Court Opinion

ID: 9685874
Source: CourtListenerOpinion
Date Created: 2023-08-24 15:07:51.557126+00
Date Added: 2024-06-11T09:19:12.804584
License: Public Domain

RENDERED: AUGUST 24, 2023
                                                             TO BE PUBLISHED

                Supreme Court of Kentucky
                                  2022-SC-0350-WC

DANIEL FARLEY                                                              APPELLANT

                   ON APPEAL FROM COURT OF APPEALS
V.                          NO. 2022-CA-0332
                 WORKERS’ COMPENSATION NO. WC-17-83257

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

              OPINION OF THE COURT BY JUSTICE THOMPSON

                                     AFFIRMING

         This appeal concerns whether the Court of Appeals erred in ruling that

P&P Construction Inc. (P&P), and by extension its insurer Kentucky Employers

Mutual Insurance (KEMI), was not responsible for payment of medical billing

statements submitted outside of the 45-day period set forth in Kentucky

Revised Statute (KRS) 342.020(4).1 That opinion reversed the opinion of the

      1 The statutory language at issue in KRS 342.020 was contained in subsection

(1) at the time of Farley’s injury; however, as of July 13, 2018, this subsection was
renumbered as subsection (4). To avoid confusion, we will consistently refer to it by its
current designation, KRS 342.020(4).
Workers’ Compensation Board (the Board) affirming the Administrative Law

Judge’s (ALJ) determination that medical providers did not have to submit their

billings until after a determination of liability. Farley now appeals to this Court

as a matter of right. See Vessels v. Brown-Forman Distillers Corp., 793 S.W.2d

795, 798 (Ky. 1990); Ky. Const, § 115

      In accord with published precedent, employers and their insurance

carriers are not responsible for the payment of medicals—that have been

contested and/or which have not yet (pre-award) been adjudged to be work-

related or medically necessary—until such time as a determination of necessity

or liability has rendered.

      However, medical providers have no such right to delay tendering their

billings. We agree with the Court of Appeals that pursuant to the unambiguous

language of KRS 342.020(4), medical providers are required to submit their

billings within 45-days of service, regardless of whether a determination of

liability has been made, and employers and their insurance carriers are not

responsible for payment of billings submitted to them after the 45-day period.

The statute is unambiguous. Accordingly, we affirm.

                    I. FACTUAL AND PROCEDURAL HISTORY

      On May 8, 2017, Daniel Farley was injured while working as a section

foreman for P&P when an air hose for a mine pump exploded causing a

segmental left tibial shaft fracture and fibula fracture to his left leg. Farley

underwent three surgeries to repair these fractures.

                                          2
      Farley’s injury was indisputably work-related and KEMI, P&P’s worker’s

compensation carrier, accepted the claim and began paying temporary total

disability (TTD) benefits and—with certain exceptions—paying Farley’s medical

expenses.

      In 2018 Farley sought treatment at ARH Daniel Boone Clinic (ARH) for

“post-traumatic stress disorder and mood disorder.” He saw a clinician at ARH

on five occasions in 2018 (January 3rd, March 1st, May 1st, July 10th, and

October 10th). The record shows billings for $123.00 per appointment for a

total of $615.00. KEMI did not receive a billing for any of these appointments

prior to December 12, 2018. Since each of the billings were for services

rendered more than 45 days earlier, KEMI rejected them pursuant to KRS

342.020(4) which states, “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.”

      KEMI also rejected billings totaling $128.00 from Harlan ARH

Hospital/Gram Resources (Gram Resources) for imaging services performed on

May 8, 2017, which were not received by KEMI until September 6, 2018.

      In February 2019, Farley filed his initial workers’ compensation claim

alleging entitlement to benefits for injuries to his left leg, left hip and his lower

back. The next day Farley filed a second claim asserting entitlement to benefits

for post-traumatic stress disorder (PTSD) resulting from the accident. By that

time, KEMI had paid Farley $71,390.16 in TTD and had paid an additional

                                          3
$107,681.50 for Farley’s medical expenses. Later that year, on October 28,

2019, Farley filed a third claim for “psychological overlay.”

