Court Opinion

ID: 7618024
Source: CourtListenerOpinion
Date Created: 2022-07-29 14:05:25.18371+00
Date Added: 2024-06-11T16:25:01.797524
License: Public Domain

RENDERED: JULY 22, 2022; 10:00 A.M.
                        NOT TO BE PUBLISHED

               Commonwealth of Kentucky
                         Court of Appeals

                            NO. 2022-CA-0332-WC

P & P CONSTRUCTION, INC.                                          APPELLANT

                 PETITION FOR REVIEW OF A DECISION
v.             OF THE WORKERS’ COMPENSATION BOARD
                       ACTION NO. WC-17-83257

DANIEL FARLEY; DR. BRAD FINE,
LEXINGTON FOOT & ANKLE
CENTER, INC.; ARH DANIEL
BOONE CLINIC HARLAN; HARLAN
ARH; AIR EVAC LIFETEAM; GRAM
RESOURCES, INC.; HONORABLE
PETER NAAKE, ADMINISTRATIVE
LAW JUDGE; AND WORKERS’
COMPENSATION BOARD                                                 APPELLEES

                               OPINION
                       REVERSING AND REMANDING

                                 ** ** ** ** **

BEFORE: DIXON, LAMBERT, AND MCNEILL, JUDGES.

LAMBERT, JUDGE: P & P Construction, Inc., (P & P) has petitioned this Court

for review of the February 25, 2022, decision of the Workers’ Compensation
Board (the Board) affirming the November 13, 2020, opinion and order of the

Administrative Law Judge (ALJ) finding certain medical bills submitted more than

45 days after the date of service was initiated were not barred by application of

Kentucky Revised Statutes (KRS) 342.020(4). Because we agree with P & P that

these bills should have been barred by application of the statute, we reverse and

remand.

             Daniel Farley worked as coal mining foreman for P & P beginning in

2015. In May 2017, he sustained a work-related injury to his left leg when a pump

exploded, for which he underwent multiple surgeries. He filed an application for

resolution of his injury claim in late February 2019. And in October 2019, Farley

filed a second claim seeking benefits for a psychological overlay injury, alleging

that he was experiencing post-traumatic stress disorder (PTSD) as a result of his

May 2017 work injury. He began seeking counseling from Dr. Syed Raza in

August 2017 and from Harlan ARH for PTSD, depression, and anxiety.

             In April 2019, Kentucky Employers’ Mutual Insurance (KEMI), the

insurance carrier for P & P, filed a Form 112 medical fee dispute, in which it

disputed an air ambulance bill from Air Evac Lifeteam and a proposed foot surgery

by Dr. Brad Fine of Lexington Foot and Ankle Center, Inc. Because P & P has not

appealed from the portion of the Board’s decision to uphold the ALJ’s decision

                                         -2-
that those medical bills were compensable, we shall not address these fee contests

any further.

               In July 2020, the parties entered into an agreement as to

compensation, which provided that P & P (through KEMI) had paid $107,681.50

in medical expenses as well as temporary total disability (TTD) benefits for close

to two years in the amount of $71,390.16. Farley agreed to accept a lump sum of

$125,000.00 to settle his remaining claims for benefits. The parties agreed that a

medical service provider was required to submit a statement for services within 45

days of the date the treatment was initiated and that neither P & P nor KEMI were

liable for untimely submitted medical billing.

               The ALJ held a benefit review conference on August 30, 2020, noting

that the claim had been settled as to income and future medical benefits and that

the medical disputes as to the air evacuation and Dr. Fine’s billing were still

pending. The ALJ also approved the agreement as to compensation.

