The opinion
STATE OF LOUISIANA
COURT OF APPEAL, THIRD CIRCUIT
05-952
BEUTLER ENGLAND CLINIC (CHERYL BROWN)
VERSUS
MARKET BASKET NO. 27
**********
APPEAL FROM THE
OFFICE OF WORKERS’ COMPENSATION - DISTRICT 3
PARISH OF CALCASIEU, NO. 04-03236
SAM L. LOWERY, WORKERS’ COMPENSATION JUDGE
**********
MARC T. AMY
JUDGE
**********
Court composed of Jimmie C. Peters, Marc T. Amy, and Elizabeth A. Pickett, Judges.
AFFIRMED.
PETERS, J., dissents and assigns written reasons.
Thomas A. Filo
Cox, Cox, Filo, Camel & Wilson, L.L.P.
723 Broad Street
Lake Charles, LA 70601
(337) 436-6611
COUNSEL FOR PLAINTIFFS/APPELLANTS:
Beutler England Chiropractic Clinic
Cheryl Brown
Rusty J. Savoie
Adams and Reese, LLP
339 Florida Street, 2nd Floor
Baton Rouge, LA 70801
(225) 615-8400
COUNSEL FOR DEFENDANT/APPELLEE:
Market Basket No. 27
John S. Bradford
William B. Monk
Stockwell, Sievert, Viccellio, Clements
& Shaddock, L.L.P.
One Lakeside Plaza, Fourth Floor
Lake Charles, LA 70601
(337) 436-9491
COUNSEL FOR:
Southwest Louisiana Hospital Association, Amicus Curiae
Floyd J. Falcon, Jr.
Avant & Falcon
Post Office Box 2667
Baton Rouge, LA 70821
(225) 387-4462
COUNSEL FOR:
Louisiana American Federation of Labor and
Congress of Industrial Organizations, Amicus Curiae
John E. Galloway
Galloway, Johnson, Tompkins, Burr & Smith
29466 Frost Road
Livingston, LA 70754
(225) 686-8664
COUNSEL FOR:
F. A. Richard & Associates, Inc., Amicus Curiae
Stephen W. Glusman
Glusman, Broyles & Glusman, LLC
Post Office Box 2711
Baton Rouge, LA 70821
(225) 387-5551
COUNSEL FOR:
Louisiana Association of Self Insured Employers, Amicus Curiae
Louisiana Association of Business and Industry, Amicus Curiae
Denis Paul Juge
Juge, Napolitano, Guilbeau, Ruli,
Frieman & Whitely
American Plaza, Building D
2645 O’Neal Lane
Baton Rouge, LA 70816
(225) 754-7000
COUNSEL FOR:
Cambridge Integrated Services, Amicus Curiae
Crawford & Company, Amicus Curiae
Christopher R. Philipp
Post Office Box 2369
Lafayette, LA 70502-2369
(337) 235-9478
COUNSEL FOR:
Louisiana Municipal Risk Management, Amicus Curiae
Edward R. Wicker, Jr.
Barrasso, Usdin, Kupperman,
Freeman & Sarver, L.L.C.
LL&E Tower, Suite 1800
909 Poydras Street
New Orleans, LA 70112
(504) 589-9700
COUNSEL FOR:
Helmsman Management Services Company, Amicus Curiae
Employers Insurance of Wausau, Amicus Curiae
Liberty Mutual Insurance Company, Amicus Curiae
Perry R. Staub, Jr.
Mark E. Van Horn
Larry E. Demmons
Taggart, Morton, Ogden, Staub,
Rougelot & O’Brien, L.L.C.
2100 Energy Centre
New Orleans, LA 70163
(504) 599-8500
COUNSEL FOR:
First Health Group Corporation, Amicus Curiae
Cory R. Cahn
Entergy Services, Inc.
639 Loyola Avenue, 26th Floor
New Orleans, LA 70113
(504) 576-5533
COUNSEL FOR:
Entergy Services, Inc., Amicus Curiae
AMY, Judge.
