Court Opinion

ID: 9396797
Source: CourtListenerOpinion
Date Created: 2023-05-23 18:08:17.106177+00
Date Added: 2024-06-11T17:19:19.837036
License: Public Domain

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                            2023 PA Super 88

 ELITE CARE, RX, LLC                   :   IN THE SUPERIOR COURT OF
                                       :        PENNSYLVANIA
              v.                       :
                                       :
 PREMIER COMP SOLUTIONS, LLC;          :
 LAUNDRY OWNERS’ MUTUAL                :
 LIABILITY INSURANCE                   :
 ASSOCIATION; UPMC BENEFIT             :
 MANAGEMENT SERVICES, INC.             :
 D/B/A UPMC WORK PARTNERS;             :
 LACKAWANNA CASUALTY COMPANY;          :
 AND BRICK STREET MUTUAL               :
 INSURANCE COMPANY                     :
                                       :
 APPEAL OF: PREMIER COMP               :
 SOLUTIONS, LLC, LAUNDRY               :
 OWNERS’ MUTUAL LIABILITY              :
 INSURANCE ASSOCIATION,                :
 LACKAWANNA CASUALTY COMPANY           :
 AND BRICK STREET MUTUAL               :
 INSURANCE COMPANY                     :   No. 1144 WDA 2020

               Appeal from the Order Entered June 5, 2020
    In the Court of Common Pleas of Allegheny County Civil Division at
                         No(s): GD-19-005312

BEFORE: PANELLA, P.J., OLSON, J., DUBOW, J., KUNSELMAN, J., NICHOLS,
        J., MURRAY, J., McLAUGHLIN, J., McCAFFERY, J., and SULLIVAN,
        J.

OPINION BY KUNSELMAN, J.:                           FILED: MAY 23, 2023

                             I. Introduction

     Premier Comp Solutions, LLC; Laundry Owners’ Mutual Liability

Insurance Association; Lackawanna Casualty Company; and Brick Street

Mutual Insurance Company (hereafter “Insurers”) appeal from the order
J-E02002-22

overruling their preliminary objections to Elite Care, Rx, LLC’s complaint.1 The

trial court rejected Insures’ challenge to its subject-matter jurisdiction. We

affirm.

                           II. Factual & Procedural Background

       When reviewing an order overruling preliminary objections challenging

subject-matter jurisdiction, our “standard of review is de novo, and the scope

of review is plenary.” Mazur v. Trinity Area Sch. Dist., 961 A.2d 96, 101

(Pa. 2008). We reverse “only when, based on the facts pleaded, it is clear

and free from doubt that the complainant will be unable to prove facts legally

sufficient to establish a right to relief.” Id. Also, this Court “must accept as

true all well-pleaded, material, and relevant facts alleged in the complaint and

every inference that is fairly deducible from those facts.” Id. Therefore, we

turn to Elite Care’s complaint to glean the relevant facts of this case.

       According to Elite Care, Insurers offer workers’ compensation insurance

to employers to cover the costs of treatment and medication under the

Workers’ Compensation Act for employees who suffer work-related injuries.

Complaint at ¶8. The employees may choose to fill their prescriptions to treat

these injuries through Patient Direct Rx, a home-delivery pharmacy. Id. at

¶12.      After Patient Direct Rx fills the prescriptions, certain licensed health

care providers (“Providers”) purchase the claims arising from these

____________________________________________

1Since the filing of this appeal, Laundry Owners' Mutual Liability Insurance
Association settled with Elite Care and discontinued its appeal in this matter.

                                           -2-
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prescriptions (i.e., the right to bill and collect from the insurance carrier) from

Patient Rx for fair-market value. Id. at ¶14. The Providers are then legally

entitled to collect payment for the prescriptions from the insurance carrier and

bear the risk of collection. Elite Care (a separate entity) serves as billing agent

for the Providers and ensures their accounts receivable are properly paid. Id.

at ¶16.

      Elite Care avers that it has implemented this practice of collecting on

behalf of healthcare providers throughout the country, without issue or

objection by other insurers.      Id. at ¶18. Even within Pennsylvania, all

insurance companies (other than Insurers) reimburse Elite Care the price of

employees’ prescriptions without objection. Id. at ¶19. As such, Elite Care

claims that Insurers are intentionally and wrongfully refusing to pay for

prescriptions that the covered employees have received and for which

payment is due. Id. at ¶21.        Elite Care contends that, when this lawsuit

began, Insurers owed $548,035.28 in prescription fees for 110 different

employees and that figure continues to accrue as more bills are being

improperly denied. Id. at ¶ 38.