      The parties ultimately negotiated a settlement on August 31, 2020,

which was formally approved by the ALJ on September 1, 2020. The settlement

with P&P and KEMI provided a lump sum payment of $125,000.00 to Farley

with P&P and KEMI only “remain[ing] liable for reasonable, necessary & work-

related medical expenses causally related to the left leg injury.” Farley waived

all claims for psychological injury or related expenses and agreed that “any

provider of medical services is required to submit a statement for services

within forty-five (45) days of the day treatment is initiated and neither the

employer nor its carrier are liability [sic] for untimely medical billing under the

[Workers’ Compensation] Act and regulations.”

      On August 31, 2020, the ALJ also issued a conference order which

recognized the remaining issue of unpaid and contested medical expenses

which stated “[P&P] shall file the contested bills on or before the date of

Hearing.” At that time, the only two bills that KEMI had submitted to the ALJ

for consideration were one regarding Farley being airlifted and another

regarding a future proposed surgery, neither of which is a subject of this

appeal.

      On September 14, 2020, KEMI filed a written motion to amend its Form

112 Medical Fee Dispute filing and to join ARH and Gram Resources, noting

that their billings had been previously denied by KEMI as being untimely

                                         4
pursuant to KRS 342.020(4). Farley did not object to this amendment or the

joinder of ARH and Gram Resources.

      On November 13, 2020, the ALJ issued a decision determining that the

45-day rule in KRS 342.020(4) did not apply until after an award is made in

the claim (i.e. the September 1, 2020 settlement), stating:

      The Defendant disputes treatment billing based on late submission
      of the medical billing based on KRS 342.020[(4)], which requires
      medical service 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 342.020[(4)] 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[(4)] for the payment of bills within 30 days 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.”
      ....

      The Administrative Law Judge finds that the 45 day rule cited by
      the Defendant 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.

(Emphasis added).

      Notably here, no party disputed that Farley had suffered a work-related

injury and P&P had already paid, and never objected to paying, the vast

majority of Farley’s incurred medical bills prior to the settlement.

      P&P appealed the ALJ’s determination to the Board, but the appeal was

held in abeyance while the case of Wonderfoil, Inc. v. Russell, 630 S.W.3d 706

(Ky. 2021), was pending before this Court. After our opinion in Wonderfoil

                                        5
became final in October 2021, P&P pointed out to the Board that this Court

had not addressed whether KRS 342.020(4) applied to medical providers pre-

award, but rather discussed two administrative regulations concerning the

time for claiming expenses and the filing of unpaid medical bills by claimants,

not providers.

      On February 25, 2022, the Workers’ Compensation Board affirmed the

ALJ’s decision adding:

      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 Construction v. Haddix, [864 S.W.2d 915
      (Ky. 1993)] 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.
      ....

      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 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.

      P&P appealed to the Kentucky Court of Appeals arguing that the ALJ and

Board had incorrectly ruled that the 45-day rule for submission of billings by

medical providers only applies post-award and that the holdings in R.J. Corman

                                       6
and Wonderfoil, supra, were not applicable to the statutory duties of the

medical providers.

      The Court of Appeals agreed with P&P writing:

      [W]e 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).

P&P Construction, Inc. v. Farley, 2022-CA-0332-WC, 2022 WL 2898502, at *6

(Ky. App. July 22, 2022) (unpublished).

      The matter now stands before this Court following Farley’s appeal.

Farley argues that that KRS 342.020 should be read to extend the 45-day

deadline for submission of bills until after an award because (i) precedent

supports this interpretation, (ii) this Court had “tacitly approved” of the Board's

ruling in its Wonderfoil decision, and (iii) the Legislature would have amended

KRS 342.020 if it had disagreed with the Board’s long-standing posture on the

question.