               On September 14, 2020, P & P filed a motion to amend its Form 112

medical fee dispute to contest certain medical bills from Harlan ARH/Daniel

Boone Clinic and Harlan ARH/Gram Resources that were submitted more than 45

days after the date treatment was initiated, pursuant to KRS 342.020(4). These

disputed bills are listed below:

                                           -3-
     Medical Provider              Date of Service              Date received by
                                                                     KEMI
 Harlan ARH/Daniel            October 10, 2018              December 12, 2018
 Boone Clinic
 Harlan ARH/Daniel            July 10, 2018                 December 12, 2018
 Boone Clinic
 Harlan ARH/Daniel            May 1, 2018                   December 13, 2018
 Boone Clinic
 Harlan ARH/Daniel            March 1, 2018                 December 13, 2018
 Boone Clinic
 Harlan ARH/Daniel            January 3, 2018               December 12, 2018
 Boone Clinic
 Harlan ARH/Gram              May 8, 2017                   September 6, 2018
 Resources

The bills from the Daniel Boone Clinic were for Farley’s treatment for PTSD and

mood disorder, while the bill from Gram Resources was for x-rays taken following

Farley’s work accident. The ALJ permitted P & P to amend its Form 112 to

include its contest of the above bills. In its brief to the ALJ, P & P argued that it

was not liable for medical bills that were not submitted within the 45-day rule,

citing the mandatory and unambiguous language in KRS 342.020(4).

             The ALJ entered an opinion and order on November 13, 2020, finding

that P & P was liable for all of the contested medical bills. As to the timeliness

issue, the ALJ held:

                  [P & P] disputes treatment billing based on late
             submission of the medical billing based on KRS

                                          -4-
                 342.020(1),[1] which requires medical services providers
                 to submit medical expenses to the employer, insurer, or
                 medical payment obligor within 45 days after treatment
                 is initiated. The Workers’ Compensation Board has
                 consistently held on a number of occasions the 45 day
                 rule for submission of statements for services in KRS

1
    The version of KRS 342.020(1) in effect until July 13, 2018, stated:

                 (1) In addition to all other compensation provided in this chapter,
                 the employer shall pay for the cure and relief from the effects of an
                 injury or occupational disease the medical, surgical, and hospital
                 treatment, including nursing, medical, and surgical supplies and
                 appliances, as may reasonably be required at the time of the injury
                 and thereafter during disability, or as may be required for the cure
                 and treatment of an occupational disease. The employer’s
                 obligation to pay the benefits specified in this section shall
                 continue for so long as the employee is disabled regardless of the
                 duration of the employee’s income benefits. In the absence of
                 designation of a managed health care system by the employer, the
                 employee may select medical providers to treat his injury or
                 occupational disease. Even if the employer has designated a
                 managed health care system, the injured employee may elect to
                 continue treating with a physician who provided emergency
                 medical care or treatment to the employee. The employer, insurer,
                 or payment obligor acting on behalf of the employer, shall make all
                 payments for services rendered to an employee directly to the
                 provider of the services within thirty (30) days of receipt of a
                 statement for services. The commissioner [previously, the
                 executive director] shall promulgate administrative regulations
                 establishing conditions under which the thirty (30) day period for
                 payment may be tolled. The provider of medical services shall
                 submit the statement for services within forty-five (45) days of the
                 day treatment is initiated and every forty-five (45) days thereafter,
                 if appropriate, as long as medical services are rendered. Except as
                 provided in subsection (4) of this section, in no event shall a
                 medical fee exceed the limitations of an adopted medical fee
                 schedule or other limitations contained in KRS 342.035, whichever
                 is lower. The commissioner [previously, the executive director]
                 may promulgate administrative regulations establishing the form
                 and content of a statement for services and procedures by which
                 disputes relative to the necessity, effectiveness, frequency, and cost
                 of services may be resolved.

The time requirements are now set forth in KRS 342.020(4).