      After negotiations stalled, Insurers indicated that Elite Care’s “exclusive

remedy” was through an Application for Fee Review in the Pennsylvania

Bureau of Workers’ Compensation (“Bureau”). Id. at ¶ 29. Hence, Elite Care

filed an Application for Fee Review before the Bureau’s Medical Fee Review

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Section.2 When the Medical Fee Review Section began ruling in favor of Elite

Care, Insurers appealed those rulings “to a [Fee Review] Hearing Officer[3]

and argued that the Fee Review [Section] lacked jurisdiction over this issue of

whether Elite Care was an agent of these providers.” Id. at ¶ 32. The Hearing

Officer issued opinions and orders holding that the Fee Review Section lacked

subject-matter jurisdiction and advised “that Elite Care may wish to pursue

other remedies, which may be available outside of the fee-review process.”

Id. at ¶ 33.

____________________________________________

2The Medical Fee Review Section is an administrative body that may decide
only the “amount and timeliness of the payment made by an insurer.” 34 Pa.
Code. § 127.251. It has no authority to make legal conclusions. See Crozer
Chester Medical Center v. Bureau of Workers’ Compensation, Health
Care Services Review Division, 22 A.3d 189, 196-97 (Pa. 2011).

3 The Fee Review Hearing Office conducts evidentiary hearings on the validity
of a fee-review determination. The hearing includes an examination of “all
relevant evidence” and the testimony is “recorded and a full record kept of the
proceeding.” 34 Pa. Code § 127.259(b), (d). The Hearing Office issues a “fee
review adjudication” that “will include all relevant findings and conclusions and
state the rationale.” 34 Pa. Code § 127.260(a). These procedures ensure
that the Bureau’s adjudication comports with the requirements of
Administrative Agency Law, 2 Pa. C.S.A. § 504, for a valid adjudication.

      By contrast, the Medical Fee Review Section performs an administrative
function. Its review is limited to the timeliness of an employer’s payment and
the correct amount owed to the provider. 34 Pa. Code § 127.252. Thus,
according to the Commonwealth Court, it would violate due process if the
Medical Fee Review Section were to make such a determination. See Amour
Pharmacy v. Bureau of Workers’ Comp. Fee Rev. Hearing Office, 206
A.3d 660, 670 (Pa. Cmwlth. 2019) (en banc). As such, either a Hearing Officer
or a Workers’ Compensation Judge must make legal determinations on behalf
of the Bureau, rather than the Fee Review Section.

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        Based on the administrative adjudication that the Medical Fee Review

Section lacked subject-matter jurisdiction, Elite Care filed the instant civil

action. Elite Care’s complaint included counts of declaratory judgment, fraud,

civil conspiracy, and unjust enrichment.

        In response, Insurers filed various preliminary objections, one of which

alleged the trial court lacked subject-matter jurisdiction over the legal issues

raised in the complaint.4 Following oral argument, the trial court overruled

Insurers’ preliminary objections. Regarding subject-matter jurisdiction, the

court determined this case was not a workers’ compensation matter, but

rather a claim for damages based on allegations of conspiracy and fraud. The

trial court refused to certify its order for an immediate appeal, and Insurers

filed a timely Petition for Permission to Appeal.5

        On October 30, 2020, this Court granted review of the following issue:

           Because the issues raised by the complaint . . . have, as
           their ultimate basis, injuries compensable under the act,
           must they be decided by a workers’ compensation judge or
           a fee-review Hearing Officer and not by the court of common
           pleas?

____________________________________________

4UPMC Benefit Management Services Inc. filed preliminary objections but did
not object to the trial court’s subject-matter jurisdiction. That company did
not participate in this appeal.

5   See Pennsylvania Rule of Appellate Procedure 1311(a)(1).

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Insurers’ Brief at 7 (capitalization removed). A three-judge panel of this Court

unanimously affirmed the trial court’s decision. Upon petition of the Insurers,

we granted en banc review.

                                      III. Analysis

        Insurers attack the trial court’s subject-matter jurisdiction based upon

the Workers’ Compensation Act (“WCA”).6 They contend that the Bureau has

exclusive jurisdiction over this matter, because the prescriptions at issue treat

work-related injuries.      Insurers argue that all counts of the complaint fall

under the Bureau’s jurisdiction. See Insurers’ Brief at 24-25. We disagree.

        Subject-matter jurisdiction is “the power of the court to hear the cases

of the class to which the case before the court belongs, that is, to enter into

inquiry, whether or not the court may ultimately grant the relief requested.”

