OPINION ENTERED: February 11, 2010
CLAIM NO. 90-33559
McDONALD'S PETITIONER
VS. APPEAL FROM HON. LAWRENCE F. SMITH,
ADMINISTRATIVE LAW JUDGE
DEBRA PETTY,
CARY L. TWYMAN, M.D.,
and HON. LAWRENCE F. SMITH,
ADMINISTRATIVE LAW JUDGE RESPONDENTS
OPINION
AFFIRMING IN PART,
REVERSING IN PART,
AND REMANDING
* * * * * *
BEFORE: ALVEY, Chairman; COWDEN and STIVERS, Members.
ALVEY, Chairman. McDonald’s appeals and Debra Petty (“Petty”) cross-appeals from an order issued October 2, 2009, by Hon. Lawrence F. Smith, Administrative Law Judge (“ALJ”), dismissing the post-award medical disputes and motion to reopen to contest medical treatment filed by McDonald’s in November and December 2008. As part of the same order, the ALJ denied Petty’s request for sanctions. Neither party filed a petition for reconsideration prior to this appeal.
On appeal, McDonald’s argues the ALJ erred in summarily denying its December 1, 2008 motion to reopen challenging Petty’s medical treatment. McDonald’s asserts the ALJ in the October 2, 2009 order improperly failed to address the specific matters in dispute set forth in its motion, or to properly address the merits of the medical dispute. On cross-appeal, Petty counters that the ALJ acted properly in light of an earlier ruling by this Board concerning a 2007 medical dispute filed by McDonald’s, based on the same medical evidence, wherein the Board directed the ALJ to dismiss. In addition, Petty characterizes the current proceedings as frivolous, and argues that costs and attorney fees should be assessed against McDonald’s pursuant to KRS 342.310(1). We affirm in part, reverse in part and remand.
On August 30, 1990, Petty slipped on a wet floor at McDonald’s injuring her low back, neck, left arm, both legs, and right hand. In December 1990, she came under the care of Dr. Cary Twyman, who has regularly treated her since that time for her work-related complaints. On December 1, 1992, Petty filed a workers’ compensation claim seeking permanent disability benefits due to her physical injuries. Petty did not allege a psychiatric or psychological condition secondary to her physical injuries at the time of the original proceedings.
In an opinion and award rendered September 2, 1993, ALJ Irene Steen determined that Petty had sustained a 50% occupational disability as a result of her work-related injuries at McDonald’s. As part of that decision, ALJ Steen granted Petty an award of medical benefits pursuant to KRS 342.020, “as may reasonably be required at the time of the injuries and thereafter during disability.”
On August 8, 1994, Petty filed a motion to reopen alleging entitlement to permanent total disability due to the affects of the physical injuries asserted at the time of the original proceedings. Petty again did not allege a psychiatric or psychological condition secondary to those injuries. By order issued May 17, 1997 by ALJ James L. Kerr, Petty’s motion to reopen was denied.
On March 28, 2007, McDonald’s filed a medical dispute and motion to reopen seeking to be relieved of all liability for the future medical care on behalf of Petty. As grounds, McDonald’s asserted that any ongoing medical treatment being received by Petty was no longer “directly related” to the affects of the injury of August 30, 1990, but rather was the result of non-work-related emotional factors and the normal aging process that had transpired since the time of the original award. No specific bills, charges, or statements for medical services incurred or specific treatment proposed were identified by McDonald’s as being challenged. In support of its post-award reopening, McDonald’s submitted the medical reports of Dr. Timothy C. Kriss dated January 8, 2007, and Dr. Douglas D. Ruth dated January 29, 2007, and the utilization review report of Dr. Gerald Goldberg dated March 19, 2007.
In a decision rendered November 26, 2007, ALJ Smith decided in McDonald’s favor. In so ruling, ALJ Smith framed the issue before him as whether Petty continued to be disabled from the affects of her work-related injury and, therefore, entitled to ongoing medical treatment under the Act. Citing to Dr. Kriss’ opinions to the contrary, ALJ Smith determined that McDonald’s would “no longer be required to pay for the medical and psychological treatment of Dr. Twyman . . . or for prescribed medications.”
