Court Opinion

ID: 1065195
Source: CourtListenerOpinion
Date Created: 2013-10-09 19:20:04.374397+00
Date Added: 2024-06-11T15:07:10.373368
License: Public Domain

COURT OF APPEALS OF VIRGINIA

Present: Judges Humphreys, Clements and Senior Judge Coleman
Argued at Richmond, Virginia

STEPHEN J. LEIBOVIC, M.D.
                                               OPINION BY
v.   Record No. 0790-00-2               JUDGE ROBERT J. HUMPHREYS
                                              MARCH 6, 2001
SAN JUANITO MELCHOR, TRUSSWAY, LTD.
 AND LIBERTY MUTUAL INSURANCE CORPORATION

         FROM THE VIRGINIA WORKERS' COMPENSATION COMMISSION

           S. Vernon Priddy, III (Daniel L. Rosenthal;
           Law Office of Daniel L. Rosenthal, on brief),
           for appellant.

           Roger L. Williams (John T. Cornett, Jr.;
           Williams & Lynch, on brief), for appellees
           Trussway, Ltd. and Liberty Mutual Insurance
           Corporation.

           No brief for appellee San Juanito Melchor.

     Dr. Stephen J. Leibovic appeals a decision of the Workers'

Compensation Commission, holding that he was not entitled to

additional compensation for medical services provided pursuant

to a contract between himself and First Health Group Corporation

("First Health").   Specifically, Dr. Leibovic argues that the

commission erred in finding that Code § 65.2-605 is not a "rule"

or "guideline" for the payment of workers' compensation

healthcare services. 1

     1
           "All questions arising under [the Workers'
           Compensation Act ('the Act')] . . . shall be
           determined by the Commission . . . ." Code
     On August 6, 1996, San Juanito Melchor, an employee of

Trussway, Ltd., severed his left index finger and thumb in an

industrial accident.   This claim was accepted as compensable by

Trussway.   On April 28, 1996, pursuant to an agreement of the

parties, an award was entered for medical benefits and

compensation.

     On October 28, 1998, Dr. Leibovic filed the claim at issue

seeking payment for services rendered to Melchor.   Dr. Leibovic

had charged $22,993 for four surgeries performed on Melchor.

However, First Health paid Dr. Leibovic only $10,228.86 for

these services.

     First Health is a national health benefits service company.

It operates a preferred provider organization that contracts

with private physicians and other healthcare providers.

Pursuant to these contracts, the physicians and medical

providers agree to accept certain rates for medical services

rendered to workers' compensation claimants when the insurer is

one of First Health's clients.    In this case, Liberty Mutual

            § 65.2-700. This grant of subject matter
            jurisdiction includes the authority of the
            commission to enforce its orders and to
            resolve coverage and payment disputes. Code
            § 65.2-714(A) provides the commission
            exclusive jurisdiction over all disputes
            concerning payment of the fees or charges of
            physicians and hospitals.

Combustion Engineering, Inc. v. Lafon, 22 Va. App. 235, 237, 468
S.E.2d 698, 699 (1996) (citation omitted).

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Insurance Corporation ("Liberty Mutual"), the carrier for

Trussway, was one of First Health's clients.   Liberty Mutual had

contracted with First Health to use its PPO network to treat

workers' compensation claimants.    Based on this relationship,

Dr. Leibovic claims that Liberty Mutual is responsible for the

additional charges.   Liberty Mutual contends that pursuant to

the contract between First Health and Dr. Liebovic, Dr. Liebovic

is entitled to no additional payment.

     Appendix A, Section D of the contract between First Health

and Dr. Liebovic provides a method for determining payment for

medical services as follows: 2

          Reimbursement from Workers' Compensation
          Payors for services rendered to
          occupationally ill/injured employees shall
          be as follows:

          (1) If any state law or regulation
          establishes rules or guidelines for the
          payment of health care services,
          reimbursement shall not exceed 80% of the
          maximum amount payable under such rules or
          guidelines. This rate of reimbursement
          shall apply whether such rules or guidelines
          are in existence at the time of execution of
          this agreement or established at a later
          time.

          (2) In absence of any state law or
          regulation set forth in Section D, Paragraph
          (1), reimbursement shall be the method set
          forth in section A, Paragraphs (1), (2) and
          (3) of this appendix, but in no event shall
          the reimbursement exceed the usual and

     2
       The contract at issue was actually executed between Dr.
Leibovic and Affordable Health Care Concepts. First Health is
the successor in interest to Affordable Health Care Concepts.

                                 - 3 -
          customary charge for services, as determined
          by AFFORDABLE or Payor.

Dr. Liebovic argues that Paragraph D(1) controls and that he is

entitled to 80% of the charges for the surgeries.   Liberty

Mutual argues that Paragraph D(2) controls.   The commission

agreed with Liberty Mutual, finding that Code § 65.2-605 is "not

[a rule or guideline] for payment of healthcare services within

the meaning of the contract."   We agree with the commission.

     Code § 65.2-605 provides as follows:

          The pecuniary liability of the employer for
          medical, surgical, and hospital service
          herein required when ordered by the
          Commission shall be limited to such charges
          as prevail in the same community for similar
          treatment when such treatment is paid for by
          the injured person and the employer shall
          not be liable in damages for malpractice by
          a physician or surgeon furnished by him
          pursuant to the provisions of § 65.2-603,
          but the consequences of any such malpractice
          shall be deemed part of the injury resulting
          from the accident and shall be compensated
          for as such.

     Dr. Liebovic misunderstands the holding of the commission.

He asserts the commission held that Code § 65.2-605 was not a

rule or guideline.   However, the commission merely determined

that this particular statute was not a "rule or guideline" as

contemplated by the contract section at issue.   As the

commission noted, Code § 65.2-605 establishes a standard that is

often called the prevailing community rate.   It provides a

mechanism for resolving disputes over medical charges.    However,

the statute does not establish a minimum charge or schedule of

                                - 4 -
fees, nor does it prohibit medical care providers from entering

into agreements for fee reimbursement in workers' compensation

cases.   See Cousar v. Peoples Drug Store, 26 Va. App. 740, 743,

496 S.E.2d 670, 672 (1998) ("As a general rule, the construction

afforded a statute by the public officials charged with its

administration and enforcement is entitled to be given weight by

a court.")

     We agree that the statute at issue does not fall within the

purview of the contract between Dr. Liebovic and First Health,

because it does not establish a rule or guideline for the

"payment" of healthcare services.   Accordingly, we affirm the

commission's decision in this regard.

                                                         Affirmed.

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