Harley v. HealthSpark Found., 265 A.3d 674, 687 (Pa. Super. 2021),

reargument denied (Dec. 1, 2021), appeal denied, 277 A.3d 1105 (Pa. 2022).

“Except where exclusive original jurisdiction of an action or proceeding is by

statute . . . vested in another court of this Commonwealth, the courts of

common pleas shall have unlimited original jurisdiction of all actions and

proceedings, including all actions and proceedings heretofore cognizable by

law or usage in the courts of common pleas.” 42 Pa.C.S.A. § 931(a).

____________________________________________

6   See 77 P.S. §§ 1-2708.

                                           -6-
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       In its complaint, Elite Care raised counts of declaratory judgment, fraud,

civil conspiracy, and unjust enrichment. Thus, we must determine whether

these matters are actions over which courts of common pleas have subject-

matter jurisdiction or whether they lie exclusively within the jurisdiction of the

Bureau.

       The General Assembly established the Bureau in 1915 by passing the

first iteration of the Workers’ Compensation Act.7 Elite Care’s three common-

law causes of action clearly predate the Bureau’s establishment and have been

under the subject-matter jurisdiction of the courts of common pleas since time

immemorial. Moreover, we find nothing in the current Workers’ Compensation

Act granting the Bureau jurisdiction over those specific common-law torts or

contract matters. The legislative purpose of the WCA was to divest trial courts

of jurisdiction over work-related-negligence cases between employers and

employees. In place of trial-court jurisdiction, the statute grants the Bureau

administrative and appellate authority over the compensation of employees

who are injured at work, without regard to fault.

       In its administrative scheme, the WCA provides a remedy for employees

with unpaid claims to seek recourse before a Worker’s Compensation Judge.

A claimant can file a petition to establish an insurer’s liability to a billing agent,

____________________________________________

7 See Pennsylvania Department of Labor & Industry, Pennsylvania Workers’
Compensation Act, available at https://www.dli.pa.gov/Individuals/Workers-
Compensation/publications/Pages/WC%20Act/WC-Act-Landing-Page.aspx
(last visited 11/30/22).

                                           -7-
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such as a review petition or a penalty petition. See Amour Pharmacy v.

Bureau of Workers’ Comp. Fee Rev. Hearing Office, 206 A.3d 660, 666

(Pa. Cmwlth. 2019) (en banc). Indeed, the court in Amour Pharmacy stated,

“claimants have an incentive to file a petition on behalf of a provider, because

when an insurer violates the WCA by failing to make proper payment to a

medical provider, the penalty is payable to the claimant.”          Id. (citing

Selective Insurance Co. of Am. v. Bureau of Workers' Comp. Fee Rev.

Hearing Office, 86 A.3d 300 (Pa. Cmwlth. 2014)).           However, regarding

putative providers and billing agents (like Elite Care), the Amour Pharmacy

Court found an “absence of a direct statutory remedy” for such entities. Id.

      In Armour Pharmacy, an employer challenged the authority of the Fee

Review Section to award reimbursement to the pharmacy on the grounds that

it was not a “provider” under the WCA. The employer further challenged the

jurisdiction of the Hearing Officer to determine whether the pharmacy was a

provider. Based on Selective Insurance, supra, the Hearing Office ruled

that it lacked jurisdiction over the legal issue of whether the pharmacy was a

provider and dismissed the pharmacy’s fee-review petitions. The pharmacy

petitioned for review of that determination before the Commonwealth Court

and argued that its due process rights would be denied if the Bureau did not

adjudicate its status as provider under the WCA. The pharmacy asserted that

the language of the WCA did not give putative providers a procedure to

adjudicate their rights. The Armour Pharmacy Court agreed.

                                     -8-
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      The court also acknowledged that it could not expand the scope of a fee

review to create a remedy for those entities, because enlarging the scope of

the WCA is a matter “for the legislature assuming there is a need for a provider

to have another remedy.” Id. Critically, the court also observed that, if a

party believes “the other is effecting a fraud, it can pursue that claim in a legal

action, such as a declaratory-judgment action.” Id. at 667.

      Despite those acknowledgements, the Armour Pharmacy Court held

that before a claim can go to fee review, a hearing officer must determine the

legal issue of who is a “provider” under the WCA. “Whether an entity is a

‘provider’ has been considered a question of employer liability and, thus

beyond the scope of a fee-review proceeding.” Id. at 666. The court stated

that, when an “employer challenges a fee determination of the Medical Fee

Review Section for the stated reason that the medical service was not

rendered by a ‘provider’ within the meaning of the WCA, that threshold

question must be decided by the Hearing Office.” Id. Significantly, the issue

could not be decided by the Medical Fee Review Section.