In response to the ALJ’s ruling, Petty appealed to this Board. In an opinion rendered September 13, 2008, the Board reversed the ALJ’s decision, reasoning as follows:
A reading of McDonald’s motion to reopen/medical fee dispute and supplemental medical fee dispute reflect in actuality, no statements, services or specific treatment have been put in dispute.
803 KAR 25:012 Sect. (1)(1) provides as follows as it applies to this issue:
A dispute regarding payment, non-payment, reasonableness, necessity, or work-relatedness of a medical expense, treatment, procedure, statement, or service which has been rendered or will be rendered under KRS 342 shall be resolved by the Administrative Law Judge following the filing of a Form 112 (medical fee dispute)
803 KAR 25:012 Sect. 3(a)4(b) provides as follows:
A single Form 112 may encompass statements, services or treatment previously rendered as well as future statements, services, or treatment of the same nature or for the same condition if specifically stated. (Emphasis added)
In this medical fee dispute, no disputed bills have been attached, nor does the Form 112 contain any future statements, services or specific treatment that are being contested. It merely contests all prospective treatment on the ground that Petty’s disability has changed from being work-related to now non work-related. The ALJ even recognized this fact when he stated in his opinion and order on reopening the following:
. . . The question before this Administrative Law Judge is whether or not the respondent continues to be disabled from her slip and fall on August 30, 1990. . .
It should be pointed out, however, the opinion and award of September 21, 1993 has already established that the August 31, 1990 injury produced an occupational disability of 50%. This judicial finding rendered by the ALJ in her opinion is res judicata and cannot be revisited at this point absent a timely motion to reopen alleging a change of disability. See Hysteam Coal Co. v. Ingram, 283 Ky. 411, 141 S.W.2d 570 (1940).
KRS 342.125(3) states as follows as it applies to this issue:
Except for reopening solely for the determination of the compensability of medical expenses, fraud or conforming the award as set forth in KRS 342.730(1)(c)(2), or for reducing a permanent total disability award when an employee returns to work, or seeking temporary total disability benefits during the period of an award, no claim shall be reopened more than four (4) years following the date of the original award or order granting or denying benefits, and no party may file a motion to reopen within one (1) year of any previous motion to reopen by the same party. (Emphasis added)
KRS 342.125(8) provides as follows:
The time limitation prescribed in this section shall apply to all claims irrespective of when they were incurred or when the award was entered, or the settlement approved. However, claims decided prior to December 12, 1996, may be reopened within four (4) years of the award or order or within four (4) years of December 12, 1996, whichever is later, provided that the exceptions to reopening established in subsections 1 and 3 of this section shall apply to those claims as well.
In this case, the ALJ entered her award on September 2, 1993. Pursuant to the above statutes, McDonald’s had to and including December 12, 2000 in which to file a motion to reopen based on a change of condition. Because the motion to reopen was filed on March 28, 2007, it is now time-barred. See also Nygaard v. Goodin Brothers, 107 S.W.3d 190 (Ky. 2003). To this extent, the ALJ is directed to deny McDonald’s motion to reopen/medical fee dispute.
This Board’s holding should not be interpreted as preventing McDonald’s with a means by which it can contest specific medical expenses incurred in the future on work-relatedness or reasonableness grounds. As provided for in F.E.I. Installation, Inc. vs. Williams, supra, under 803 KAR 25:012, Mitee Enterprises vs. Yates, 865 S.W.2d 654 (Ky. 1993); National Pizza Company vs. Curry, 802 S.W.2d 949 (Ky. App. 1991), an employer is free to move to reopen an award to contest the reasonableness and necessity of any specific medical treatment and also whether the need for treatment is due to the effects of the injury by following the mandate expressed in 803 KAR 25:012 Sect. 1 and 803 KAR 25:010 Sect. 4 (6).
Thereafter, neither party sought additional review by the Court of Appeals, and the case was remanded for further proceedings consistent with the Board’s opinion. By order issued November 17, 2008, ALJ Smith dismissed McDonald’s’ 2007 reopening as time barred pursuant to the Board’s directives.