                                                  -5-
            342.020(1) has no application in a pre-award situation.
            The Kentucky Supreme Court in R.J. Corman Railroad
            Construction v. Haddix, 864 S.W.2d 915, 918 (Ky.
            1993)[,] pointed out that the requirement in KRS
            342.020(1) for the payment of bills within 30 days of
            receipt of the statement for services “applies to medical
            statements received by an employer after an ALJ has
            determined that said bills are owed by the employer.” In
            other words, it does not apply pre-award. The Court in
            R.J. Corman stated, “until an award has been rendered,
            the employer is under no obligation to pay any
            compensation, and all issues, including medical benefits,
            are justiciable.” By extension, the Workers’
            Compensation Board has found the 60 [day] requirement
            contained in 803 [Kentucky Administrative Regulations]
            KAR 25:096 § 11 is likewise not applicable until an
            award has been entered finding the claim is compensable.
            The Board held “the requirement that the provider submit
            statements for services within forty-five days of
            treatment would also apply post-award and not during the
            pendency of a claim as is the case here.”

                  The Administrative Law Judge finds that the 45
            day rule cited by [P & P] as a bar to its responsibility to
            pay for the medical treatment of an injured employee is
            inapplicable prior to the entry of an award or agreement
            which establishes that a work-related injury has occurred.

Accordingly, the ALJ ordered P & P to pay the contested medical bills.

            P & P appealed the ALJ’s decision to the Board pursuant to KRS

342.285, and the appeal was placed in abeyance pending a determination by the

Supreme Court of Kentucky in Wonderfoil, Inc. v. Russell, Case No. 2020-SC-

0301-WC. The matter was removed from abeyance once the Supreme Court’s

opinion in Wonderfoil became final in October 2021, and the parties argued their

                                        -6-
respective positions in their briefs. P & P pointed out that in Wonderfoil, Inc. v.

Russell, 630 S.W.3d 706 (Ky. 2021), the Supreme Court did not address whether

KRS 342.020(4) applied pre-award but rather addressed two administrative

regulations concerning the time for claiming expenses and the filing of unpaid

medical bills by claimants. Farley argued that the ALJ properly held that the 45-

day rule did not bar P & P’s responsibility to pay the contested medical bills as that

rule did not apply before the entry of an award or agreement establishing that a

work-related injury had occurred.

             The Board entered an opinion on February 25, 2022, affirming the

ALJ’s decision. In holding that the 45-day requirement did not apply pre-award,

the Board explained:

                    We find no merit to the argument the ALJ erred by
             finding P & P liable for medical bills submitted more
             than forty-five days after service was rendered pursuant
             to KRS 342.020(4). This Board has held on numerous
             occasions the forty-five-day rule for submission of
             statements for services in KRS 342.020 has no pre-award
             application. The Kentucky Supreme Court in R.J.
             Corman Railroad Construction v. Haddix, supra, pointed
             out the requirement in KRS 342.020 for the payment of
             bills within thirty days of receipt of the statement for
             services “applies to medical statements received by an
             employer after an ALJ has determined that said bills are
             owed by the employer.” In other words, it does not apply
             pre-award.

                   We held in Brown Pallet v. David Jones, Claim
             No. 2003-69633 (entered September 20, 2007) the
             reasoning of the Supreme Court in R.J. Corman Railroad

                                         -7-
Construction v. Haddix, supra, concerning the thirty-day
provision for payment of medical benefits should also
apply to the forty-five day rule for submission of medical
bills. The Court in R.J. Corman stated, “until an award
has been rendered, the employer is under no obligation to
pay any compensation, and all issues, including medical
benefits, are justiciable.”

       We additionally note that pursuant to Garno v.
Selectron USA, 329 S.W.3d [301] (Ky. 2010), the sixty-
day rule found at 803 KAR 25:096 § 11 applies only after
an interlocutory decision or final award has been entered.
There was no request for an interlocutory decision in this
claim, and no such order was entered. No determination
was made regarding compensability of Farley’s condition
until the ALJ’s November 13, 2020 decision, or at the
earliest, the September 1, 2020 approval of the Form
110-I settlement agreement, in either instance, long after
the bills were submitted to P & P’s insurer.