                                   II. ANALYSIS

      “Review by this Court of workers’ compensation cases is is de novo.” Ford

Motor Co. v. Jobe, 544 S.W.3d 628, 631 (Ky. 2018).

                                        7
      Whether the 45-day rule for providers to submit statements for services

set forth in KRS 342.020(4) (previously found in KRS 342.020(1)) only applies

post-award is a question of statutory interpretation.

      In construing a statute, it is fundamental that our primary 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 Cnty.

Metro Gov’t, 260 S.W.3d 777, 779 (Ky. 2008). Further, we interpret 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 . . . .” W. Ky. Coal Co. v.

Nall & Bailey, 14 S.W.2d 400, 401-02 (1929). When a statute is unambiguous,

we need not consider extrinsic evidence of legislative intent and public policy.

Cnty. Bd. of Educ. v. S. Pac. Co., 9 S.W.2d 984, 986 (1928).

      The relevant text of KRS 342.020(4) states:

      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.

      There are two distinct time restrictions set forth in this statute. The first

applies to employers and insurers, such as P&P and KEMI, who must pay

medical providers within thirty days of receiving the provider’s billings. This

                                         8
first deadline has been the specific subject of published caselaw while the

second deadline applying to medical providers has only been discussed in

adjunct.

      The time restriction, which concerns us here, is unambiguous and

requires a provider to submit billing statements within 45 days after treatment

has been provided. The mandate to providers is unmistakable in its clarity. The

plain and forthright language of the statute affords no other construction but

that the provider “shall” submit the statement for services within forty-five days

of the day treatment. “In common or ordinary parlance, and in its ordinary

signification, the term ‘shall’ is a word of command and . . . must be given a

compulsory meaning.” Black's Law Dictionary 1233 (5th ed.1979). “Shall means

shall.” Vandertoll v. Commonwealth, 110 S.W.3d 789, 795–96 (Ky. 2003).

      No language in the statute limits the application of this 45-day rule to a

period of time post-award. Rather, the date of treatment is the determinative

factor and is this date that triggers the start of the 45-day period for a provider

to submit its billing to the employer or insurer. In holding that a provider has

45 days from the date of an award to deliver its billings to an employer, the

Board has impermissibly rewritten an unambiguous statutory provision. With

that being said, the Board asserted reliance on precedent for its determination

which we will next examine.

      In R.J. Corman, 864 S.W.2d at 915, the billings at issue were submitted

to the employer between two and six months before an award was entered. The

employer believed that the proper time to challenge payment was at the hearing

                                         9
before the ALJ. However, that hearing was more than thirty days after the bills

had been received. The Board determined the employer should have challenged

payment by motion prior to the expiration of thirty days, which would also have

been prior to the hearing before the ALJ and thus before an award of medical

benefits had ever been made. We reversed and determined that the

requirement of KRS 342.020 for employers to make payment for medical bills

within thirty days of receipt only “applies to medical statements received by an

employer after an ALJ has determined that said bills are owed by the employer

(emphasis added).” Id. 918. That was, and remains, an entirely logical

conclusion. An employer should not be compelled to make payments on behalf

of an employee when his or her entitlement to benefits is contested or

otherwise still at issue requiring adjudication.

      We made our determination because “[t]he 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” and that “[u]ntil an award has been rendered, the employer is

under no obligation to pay any compensation, and all issues, including medical

benefits, are justiciable.” Id. at 918.

      Simply put, when an employer properly contests an employee’s right to

compensation, the employer cannot be expected to pay medical claims before

an ALJ determines it is liable. Strict enforcement of the 30-day payment rule

against an employer, prior to an award being determined, would violate due

process. In R.J. Corman, this Court addressed the portion of the statute

                                          10
requiring an employer to pay medical benefits, not the second part requiring a

provider to submit these billing statements within 45 days of the of treatment

which is a wholly different circumstance.