Four days later, on November 21, 2008, McDonald’s filed another medical dispute, this time specifically contesting a November 3, 2008 request for preauthorization for TENS unit supplies. In the Form 112, McDonald’s stated it was denying liability for the supplies as not work-related based on the January 8, 2007 medical report from Dr. Kriss, previously submitted as evidence during the 2007 reopening.
On December 1, 2008, McDonald’s filed a supplemental medical dispute and motion to reopen contesting various medication charges from Rite Aid Pharmacy (“Rite Aid”) prescribed by Dr. Twyman totaling $1,618.66; statements for medical treatment from Dr. Twyman dated January 17, 2008, May 30, 2008 and October 31, 2008; all treatment for depression and anxiety including the prescription Zoloft; and “all prospective care for [Petty’s] neck, low back and psychiatric conditions on the grounds that the treatment is unrelated to the original work injury of August 30, 1990.” As grounds, McDonald’s asserted that the requests for payment were untimely, and the treatment sought was either barred by the statute of limitations or not work-related as demonstrated by the 2007 medical reports from Drs. Kriss, Ruth and Goldman, which were attached as exhibits.
In response, Petty filed numerous objections arguing the matters at issue in McDonald’s latest round of medical disputes were essentially identical to those previously judicially resolved by the earlier decision and orders of ALJ Steen and Smith, and the prior opinion by the Board. Petty urged that McDonald’s additional medical disputes be dismissed, and that sanctions be assessed in the form of costs and attorney fees.
On October 2, 2009, ALJ Smith ordered that McDonald’s case on reopening be dismissed. In so ruling, the ALJ in pertinent part reasoned as follows:
[Petty] maintains that the premise for [McDonald’s’] filings . . . are the same arguments previously rejected by the [Workers’ Compensation Board]. [Petty] argues that the Board’s decision in reversing the ALJ’s ruling was final with no appeal and that [McDonald’s] is simply bringing back the same premise for another try.
[Petty] specifically states that Dr. Twyman is treating the same pain pattern that was caused by the [her] work injury, which was judicially determined in 1993 to be the result of [her] work injury. [Petty] argues that after December 12, 2000, neither the ALJ nor the Board has jurisdiction to rule that the same pattern is now caused by respondent’s age and not her injury, because that would require proof of a change from work-related to non-work related. [Petty] avers that this was the Board’s decision and it became final, and it is now the law of the case. [McDonald’s] contends that its pleadings contained distinguishable issues that merit review.
After much consideration and thought, it is the determination of this ALJ that nothing filed after the Board’s opinion allows the ALJ to override the decision. Accordingly, I find that the petition to re-open must be and is DISMISSED, along with all other motions relating to the same issue.
The ALJ denied Petty’s request that sanctions be imposed against McDonald’s, stating there had been no showing that the proceedings were “brought, prosecuted or defended without reasonable grounds.”
The procedure for reopening a prior workers’ compensation claim pursuant to KRS 342.125 is a two-step process. Colwell v. Dresser Instrument Div., 217 S.W.3d 213, 216 (Ky. 2006). The first step is the prima facie motion, which requires the moving party to provide sufficient information to demonstrate a substantial possibility of success in the event evidence is permitted to be taken. Stambaugh v. Cedar Creek Mining, 488 S.W.2d 681 (Ky. 1972). “Prima facie evidence” is evidence which “if unrebutted or unexplained is sufficient to maintain the proposition, and warrant the conclusion [in] support [of] which it has been introduced ... but it does not shift the general burden ....” Prudential Ins. Co. v. Tuggle’s Adm’r., 254 Ky. 814, 72 S.W.2d 440, 443 (1934). The burden during the initial step remains on the moving party and requires that party to establish the grounds for which the reopening is sought under either KRS 342.125(1) or (3). Jude v. Cubbage, 251 S.W.2d 584 (Ky. 1952); W.E. Caldwell Co. v. Borders, 301 Ky. 843, 193 S.W.2d 453 (Ky. 1946). Only when and if the moving party prevails with regard to the initial prima facie showing, will further proof be authorized and the merits on reopening adjudicated. Crawford & Co. v. Wright, 284 S.W.3d 136, 140 (Ky. 2009).