      Thus, although the WCA creates no administrative proceeding for a

putative provider to seek redress within the Bureau, the Commonwealth Court

manufactured one. That court remanded the matter to the Hearing Office for

a determination of whether the billing agent was a provider within the meaning

of the WCA. In doing so, the Armour Pharmacy Court created jurisdiction

in the Bureau even though the legislature had not.

                                       -9-
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      Respectfully, in our view, the Commonwealth Court lacked the power to

graft an extra-statutory scheme onto the WCA for the benefit of the putative

provider. The Supreme Court of Pennsylvania has held that, under 1 Pa.C.S.A.

§ 1923, courts may not add to a statute, because this “expands its application”

in a manner that the legislature did not intend. Crown Castle NG E. LLC v.

Pennsylvania Pub. Util. Comm'n, 234 A.3d 665, 682 (Pa. 2020). When

“the language of a statute is clear and unambiguous, a court may not add

matters the legislature saw fit not to include under the guise of construction.”

Mohamed v. Com., Dep't of Transp., Bureau of Motor Vehicles, 40 A.3d

1186, 1194–95 (Pa. 2012).

      Attempting to effectuate due process, the Armour Pharmacy Court

legislated from the bench. The court created an administrative proceeding for

putative providers by bestowing a jurisdiction upon Bureau Hearing Officers.

That proceeding and jurisdiction cannot be found in the language of the WCA.

Therefore, we decline to follow Armour Pharmacy, in so far as it stands for

the proposition that Elite Care may or should have sought redress within the

Bureau.

      Simply stated, the Worker’s Compensation Act does not provide for an

administrative proceeding by or against putative providers or their billing

agents in the Bureau. Such entities have no standing there, because the WCA

does not confer it upon them.     That statute has not divested the original

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jurisdiction of the courts of common pleas over matters such as the instant

lawsuit.

       In this case, Elite Care has asserted four causes of action. We begin

with its statutory cause of action for declaratory judgment. In the Declaratory

Judgment Act, the General Assembly dictates that “Courts of record, within

their respective jurisdictions, shall have power to declare rights, status, and

other legal relations whether or not further relief is or could be claimed.” 42

Pa.C.S.A. § 7532 (emphasis added). This statute makes no mention of the

Bureau. By the plain language of Section 7532, the legislature clearly vested

jurisdiction over declaratory-judgment actions in the courts of records, i.e.,

the courts of the common pleas and the Commonwealth Court (when sitting

in its original jurisdiction).

       The Declaratory Judgment Act further identifies who may file an action

for relief:

       Any person interested under . . . contract, or other writings
       constituting a contract, or whose rights, status, or other legal
       relations are affected by a statute, municipal ordinance, contract,
       or franchise, may have determined any question of construction
       or validity arising under the instrument, statute, ordinance,
       contract, or franchise, and obtain a declaration of rights, status,
       or other legal relations thereunder.

42 Pa.C.S.A. § 7533.

       Here, Elite Care is an interested party to its contracts with various

Providers. Its rights and legal relations are affected by Insurers’ actions in

denying those Providers payment for the prescriptions at issue.       Elite Care

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seeks a determination of its rights to be paid on behalf of Providers, under its

contracts, as their billing agents.   Thus, Elite Care is a person interested in

certain contracts with the Providers, and, therefore, it may request declaratory

relief under the Declaratory Judgment Act.

      And, as noted, the court of common pleas is the court of record for such

an action to declare rights, status, and other legal relations whether further

relief is or could be claimed. 42 Pa.C.S.A. § 7532.

       Additionally, Elite Care has filed claims of fraud, civil conspiracy, and

unjust enrichment. Those claims fall within the exclusive, original jurisdiction

of the Court of Common Pleas of Allegheny County. Therefore, the trial court

correctly ruled that it has subject-matter jurisdiction over the common-law

causes of action in this case and the statutory action for declaratory judgment.

See 42 Pa.C.S.A. § 7532, supra.

      The WCA does not divest trial courts of that jurisdiction over causes of

actions where, as here, the parties to a lawsuit are an employer’s insurers and

a provider’s billing agent.

      Order affirmed. Case remanded for further proceedings.

      Jurisdiction relinquished.

      Panella, P.J., Dubow, Murray, McCaffery and Sullivan, JJ join this

Opinion.

      McLaughlin, J., files a Concurring Opinion in which Murray, J. joins.

      Nichols, J., concurs in the result.

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     Olson, J. files a Dissenting Opinion.

Judgment Entered.

Joseph D. Seletyn, Esq.
Prothonotary

Date: 5/23/2023

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