      Subsequently, the Board made a determination in Brown Pallet. In that

case, the Board extended this Court’s ruling in R.J. Corman to include the

portion of KRS 342.020(4) that requires a medical provider to submit

statements for services within forty-five days of the day treatment is provided.

The Board decided “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.” Brown Pallet, Claim No. 2003-69633. That

particular Board determination was not appealed and is of no precedential

value to this Court. However, the Board relied upon its decision in Brown Pallet

to justify its decision in the case now before us.

      To the extent that Farley argues that the legislature’s failure to amend

KRS 342.020 denotes approval of this interpretation of the statute, we stated in

Shawnee Telecom Res., Inc. v. Brown, 354 S.W.3d 542, 560 (Ky. 2011), that

“legislative inaction is a weak reed upon which to lean, and a poor beacon to

follow in construing a statute.” We believe this observation to be even more apt

when it comes to instances of administrative bodies (mis)construing a statute,

in a way it has never before been, within an unpublished administrative

decision.

      Next, in Wonderfoil, 630 S.W.3d at 706, the employer admitted that the

employee’s injury was compensable; however, it argued that the ALJ should

                                        11
not order it to compensate the employee for past medical expenses that the

employee (not a medical service provider as is the case here) had not submitted

in accordance with 803 KAR 25:096 § 11(2).2 The ALJ agreed with Wonderfoil

but the Board reversed holding that the submission requirements apply only

after an interlocutory decision or final award has been entered by the ALJ. We

affirmed the Board’s determination after first examining 803 KAR 25:096 §

11(2)’s requirement that “[e]xpenses incurred by an employee for access to

compensable medical treatment . . . shall be submitted to the employer or its

medical payment obligor within sixty (60) days of incurring of the expense”

utilizing a specific form within the claims process and determining that the

regulation was ambiguous because it was impossible to tell from the context

whether it “applies only post-award, during litigation but pre-award, or even

before the potential claimant files his claim.” Wonderfoil, 630 S.W.3d at 710.

      Only subsequent to the initial determination of ambiguity, did we then

examine the regulation in the context of the broader scheme established by the

Department of Workers’ Compensation’s administrative regulations. In so

doing, this Court noted that other regulations required an employee to disclose

      2 This regulation provides:

      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.

803 KAR 25:096 § 11(2) (emphasis added).
                                         12
and submit unpaid medical expenses prior to final adjudication by the ALJ and

stated that “[o]ur interpretation of 803 KAR 25:096, § 11(2) is a natural and

logical extension of R.J. Corman and Brown Pallet, despite Brown Pallet’s lack

of precedential value to this Court.” Id. at 712.

      We concluded:

      [O]ur interpretation does not offend due process by creating unfair
      surprise to employers, despite arguments made otherwise to this
      Court. Even under our interpretation of 803 KAR 25:096, § 11(2), a
      claimant is still required to submit medical expenses they wish to
      have paid pursuant to 803 KAR 25:010, §§ 7 and 13. Those
      medical expenses must be included in the claimant's notice of
      disclosure that must be filed within forty-five days of the issuance
      of the Notice of Filing of Application. 803 KAR 25:010, § 7(2)(e)7.

      The claimant is then under a continuing obligation to turn over
      new medical expenses within ten days of receiving those expenses
      pursuant to 803 KAR 25:010, § 7(2)(f). Further, a claimant is
      required to bring copies of unpaid medical bills and expenses to
      the benefit review conference. 803 KAR 25:010, § 13(9)(a). If he or
      she fails to do so and does not show good cause, such failure “may
      constitute a waiver to claim payment for those bills.” Id. These
      requirements prevent employers from being unfairly surprised by
      requested medical expenses and provide a mechanism by which
      claimants may be penalized for failure to comply.

Id. at 713.

