Case Name: GARCIA v. McCORD GASKET CORPORATION
Court: Michigan Court of Appeals
Jurisdiction: Michigan
Decision Date: 1993-10-04
Citations: 201 Mich. App. 697
Docket Number: Docket No. 145091
Parties: GARCIA v McCORD GASKET CORPORATION
Judges: Before: Taylor, P.J., and Shepherd and Marilyn Kelly, JJ.
Reporter: Michigan appeals reports; cases decided in the Michigan Court of Appeals.
Volume: 201
Pages: 697–716

Head Matter:
GARCIA v McCORD GASKET CORPORATION
Docket No. 145091.
Submitted November 17, 1992, at Lansing.
Decided October 4, 1993, at 9:50 a.m.
Leave to appeal sought.
Plaintiff, Mary Garcia, was awarded workers’ compensation benefits from defendants, McCord Gasket Corporation and its insurer, Union Fire Insurance Company, when a magistrate found her to be totally disabled. The order provided that the benefits were to be paid until further order of the bureau and that the defendants "shall be responsible for medical expenses pursuant to [MCL 418.315; MSA 17.237(315)] as follows: Any and all reasonable and necessary medical expenses related to plaintiff’s back et sequelae.” The defendants filed an application for review of the claim by the Workers’ Compensation Appellate Commission, and the plaintiff filed a cross appeal. Numerous disputes relating to the reasonableness and necessity of various medical treatments followed. The defendants filed a petition to stop benefits and an application for mediation or a hearing. The plaintiff filed a motion to dismiss the appeal of the defendants, alleging that they had refused and denied payment of medical benefits required by the terms of the award of the magistrate and that such refusal was contrary to the provisions of MCL 418.862; MSA 17.237(862). The defendants responded that they had paid for reasonable and necessary medical benefits but had denied payment of requests for medical benefits that were not reasonable or necessary. The commission denied the plaintiff’s motion to dismiss on the basis that the defendants erroneously may have believed that the notice of dispute filed after the magistrate’s decision relieved them of their obligation under MCL 418.862(2); MSA 17.237(862X2). The commission gave the defendants thirty days within which to provide an affirmation of the bills that had been received, the date the medical services were provided, and a showing that the bills had been paid pursuant to the magistrate’s order awarding reasonable and necessary medical expenses related to plaintiff’s back. Failure to provide timely compliance with MCL 418.862(2); MSA 17.237(862X2) would subject defendants’ appeal to dismissal. The defendants filed a motion to remand and consolidate the proceedings or hold them in abeyance, noting that a hearing regarding their objections to the reasonableness and necessity of the medical expenses was scheduled to occur in less than two weeks. The commission denied the defendants’ motion and granted the plaintiff’s motion to dismiss. The defendants appealed by leave granted.
References
Am Jur 2d, Workers’ Compensation §§ 686, 687.
See ALR Index under Workers’ Compensation.
The Court of Appeals held:
The Workers’ Compensation Appellate Commission has the implied authority to dismiss appeals for noncompliance with MCL 418.862(2); MSA 17.237(862)(2). The defendants’ filing of a claim for review did not operate as a stay with regard to their obligation to provide the medical benefits required by the terms of the magistrate’s award. The defendants should have paid the disputed bills, or the maximum amount allowed under the Workers’ Compensation Health Care Services Rules, 1989 AACS, R 418.1901 et seq., if that amount was less, and then proceeded with an expedited hearing as provided in R 418.1904(3) and (6).
Affirmed.
Taylor, P.J., dissenting, stated that for dismissal to be appropriate, there must be prerequisite noncompliance with the requirements of MCL 418.862(2); MSA 17.237(862X2). The magistrate’s order in this case is not sufficiently clear to make apparent what medical expenses are required to be paid pursuant to the requirements of § 862(2). The decision of the appellate commission should be reversed and the matter remanded to the commission for determination of the appeal on the merits, or to permit further remand to the magistrate for clarification of the order, for joinder with the defendants’ timely demanded hearing under MCL 418.847; MSA 17.237(847) concerning the propriety of the challenged health care services, for consolidation with any appeal from the magistrate’s decision following that hearing, or for decision in light of any unappealed findings made at such hearing.
Workers’ Compensation — Appellate Commission — Claims for Review — Medical Benefits.
The Workers’ Compensation Appellate Commission may dismiss an employer’s appeal from a magistrate’s award of medical benefits where the employer has filed a claim for review regarding the award and has paid some of the benefits, but has disputed and not paid others; the filing of a claim for review does not operate as a stay with regard to the obligation to provide the medical benefits required by the terms of the award (MCL 418.862[2]; MSA 17.237[862][2]).
Richard B. Jenks (Daryl Royal, of Counsel), for the plaintiff.