Beutler England Chiropractic Clinic filed a disputed claim form in workers’
compensation court, alleging that services billed pursuant to the workers’
compensation fee schedule were not fully paid by an employer’s insurer. It seeks
payment of the full amount billed. The defendants contend that Beutler England
contracted to receive only 85% of that permitted under the fee schedule. The
workers’ compensation judge granted the employer’s exception of lack of subject
matter jurisdiction, finding that the matter did not arise out of the workers’
compensation statutes. Beutler England appeals. For the following reasons, we
affirm.
Factual and Procedural Background
This case involves a determination of whether the workers’ compensation court
has jurisdiction to consider a claim filed by a health care provider against an
employer and insurer for reductions made pursuant to a preferred provider
organization agreement, or PPO.
The record establishes that Cheryl Brown was employed by Market Basket #27
at the time she sustained a work-related injury. She sought treatment from Dr. Carol
Beutler, a chiropractor and partner of the Beutler England Clinic.1 According to Dr.
Beutler, Ms. Brown reported “AIG” as her insurance provider. The clinic billed for
the services rendered pursuant to the Louisiana Fee Schedule. AIG Claim Services,
Inc. paid eighty-five percent of the fee charged.
Beutler England filed the disputed claim form initiating this matter in May
2004. The disputed claim form named Market Basket #27 as Ms. Brown’s employer
1
Testimony indicates that, at the time treatment was sought, Beutler England Clinic was
operating as “England Masse.” Although Beutler England was subsequently formed, Beutler
England retained the billing responsibility for Ms. Brown’s case and has pursued this matter before
the court. For ease of discussion, we refer only to Beutler England throughout.
and “AIG Claim Service” as Ms. Brown’s insurer. The form reflects Beutler
England’s complaint as “Underpayment of medical bills; penalties and attorney fees
for arbitrary and capricious handling of this claim.”
The defendants, Market Basket #27 and AIG Claim Services, Inc., assert that
the reduced reimbursement rate is applicable in this case since Beutler England is part
of the First Health Preferred Provider Organization. The record reflects that, in 1998,
the predecessor of Beutler England joined the First Health Preferred Provider
Organization Network. The agreement memorializing that agreement, entitled “First
Health Preferred Provider Agreement,” was entered into the record. As pointed out
by the defendants, a portion of the agreement relates to workers’ compensation claims
and references a reduced rate for workers’ compensation claims.2 The defendants
also point to an agreement between First Health and AIG Claim Services, Inc.
whereby First Health permitted AIG Claim Services, Inc., to access the First Health
PPO network.
2
The agreement contains the following clause in an appendix:
D. 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 85% of the maximum amount payable under such
rules or guidelines. Any procedure code which is unvalued
shall be reimbursed pursuant to Section A, Paragraph (3), of
this Appendix. 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 the 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 reimbursement exceed the
usual and customary charge for the services as determined by
First Health or Payor.
2
The defendants filed an exception of lack of subject matter jurisdiction. They
argued that Beutler England’s claim is not merely a fee dispute, but requires
consideration of the legality of two related PPO contracts. The defendants asserted
that consideration of this type of contractual claim has not been specifically
delineated in a grant of authority to the Office of Workers’ Compensation. Following
a hearing, at which time the workers’ compensation judge also heard evidence related
to the merits of the suit, the workers’ compensation judge granted the exception.3
Beutler England appeals, assigning the following as error in its brief to this
court:
1. The Office of Workers’ Compensation Hearing Officer erred in
finding that it lacked subject matter jurisdiction over the claims
asserted by BEUTLER ENGLAND CHIROPRACTIC CLINIC
(“BEUTLER ENGLAND”) for underpayment of workers’
compensation medical bills pursuant to LSA-R.S. 23:1203 and
LSA-R.S. 23:1034.2 and for penalties and attorney fees pursuant
to LSA-R.S. 23:1201(F)(4).
2. The Office of Workers’ Compensation Hearing Officer erred in
failing to enter judgment after full and complete trial on the
merits in favor of claimant, BEUTLER ENGLAND, for the
amounts discounted below both the actual charges and the
Louisiana Fee Schedule for services rendered to workers’
compensation patient, Cheryl Brown.
