that the UR decision may deny payment of the claimant’s last 
claim for workers’ compensation.  Under those circumstances, the regulation 
would bar review of the UR decision after 45 days, thereby depriving the claimant 
of the benefit of the five year statute of limitations.  There are two problems with 
this analysis.  First, it overlooks the purpose and function of the statutorily 
mandated UR process.  Second, it erroneously equates a limitation on the time to 
appeal from a UR decision with the limitation on the time to submit a claim. 
Section 2322 created a Health Care Advisory Panel (HCAP) to:  1) design a 
healthcare payment system; 2) promulgate healthcare practice guidelines; 3) 
develop forms for healthcare providers, and 4) establish rules for the certification 
of healthcare providers.  Section 2322F addresses the time and manner of billing 
and payment.  It instructs the HCAP to develop a UR program.  The stated purpose 
of the UR program is “the prompt resolution of issues related to treatment and/or 
compliance with the health care payment system or practice guidelines for those 
claims which have been acknowledged to be compensable.”16  If a party disagrees 
                                          
 
16 19 Del. C.§ 2322F(j) (Emphasis added.). 
14 
 
with the UR findings, the party may petition the Industrial Accident Board for de 
novo review.  Regulation 5.5.1, adopted pursuant to Section 2322F(j), provides that 
a party seeking Board review must file a petition within 45 days after the UR 
decision. 
The majority’s invalidation of Regulation 5.5.1 defeats the purpose of the 
UR program.  Section 2322 provides a comprehensive set of requirements and 
procedures to standardize treatment options and provide prompt payment to 
healthcare providers.  Yet the majority holds that claimants have five years to seek 
review of an adverse UR decision.  Not only does that contradict any notion of 
what constitutes a “prompt” resolution of a claim, it makes no sense at a practical 
level.  If a claimant is seeking authorization to undergo a surgical procedure, or 
purchase mobility equipment, or enter into a course of physical therapy, the five 
year statute of limitations will have no bearing on the claimant’s rights.  The 
claimant either will go ahead with the treatment despite an adverse UR decision, 
appeal that decision, or find other acceptable treatment.  After several years, the 
UR decision will be of little consequence.  By then, the claimant will have 
obtained other services and mooted the issue.  If the claimant still needs treatment, 
the claimant will be free to file a new petition and explain how his or her then 
current condition justifies the previously denied treatment.  In sum, the 45 day 
appeal deadline does not conflict with the five year statute of limitations because 
15 
 
there is no reasonable possibility that the claimant’s condition or the disputed 
treatment will remain static for five years.     
Moreover, there is a difference between a statute of limitations and a limit 
on the time to appeal from a regulatory body’s decision.  The Workers’ 
Compensation Act provides, for example, that Board awards become final if not 
appealed to the Superior Court within 30 days.17  No one would argue that the two 
statutes are in conflict, or that the Act’s five year statute of limitations extends that 
30 day appeal period.  That is because the statute of limitations bars claims for 
compensation, whereas the appeal period only bars review of a decision about a 
claim.  The majority posits that if an adverse UR decision is the last claim for a 
particular claimant, the 45 day appeal period would limit the claimant’s right to 
wait five years to submit a claim.  But the claim has been submitted when it is 
brought before the UR panel.  The five year statute of limitations applies to the 
timeliness of the UR petition, not the timeliness of any appeal. 
Finally, the majority states that, if the Board’s review of a UR decision is an 
appeal, the General Assembly should specify the time for appeal by statute.  
Instead, the General Assembly delegated that task to the HCAP.  The legislature 
created the HCAP because, “issues related to health care in workers’ compensation 
require the expertise of the medical community and other health care professionals 
                                          
 
17 19 Del. C. § 2349. 
16 
 
for resolution.”18  The HCAP, with its “diversity of perspectives,”19 was instructed 
to develop “complete rules and regulations relating to utilization review . . . .”20  
There is no reason why those rules could not lawfully include a 45 day time for 
appeal. 
We dissent and would reverse the Superior Court decision. 
 
 
                                          
 
18 19 Del. C. § 2322A(a). 
19 Ibid. 
20 19 Del. C. § 2322F(j).