Evans, Pletkovic, Hays & Rhodes, P.C. (by John J. Hays), for the defendants.
Before: Taylor, P.J., and Shepherd and Marilyn Kelly, JJ.

Opinion:
Shepherd, J.
The plaintiffs employer, McCord Gasket Corporation, and its insurance carrier, National Union Fire Insurance Company, appeal by leave granted from an August 30, 1991, order of the Workers' Compensation Appellate Commission, which, in a divided decision, granted plaintiffs renewed motion to dismiss appellants' appeal "for failure to comply with MCL 418.862(2) [MSA 17.237(862)(2)] and the June 20, 1991 order of this Commission." That order also denied appellants' motion for remand and consolidation, or to hold proceedings in abeyance.
At issue is whether the appellate commission can dismiss an appeal for failure to provide medical benefits pursuant to MCL 418.862(2); MSA 17.237(862)(2), as amended effective July 30, 1985, where the appellants have answered and shown payment of some bills during the appeal period, but have disputed others. It was the appellate commission's position that failure to provide timely compliance with § 862(2), even though a notice of dispute had been filed, subjected appellants' appeal to dismissal.
In a corrected decision mailed on January 25, 1990, the magistrate found plaintiff totally disabled and entitled to workers' compensation benefits until further order of the bureau. It was fur ther ordered that the appellants "shall be responsible for medical expenses pursuant to [MCL 418.315; MSA 17.237(315)] as follows: Any and all reasonable and necessary medical expenses related to plaintiffs back et sequelae."
On February 9, 1990, an application for review of the claim was filed by defendant employer and its carrier. Later, a cross appeal was filed by plaintiff.
Numerous disputes relating to the reasonableness and necessity of various medical treatments followed. On January 9, 1991, appellants filed a petition to stop benefits and an application for mediation or hearing (Form C). The petition stated a March 18, 1987, date of injury.
On February 6, 1991, plaintiff filed a motion to dismiss the appellants' appeal, alleging that appellants had refused and denied payment of medical benefits required by the terms of the award of the magistrate and contrary to the provisions of § 862. The motion conceded that appellants had made their seventy percent payments as required by MCL 418.862(1); MSA 17.237(862)0).
On February 26, 1991, appellants filed their answer to the motion to dismiss their appeal. In it they asked to have the motion denied, contending that they had considered
all requests for payment of medical benefits and have paid those which were reasonable and necessary in accordance with Magistrate Godfrey's decision and have denied payment on other requests which are not reasonable or necessary in accordance with the Act. Magistrate Godfrey gave no guidance in his decision as to which medical providers and care and treatment was necessary or which amount was reasonable. Defendants-appellants have consulted with the State of Michigan Workers' Compensation Health Care Service Rules where applicable as well as independent medical evaluations and opinions as to the necessity of ongoing medical treatment.
Later, appellants filed a second application for mediation or hearing that specifically objected to any further treatment by Dr. Velez-Ruiz.
On June 20, 1991, the appellate commission issued its order denying plaintiffs initial motion to dismiss appellants' appeal, and stated that it was "concerned that defendants may erroneously believe that the Notice of Dispute filed subsequent to the magistrate's decision relieves them of their obligation under MCL 418.862(2) [MSA 17.237(862) (2)]." The order specifically gave appellants thirty days within which to provide the commission "an affirmation of the bills that had been received, the date the medical services were provided, and a showing that the bills had been paid pursuant to the magistrate's order of January 22, 1989, awarding reasonable and necessary medical expenses related to plaintiffs back. Failure to provide timely compliance with MCL 418.862(2) [MSA 17.237(862)(2)] shall subject defendants' appeal to dismissal."
On July 18, 1991, appellants filed a motion to remand and consolidate or hold in abeyance, because trial on appellants' application for hearing filed in February 1991, objecting to the reasonableness and necessity of the medical expenses being claimed by plaintiff under the magistrate's award, was scheduled for July 31, 1991, less than two weeks from that date. It was appellants' position that they were following the Workers' Compensation Health Care Services Rules that became effective in 1989, and that specifically covered the process for resolving disputes between carriers and health care providers, and that, therefore, their appeal was not subject to dismissal by the appellate commission. Appellants noted that their application would be treated the same as a sixty-day case under the expedited treatment provided for under the rules. Further, appellants said that it would be more economical and efficient if the appellate commission would either remand or hold in abeyance while the parties fully developed the record relating to the dispute.
Plaintiff filed an answer on July 25, 1991, contending that appellants were in violation of the Workers' Disability Compensation Act as a result of their refusal to pay plaintiffs medical bills.