3
In granting the exception of lack of subject matter jurisdiction, the workers’ compensation
judge adopted written reasons for ruling rendered in a case stated to be factually similar. In that case,
the workers’ compensation judge stated:
Whether these contracts “arise out of” or “merely relate to” or somehow in
some metaphysical sense exist in both spheres concurrently really does not make
much difference in so far as this exception is concerned in a situation where the
business practices of these workers’ compensation related corporations are governed
by, or at least influenced by, state and federal statutes arguably in need of a judicial
determination as to whether conflicts or constitutional issues are present.
The decision of this court is that for the reasons that I have taken pains to
explain, issues involving contractual arrangements between and among the medical
providers and insurance carriers and other related commercial entities are outside of
the constitutional jurisdiction of the court.
3
3. The Office of Workers’ Compensation Hearing Officer erred in
failing to enter judgment after full and complete trial on the
merits in favor of claimant, BEUTLER ENGLAND, for statutory
penalties and reasonable attorney fees under LSA-R.S.
23:1201(F)(4).
We note that, in addition to the briefs of the parties, a number of amicus curiae briefs
have been filed with this court addressing the merits of the claim and advocating their
respective positions.
Discussion
Subject Matter Jurisdiction
Beutler England frames the question as one of a fee dispute between it as the
health care provider and the employer/insurer, asserting in its brief to this court that:
“Nowhere in the 1008 claim form does claimant seek redress for anything other than
underpayment of medical bills and penalties and attorney fees associated therewith.”
Beutler England denies that it is seeking to have contracts rescinded or that it is
seeking any relief provided by the Louisiana Civil Code. Instead, it contends that its
cause of action arises solely under La.R.S. 23:1203 and its pursuit of penalties and
attorney’s fees is controlled exclusively by La.R.S. 23:1201(F)(4). Thus, Beutler
England contends, the action is within the jurisdiction of the Office of Workers’
Compensation pursuant to La.R.S. 23:1034.2. We conclude that the issues are not so
simple.
In considering the parameters of the subject matter jurisdiction of a workers’
compensation court, we turn first to the Louisiana Constitution, Article 5, § 16 which
provides that “[e]xcept as otherwise authorized by this constitution or except as
heretofore or hereafter provided by law for administrative agency determinations in
worker’s compensation matters, a district court shall have original jurisdiction of all
4
civil and criminal matters.” Along with this constitutional declaration of jurisdiction,
we consider related statutory authority, including La.R.S. 23:1310.3(E), which
provides:
Except as otherwise provided by R.S. 23:1101(D) and 1378(E),
the workers’ compensation judge shall be vested with original, exclusive
jurisdiction over all claims or disputes arising out of this Chapter,
including but not limited to workers’ compensation insurance coverage
disputes, employer demands for recovery for overpayment of benefits,
the determination and recognition of employer credits as provided for in
this Chapter, and cross-claims between employers or workers’
compensation insurers for indemnification or contribution.
Jurisprudence has established that the statute’s inclusion of the phrase, “disputes
arising out of this Chapter,” is a particular one in that disputes merely relating to
workers’ compensation provisions have not been found to be within the jurisdiction
of the workers’ compensation court. See Ellender’s Portable Bldgs., Inc. v. Cormier,
00-1724 (La.App. 3 Cir. 6/6/01), 787 So.2d 601; Covington v. A-Able Roofing, Inc.,
95-1126 (La.App. 3 Cir. 3/6/96), 670 So.2d 611; Cajun Bag and Supply v. Baptiste,
94-1218 (La.App. 3 Cir. 3/1/95), 651 So.2d 943. Given the constitutional grant of
jurisdiction to the state’s district courts, La.R.S. 23:1310.3 is narrowly construed by
the courts and will not be read more broadly than its specific language. Cajun Bag,
651 So.2d 943.
Louisiana Revised Statutes 23:1034.2 provides for the workers’ compensation
reimbursement schedule, a portion of which Beutler England contends specifically
confers jurisdiction in the present case. It provides, in pertinent part:
F. (1) Should a dispute arise between a health care provider and
the employee, employer, or workers’ compensation insurer, either party
may submit the dispute to the office in the same manner and subject to
the same procedures as established for dispute resolution of claims for
workers’ compensation benefits.