       We find the ALJ properly declined to enforce the
forty-five-day rule regarding the contested medical
expenses pre-award, and we affirm on this issue. Despite
its argument regarding noncompliance by Farley’s
medical providers, we find it significant that P & P did
not file a medical dispute regarding those bills for nearly
two years after their receipt by its insurer. Farley’s
medical expenses were incurred prior to the ALJ’s
decision and were submitted to the insurer during the
pendency of the claim. We find the ALJ correctly found
P & P responsible for Farley’s medical expenses
contested on appeal, and we affirm.

       Contrary to P & P’s arguments, we find the
rationale contained in R.J. Corman Railroad Construction
v. Haddix, supra, is applicable. We additionally find
instructional the recent holding by the Kentucky Supreme
Court in Wonderfoil, supra. There the Court held the
sixty-day submission requirement for injured workers
only applied post-award, or a determination of

                            -8-
              compensability by an ALJ, stating specifically,
              “Accordingly, when viewed in the context of the
              regulatory scheme, 803 KAR 25:096, § 11’s application
              only post-award best effectuates the intent of the
              Commissioner and prevents an absurd result.” By
              extension, we find the forty-five-day requirement set
              forth in KRS 342.020(4) likewise is applicable only after
              a determination of compensability of a claim by an ALJ.
              We further note 803 KAR 25:010 § 13 contains sufficient
              provisions to dissuade purposeful delay.

This petition for review now follows.

              On appeal, P & P continues to argue that the Board and the ALJ

incorrectly ruled that the 45-day rule applies only post-award and that the holdings

in R.J. Corman, supra, and Wonderfoil, supra, should not have been extended to

this particular part of the statute.

              This Court’s standard of review in workers’ compensation appeals is

well-settled in the Commonwealth. “The function of further review of the [Board]

in the Court of Appeals is to correct the Board only where [the] Court perceives the

Board has overlooked or misconstrued controlling statutes or precedent, or

committed an error in assessing the evidence so flagrant as to cause gross

injustice.” Western Baptist Hosp. v. Kelly, 827 S.W.2d 685, 687-88 (Ky. 1992).

              Whether the 45-day rule for providers to submit statements for

services set forth in KRS 342.020(4) applies both pre- and post-award is a question

of statutory interpretation. In Pearce v. University of Louisville, by and through its

Board of Trustees, 448 S.W.3d 746 (Ky. 2014), the Supreme Court of Kentucky

                                         -9-
addressed the standard of review for appeals raising an issue of statutory

construction:

                    Statutory construction is an issue of law that we
             review de novo. Therefore, “[t]he trial court’s and Court
             of Appeals’s [sic] construction of statutes is also entitled
             to no deference on appeal. . . .” Cumberland Valley
             Contractors, Inc. v. Bell County Coal Corp., 238 S.W.3d
             644, 647 (Ky. 2007) (citing Bob Hook Chevrolet Isuzu,
             Inc. v. Kentucky Transportation Cabinet, 983 S.W.2d
             488, 490 (Ky. 1998)).

                    In construing a statute, it is fundamental that our
             foremost objective is to determine the legislature’s intent
             in enacting the legislation. “To determine legislative
             intent, we look first to the language of the statute, giving
             the words their plain and ordinary meaning.” Richardson
             v. Louisville/Jefferson County Metro Government, 260
             S.W.3d 777, 779 (Ky. 2008). Further, we construe a
             “statute only as written, and the intent of the Legislature
             must be deduced from the language it used, when it is
             plain and unambiguous. . . .” Western Kentucky Coal Co.
             v. Nall & Bailey, 228 Ky. 76, 14 S.W.2d 400, 401-02
             (1929). Therefore, when a statute is unambiguous, we
             need not consider extrinsic evidence of legislative intent
             and public policy. County Bd. of Educ. Jefferson County
             v. Southern Pac. Co., 225 Ky. 621, 9 S.W.2d 984, 986
             (1928). However, if the statutory language is ambiguous,
             we will look to other sources to ascertain the legislature’s
             meaning, such as legislative history and public policy
             considerations. MPM Financial Group Inc. v. Morton,
             289 S.W.3d 193, 198 (Ky. 2009). Further, we “read the
             statute as a whole, and with other parts of the law of the
             Commonwealth, to ensure that our interpretation is
             logical in context.” Lichtenstein v. Barbanel, 322
             S.W.3d 27, 35 (Ky. 2010).