As indicated above, on August 30, 1991, the commission granted plaintiffs renewed motion to dismiss and denied appellants' motion for remand and consolidation or to hold the proceedings in abeyance. The dissenting commissioner voted to deny appellants' motion for remand and consolidation or to hold the proceedings in abeyance, and also voted to deny plaintiffs renewed motion for dismissal of appellants' appeal.
While MCL 418.862(2); MSA 17.237(862X2) states that medical benefits shall be provided from the date of the award and shall continue until final determination of the appeal or for a shorter period if specified in the award, it does not contain any penalty provision. Further, the monetary penalties provided in MCL 418.801(3); MSA 17.237(801X3) for failure to provide medical benefits do not apply in this case where there is an ongoing dispute. Nevertheless, this Court holds that the appellate commission does have the implied authority to dismiss appeals for noncompliance with MCL 418.862(2); MSA 17.237(862X2). See McAvoy v H B Sherman Co, 401 Mich 419; 258 NW2d 414 (1977). Moreover, to the extent that Perry v Sturdevant Mfg Co, 124 Mich App 11; 333 NW2d 366 (1983), may be read as inconsistent with this decision, we decline to follow it.
MCL 418.862(2); MSA 17.237(862)(2) states that the filing of a claim for review shall not operate as a stay with regard to the providing of medical benefits required by the terms of the award, and that, if the benefit amount is reduced or rescinded by a final determination, the carrier shall be reimbursed from the general fund of the state for the amount of the expenses incurred in providing the medical benefits pending the appeal in excess of the amount finally determined.
1989 AACS, R 408.32a, (Rule 2a), effective November 4, 1989, provides that reimbursements for payments made in accordance with the provisions of § 862(2) shall be made from the medical benefit fund. To be reimbursed from that fund, medical benefits must have been required by the terms of an award and paid in accordance with MCL 418.315; MSA 17.237(315) and the rules published pursuant to that section.
Rule 2a (4) and (5) requires applications for reimbursement from the medical benefit fund to be made not less than thirty days after the benefit amount is reduced or rescinded by a final determination, and that reimbursement from the medical benefit fund shall be consistent with benefits awarded in the magistrate's decision. Further, reimbursement will only be made for medical benefits that were provided between the bureau's mailing date of the magistrate's award and the date of the final determination of the appeal, or for a shorter period as specified in the award.
Rule 2a(9) authorizes the medical benefit fund to determine if all or part of the request for reimbursement is not proper, and to so notify the carrier in writing. If the carrier disputes that determination, it may file an application for mediation or a hearing.
The rules adopted pursuant to § 315, supra, are known as the Workers' Compensation Health Care Services Rules, and they became effective June 28, 1989. Part 19 thereof, being 1989 AACS, R 418.1901 (Rule 1901) et seq., sets forth the process for resolving differences between carriers and providers regarding medical bills.
R 418.1904 (Rule 1904) specifically addresses "Disputes" and reads in pertinent part:
, Rule 1904. (1) When a carrier disputes a bill or portion thereof pursuant to these rules, a notice given pursuant to R 418.1901(1) creates an ongoing dispute for the purpose of section 801 of the act. The time for making payment of a bill under section 801 of the act shall not run unless the bill is properly submitted according to applicable rules and statutes.
(2) Any dispute concerning the medical appropriateness of health care or a health care service, utilization of health care or a health care service, the need for health care or a health care service, and any dispute over the cost of health care or a health care service shall be resolved as if it were an application for mediation or hearing filed under section 847 of the act [MCL 418.847; MSA 17.237(847)].
(3) Where the dispute results in the denial of medical treatment for a worker, or where there is a petition by an employer to stop its liability for medical benefits previously ordered, including proceedings under subrule (6) of this rule, it shall receive the same expedited treatment accorded to 60-day cases under section 205 of the act [MCL 418.205; MSA 17.237(205)], except the bureau may refer the matter to mediation under section 223 of the act [MCL 418.223; MSA 17.237(223)].
(6) If a carrier is required by the terms of an award to provide medical beneñts, the carrier shall continue to provide those beneñts, until there is a different order by a magistrate, the appellate commission, the court of appeals, or the supreme court. This subrule shall not preclude the use of the maximum allowable payments provided by these rules for the payment of bills by carriers. When a carrier files an application to stop or limit its liability under this subrule, it shall receive the expedited treatment provided for under subrule (3) of this rule. [Emphasis added.]
It is apparent that appellants did not comply with the applicable law. When they refused to pay the medical bills as required, both by the magistrate's order and the appellate commission's order, they subjected themselves to the possibility of a dismissal as stated in the commission's order.. What appellants should have done with the disputed medical bills was to pay them, or the maximum allowed under the rules if that amount was less, and then proceed with an expedited hearing as provided in Rule 1904(3) and (6), supra.
Affirmed. Costs to plaintiff.
Marilyn Kelly, J., concurred.