      Therefore, in Wonderfoil we only addressed the time limits for employees

to submit medical bills to the employer for repayment as set forth in 803 KAR

25:096 § 11(2). Neither that regulation, nor this Court, addressed the statutory

language of KRS 342.020(4) requiring medical service providers to submit

billing statements within 45 days of service.

      Neither R.J. Corman nor Wonderfoil provides support for the Board’s

ruling that the 45-day requirement for a provider to submit medical billing

                                        13
statements only applies post-award. Accordingly, we agree with the decision of

the Court of Appeals 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.

      To permit some, if not all, medical providers to withhold their billings for

indefinite periods of time from consideration and payment by the employer, its

insurer, the ALJ, and even their patients, would upend the statutory and

regulatory framework of our workers’ compensation adjudicatory process, the

billing processes for providers, and the adjustment processes for obligors. Such

delays are contrary to the fundamental purposes of the Workers’ Compensation

Act, one of which is the prompt resolution of workers’ compensation claims.

See Searcy v. Three Point Coal Co., 280 Ky. 683, 134 S.W.2d 228 (1939). Such

indefinite delays, if allowed, would also undermine the ability of obligors and

claimants to effectively assess, and then fairly settle, their claims in a timely

and cost-effective manner as occurred in this case.

      Arguments by either the Board or providers regarding the narrow

timeframe of the 45-day window for the submission of medical billings must be

made to the legislature as its province is to draft and, if necessary, amend our

Commonwealth’s statutes. This Court interprets our statutes, it cannot rewrite

them. As stated in University of Louisville v. Rothstein, 532 S.W.3d 644, 648

(Ky. 2017):

      We hold fast to the rule of construction that the plain meaning of
      the statutory language is presumed to be what the legislature
      intended, and if the meaning is plain, then the court cannot base
      its interpretation on any other method or source. In other words,
                                        14
      we assume that the Legislature meant exactly what it said, and
      said exactly what it meant.

(internal alterations, citations, and quotation marks omitted).

      KRS 342.020(4) is unambiguous, and its plain language does not contain

anything that limits the application of the 45-day rule to after an award

determination has been made.

      This opinion however does not address the applicability or potential

implementation of 803 KAR 25:096 § 6 which states, “Tender of Statement for

Services. If the medical services provider fails to submit a statement for

services as required by KRS 342.020(4) without reasonable grounds, the

medical bills shall not be compensable.” (Emphasis added).

      In this matter, neither ARH nor Gram Resources appeared or submitted

any responses to the ALJ, the Board, the Court of Appeals or this Court despite

being served. The record contains no grounds whatsoever for their delays in

transmitting billings to the P&P or KEMI.

      Lastly, we note, as did the Court of Appeals, that this interpretation of

KRS 342.020(4) will not harm Farley 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).

                                        15
                                 III. Conclusion

      For these reasons, we conclude that the requirements of KRS 342.020(4)

clearly mandate that medical service providers submit their billings within 45

days of treatment and such requirement applies both pre- and post-award.

      We affirm the Court of Appeals decision which reversed the opinion of the

Workers’ Compensation Board affirming the decision of the ALJ who had

determined that P&P was responsible for payment of the billing statements

submitted outside of the 45-day period.

      This matter is remanded with directions that the Board reverse the ALJ's

decision as to the billing statements submitted by ARH and Gram Resources

because they were submitted outside of the 45-day period.

      All sitting. All concur.

                                       16
COUNSEL FOR APPELLANT:

Jeffery A. Roberts
Roberts Law Office

Edmond Collett
Edmond Collett, PSC

COUNSEL FOR APPELLEE:

W. Barry Lewis
Lewis and Lewis Law Offices

ADMINISTRATIVE LAW JUDGE:

Hon. Peter Greg Naake

WORKERS’ COMPENSATION BOARD:

Michael Wayne Alvey
Chairman

AMICUS CURIAE COUNSEL FOR
KENTUCKY WORKERS ASSOCIATION:

Eric M. Lamb

                               17