Pearce, 448 S.W.3d at 749.

                                         -10-
            KRS 342.020 addresses the payment of medical expenses by the

employer and provides in relevant part as follows:

            (1) In addition to all other compensation provided in this
            chapter, the employer shall pay for the cure and relief
            from the effects of an injury or occupational disease the
            medical, surgical, and hospital treatment, including
            nursing, medical, and surgical supplies and appliances, as
            may reasonably be required at the time of the injury and
            thereafter for the length of time set forth in this section,
            or as may be required for the cure and treatment of an
            occupational disease.

            ....

            (4) In the absence of designation of a managed health
            care system by the employer, the employee may select
            medical providers to treat his injury or occupational
            disease. Even if the employer has designated a managed
            health care system, the injured employee may elect to
            continue treating with a physician who provided
            emergency medical care or treatment to the employee.
            The employer, insurer, or payment obligor acting on
            behalf of the employer, shall make all payments for
            services rendered to an employee directly to the provider
            of the services within thirty (30) days of receipt of a
            statement for services. The commissioner shall
            promulgate administrative regulations establishing
            conditions under which the thirty (30) day period for
            payment may be tolled. The provider of medical services
            shall submit the statement for services within forty-five
            (45) days of the day treatment is initiated and every
            forty-five (45) days thereafter, if appropriate, as long as
            medical services are rendered. Except as provided in
            subsection (7) of this section, in no event shall a medical
            fee exceed the limitations of an adopted medical fee
            schedule or other limitations contained in KRS 342.035,
            whichever is lower. The commissioner may promulgate
            administrative regulations establishing the form and

                                       -11-
             content of a statement for services and procedures by
             which disputes relative to the necessity, effectiveness,
             frequency, and cost of services may be resolved.

             P & P points to the mandatory language in KRS 342.020(4) which

requires that “[t]he provider of medical services shall submit the statement for

services within forty-five (45) days of the day treatment is initiated and every

forty-five (45) days thereafter, if appropriate, as long as medical services are

rendered.” This unambiguous language, P & P argues, does not contain any

indication that the 45-day rule is limited to only post-award submissions. Rather,

the date of treatment is the determinative question, and it is this date that triggers

the start of the 45-day period for a provider to submit its completed statement of

services. In holding that a provider has 45 days from the date of an award to

present statements of services, the Board rewrote the statutory provision. This, P

& P goes on to argue, constitutes error. In addition, P & P argues that the Board

improperly ignored the word “shall” in the statutory language. Accordingly, P & P

asserts that this rule should apply in the present case and that it should not be liable

for the payment of the billing statements at issue.

             For the reasons set forth in P & P’s petition for review, we agree. The

unambiguous language of the statute requires a provider to submit billing

statements within 45 days after treatment has been initiated; there is no language in

the statute that limits the application of the 45-day rule to post-award submissions.

                                          -12-
             Both the ALJ and the Board relied upon the Supreme Court of

Kentucky’s opinion in R.J. Corman, supra, to hold that the 45-day time limit for a

provider to submit billing statements only applies post-award. However, as set

forth below, the R.J. Corman Court was addressing the portion of the statute

requiring an employer to pay medical benefits within 30 days of receipt of a billing

statement and the proper time to contest same, not the portion requiring a provider

to submit these billing statements within 45 days of the initiation of treatment.

                    The amendment to KRS 342.020(1) requiring the
             payment of medical benefits in 30 days is clearly
             intended to hasten payment of those medical bills that the
             employer is obligated to pay. Until an award has been
             rendered, the employer is under no obligation to pay any
             compensation, and all issues, including medical benefits,
             are justiciable. Therefore, we believe that KRS 342.020,
             which addresses additional compensation for injuries,
             which must be determined to be work-related per KRS
             342.0011(1) to be compensable, applies to medical
             statements received by an employer after an ALJ has
             determined that said bills are owed by the employer.
             Likewise, the rules enunciated in [Westvaco Corp. v.
             Fondaw, 698 S.W.2d 837 (Ky. 1985),] and [Phillip
             Morris, Inc. v. Poynter, 786 S.W.2d 124 (Ky. App.
             1990)], only apply post-award.