The proper procedure for challenging medical expenses is firmly established. The party responsible for paying post-award medical expenses has the burden of contesting a particular expense or procedure by filing a timely motion to reopen and proving it to be non-compensable. Mitee Enterprises v. Yates, 865 S.W.2d 654 (Ky. 1993). Moreover, 803 KAR 25:012, § 6 requires both a motion to reopen and Form 112 to be filed in a post-award medical dispute. Pursuant to subsection (6)(c) of that administrative regulation, the medical dispute “shall” then be either summarily decided upon the pleadings, or assigned for further proof time and final resolution. Conversely, 803 KAR 25:096, § 8(3) plainly provides that a post-award medical dispute is unnecessary where it is apparent that the medical services performed were not for a work-related condition.
Mindful of the above statute and regulation, we believe for the most part ALJ Smith acted properly in dismissing McDonald’s’ motion to reopen at the prima facie stage of the process. McDonald’s, in its December 2008 motion and Form 112, expressly stated it was challenging “prospective care for [Petty’s] neck [and] low back . . . on the grounds that the treatment is unrelated to the original work injury of August 30, 1990.” In support of its challenge, McDonald’s indicated it was relying on the 2007 reports from Drs. Kriss, Ruth, and Goldberg, previously submitted during an earlier reopening concerning the same issue that was ordered dismissed by the Board in its opinion rendered September 13, 2008.
Because the Board’s prior ruling involved the same parties, the same evidence, and the same issue, under the dual doctrines of res judicata and collateral estoppel, we believe the ALJ correctly determined that McDonald’s was prohibited as a matter of law from relitigating the matter for a second time as part its 2008 reopening. Yeoman v. Com., Health Policy Board, 983 S.W.2d 459 (Ky. 1998). Res judicata, or claim preclusion, bars a party from relitigating a previously adjudicated cause of action. Id. at 464. Collateral estoppel, or issue preclusion, bars the parties from relitigating any issue “actually litigated and finally decided in an earlier action.” Id. at 464.
As to the requested preauthorization for TENS unit supplies, and the statements from Dr. Twyman for January 17, 2008, May 30, 2008 and October 31, 2008, McDonald’s submitted no contemporaneous opinion from any medical expert, either by way of treatment records, independent medical evaluation or utilization review, directly addressing the compensability of these charges. In other words, McDonald’s provided absolutely no evidence demonstrating a substantial possibility of success with respect to its challenge to either the work-relatedness or reasonableness and necessity of these charges in the event additional evidence was taken. Stambaugh v. Cedar Creek Mining, supra. Because McDonald’s failed to present the requisite prima facie showing, we find no error concerning ALJ’s ruling with respect to these matters. Crawford & Co. v. Wright, 284 S.W.3d at 140.
Turning to that portion of the motion to reopen challenging the compensability of Dr. Twyman’s charges for treatment of Petty on January 17, 2008 and May 30, 2008, KRS 342.020(1) provides in pertinent part as follows:
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 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. (Emphasis added.)
803 KAR 25:096 § 6, the enabling regulation with regard to the above language and the tendering of statements by medical providers for services rendered, further provides:
If the medical services provider fails to submit a statement for services as required by KRS 342.020(1) without reasonable grounds, the medical bills shall not be compensable. (Emphasis added).
In its motion to reopen, verified as accurate by an accompanying affidavit, McDonald’s asserted that Twyman’s statement for services rendered on January 17, 2008 and May 30, 2008 was not submitted for payment until October 31, 2008. The statement itself was attached to McDonald’s Form 112. The top left hand corner of that exhibit plainly lists the “original review and receipt date” as being October 31, 2008. The exhibit, therefore, plainly constitutes prima facie evidence which if unrebutted or unexplained is sufficient to maintain the proposition, and warrant the conclusion in support of which it has been introduced, i.e., that the medical bill in question was submitted more than 45 days after the date on which treatment was provided in violation of KRS 342.020(1). What remains to be determined, of course, is whether the same bill had previously been submitted for payment or there is some explanation establishing reasonable grounds for the bills untimely submission. Consequently, the ALJ’s ruling with regard to this aspect of McDonald’s motion to reopen must be reversed. On remand the ALJ is instructed to reopen proof time and allow the taking of evidence on this narrow issue.