                    From a practical standpoint, pre-award application
             of the 30-day rule to either pay or contest medical costs is
             an exercise in futility and simply adds another step to the
             process. In essence, the rule requires employers to file a
             motion to contest in order to preserve the issue for
             consideration at the hearing. The ALJ would hardly be
             able to rule on the motion before considering the merits
             of the claim and determining whether claimant is entitled
             to any compensation. Therefore, the motion to contest

                                         -13-
             would necessarily be held in abeyance, with no real
             benefit derived from the extra procedural step.

                    We have been offered no logical reason why
             Westvaco and Poynter should apply to medical bills
             submitted to an employer during the litigation of a claim.
             Without a sound basis for extending the rule further, we
             reverse the Court of Appeals’ affirmance of the Board on
             this point. The proper time to contest issues involved in
             a workers’ compensation claim, including whether
             certain medical treatment should be at the expense of the
             employer, is at the hearing before the ALJ.

R.J. Corman, 864 S.W.2d at 918-19. We agree with P & P that the Board

improperly extended this holding in the present case. As P & P points out, strict

enforcement of the 30-day payment rule prior to an award would violate due

process where the employer denied the claim. That is not the case here, as the

portion of the statute at issue addresses treatment providers, not employers.

             P & P also disputes the Board’s reliance upon the Supreme Court of

Kentucky’s recent decision in Wonderfoil, supra. In Wonderfoil, the Supreme

Court addressed the time limit for an employee/claimant to submit medical bills to

the employer for repayment as set forth in 803 KAR 25:096 § 11(2), which states:

             Expenses incurred by an employee for access to
             compensable medical treatment for a work injury or
             occupational disease, including reasonable travel
             expenses, out-of-pocket payment for prescription
             medication, and similar items shall be submitted to the
             employer or its medical payment obligor within sixty
             (60) days of incurring of the expense. A request for
             payment shall be made on a Form 114.

                                        -14-
Again, this regulation does not address the portion of KRS 342.020(4) requiring a

provider (not a claimant) to submit medical billing statements within 45 days of the

initiation of service. And the Wonderfoil Court did not address that portion of the

statute, either, as it was limited to consideration of several administrative

regulations. Therefore, neither R.J. Corman nor Wonderfoil provide support for

the Board’s holding that the 45-day requirement for a provider to submit medical

billing statements only applies post-award.

             Accordingly, we hold that the Board misconstrued the controlling

statute and precedent and therefore erred as a matter of law in holding that the 45-

day requirement for providers to submit billing statements applied only post-

award. The plain and mandatory language of the statute does not contain anything

that limits the application of the 45-day rule to post-award situations. Therefore,

we hold that this requirement applies both pre- and post-award. In addition, this

interpretation of KRS 342.020(4) will not harm the claimant, as “[t]he medical

provider shall not bill a patient for services which have been denied by the

payment obligor for failure to submit bills following treatment within forty-five

(45) days as required by KRS 342.020 and Section 6 of this administrative

regulation.” 803 KAR 25:096 § 10(3).

             For the forgoing reasons, the opinion of the Workers’ Compensation

Board affirming the decision of the Administrative Law Judge determining that P

                                         -15-
& P was responsible for payment of the billing statements submitted outside of the

45-day period is reversed, and this matter is remanded with directions that the

Board reverse the ALJ’s decision as to the billing statements at issue because they

were submitted outside of the 45-day period.

             ALL CONCUR.

BRIEF FOR APPELLANT:                      NO BRIEF FOR APPELLEES.

W. Barry Lewis
Hazard, Kentucky

                                        -16-