Concerning the ALJ’s ruling rejecting McDonald’s dispute pertaining to the charges for prescription medications from Rite Aid, we likewise find no error. The statements from Rite Aid list the charges at issue as being for Atenolol, Prevacid, Methocarbamol, Isometh-D-Chloralphenz, Nabumetone, Trixaicin HP 0.005% cream, and Micardis. With respect to these medications, McDonald’s again submitted no expert opinion in support of its prima facie motion to reopen directly disputing the compensability of these medications. While Dr. Goldman’s report from March 15, 2007, recommends against authorization of any prescriptions for Lortab, Relafen, Zostrix 0.025%-0.075% cream, Mildrin, Robaxin, Lidoderm 5% patches, Klonopin and Protonix, there is no expert indication contained within the prima facie pleadings that those medications are generically the same as the prescriptions filled by Rite Aid. To the extent the charges and prescriptions from Rite Aid were challenged generally in reliance on the 2007 medical reports from Drs. Kriss, Ruth and Dr. Goldberg on the question of Petty’s continuing disability arising from the affects of the 1990 work injury, as previously stated McDonald’s was collaterally estopped from making that argument.
As to any outstanding charges relating to Petty’s ongoing treatment for depression and anxiety, those conditions were not included as part of Petty’s original claim. Moreover, there has never been any action brought under KRS 342.125(1) wherein Petty asserted disability as a result of those ailments, nor a formal determination by an ALJ that those conditions are work-related. Of course, any such assertions by Petty pertaining to those conditions as compensable under the Act are now time barred pursuant to KRS 342.125(8). As a consequence, any exposure to liability McDonald’s may have had relative to Petty’s treatment for anxiety and depression has long expired, and pursuant to 803 KAR 25:096, § 8(3), McDonald’s obligation to maintain a post-award medical dispute prior to denying payment for expenses incurred in the treatment of those diagnoses is unnecessary. McDonald’s is simply not responsible for the treatment of any condition not previously found to be compensable.
As to Petty’s cross-appeal, KRS 342.310(1) is permissive. Therefore, both the ALJ and this Board may exercise discretion when determining whether a particular set of facts warrants the imposition of sanctions. Given this standard, we find no error regarding the ALJ’s refusal to penalize McDonald’s. As to proceedings before this Board, we are equally unconvinced that McDonald’s’ arguments are frivolous and so lacking in merit that an appeal should not have been taken, especially in light of the fact that McDonald’s has been partially successful. Roberts v. Estep, 845 S.W.2d 544 (Ky. 1993). For that reason, we too decline Petty’s invitation to impose sanctions.
Accordingly, the order issued October 2, 2009, by Hon. Lawrence F. Smith, Administrative Law Judge, is hereby AFFIRMED IN PART, REVERSED IN PART and REMANDED for further proceedings consistent with this opinion.
ALL CONCUR.
COUNSEL FOR PETITIONER:
HON. DAVID B. ALLEN
4460 LEXINGTON ROAD
VERSAILLES, KY 40383
COUNSEL FOR REPSONDENT:
HON. JO ALICE VAN NAGELL
333 WEST VINE STEEET
SUITE 1100
LEXINGTON, KY 40507
COUNSEL FOR CROSS-RESPONDENT:
HON. LORI DANIEL
3151 BEAUMONT CENTER CIRCLE
SUITE 200
LEXINGTON, KY 40513
ADMINISTRATIVE LAW JUDGE:
HON. LAWRENCE F. SMITH
410 WEST CHESTNUT STREET
7TH FLOOR
LOUISVILLE, KY 40202
RESPONDENT:
CARY L. TWYMAN, M.D.
1021 MAJESTIC DR
SUITE 200
LEXINGTON, KY 40513