5
Our review of the claims made and the applicable statutory authority indicates
that this matter is not one that is within the jurisdiction of the workers’ compensation
court. Certainly, La.R.S. 23:1310.3 and La.R.S. 23:1034.2 appear to broadly indicate
that fee disputes and workers’ compensation insurer disputes are within the workers’
compensation court’s jurisdiction. However, the claim in this case is not a
straightforward fee or insurance dispute. Instead, given the context of the case and
the underlying contracts that will necessarily be considered, the initial issue which
must be resolved is whether Beutler England contracted to receive less than the fee
charged pursuant to the Louisiana Fee Schedule. If so, it must be determined whether
that contract can coexist with La.R.S. 23:1034.2. Although Beutler England contends
that it does not seek recision of a contract, its broad claim of a fee dispute cannot be
fully considered outside of the defendants’ contractual defense. Thus, the threshold
question in this case sounds in contract, not the workers’ compensation provisions.
There is no specific grant of jurisdictional authority to the workers’ compensation
court to consider this type of question. Rather, at this stage in the proceeding, the
issue to be resolved merely relates to the workers’ compensation provisions.
However, after a determination is made as to the amount of the fee that may be
charged, any remaining claims for insufficient payment, penalties, and attorney’s fees
will remain and may then be brought in the workers’ compensation court.
Due to our conclusion that the exception of lack of subject matter jurisdiction
was properly granted, discussion of Beutler England’s remaining assignments of error
is pretermitted.
6
DECREE
For the foregoing reasons, the ruling of the workers’ compensation judge is
affirmed. All costs of this proceeding are assigned to the appellant, Beutler England
Chiropractic Clinic.
AFFIRMED.
7
NUMBER 05-952
COURT OF APPEAL, THIRD CIRCUIT
STATE OF LOUISIANA
BEUTLER ENGLAND CLINIC (CHERYL BROWN)
VERSUS
MARKET BASKET NO. 27
PETERS, J., dissenting.
I respectfully disagree with the majority in this matter and would reverse the
WCJ’s grant of the exception of lack of subject matter jurisdiction. I find that the
OWC does have subject matter jurisdiction to determine whether a health care
provider who provides treatment to an injured employee in the workers’
compensation context is entitled to receive the amount allowed by the fee schedule
as opposed to an amount less than the fee schedule in accordance with a PPO contract
discount. Essentially, while I agree with the majority that the specifics of the PPO
contract are not properly within the OWC’s jurisdiction, I find that Beutler England’s
claim for payment for treatment of Ms. Brown does not implicate the PPO contract
because the PPO contract, whatever its provisions, may not be interposed to defeat
the statutory obligation to provide necessary medical care for an employee within the
fee schedule limits.
Specifically, the employer is obligated by La.R.S. 23:1203(A) to “furnish all
necessary drugs, supplies, hospital care and services, medical and surgical treatment,
and any nonmedical treatment recognized by the laws of this state as legal.” This
obligation “is limited to the reimbursement determined to be the mean of the usual
and customary charges for such care, services, treatment, drugs, and supplies, as
determined under the reimbursement schedule annually published pursuant to R.S.
23:1034.2 or the actual charge made for the service, whichever is less.” La.R.S.
23:1203(B). Importantly, pursuant to the fee schedule statute, La.R.S.
23:1034.2(F)(1), “[s]hould a dispute arise between a health care provider and the
employee, employer, or workers’ compensation insurer, either party may submit the
dispute to the office in the same manner and subject to the same procedures as
established for dispute resolution of claims for workers’ compensation benefits.”
Thus, clearly, the claim for payment of medical expenses not only arises out of the
Workers’ Compensation Act, but there is also an express statutory provision granting
OWC jurisdiction in case of a dispute between a health care provider and an
employer/insurer for such payment.
Nevertheless, the defendants have attempted to interpose the PPO contract as
a defense to full payment and assert that the attendant issues remove the dispute from
the jurisdiction of the OWC. However, La.R.S. 23:1033 provides that “[n]o contract,
rule, regulation or device whatsoever shall operate to relieve the employer, in whole
or in part, from any liability created by this Chapter except as herein provided.” As
set forth above, the employer’s liability for medical care is statutorily limited by the
lesser of either the amount allowed in the fee schedule or the actual charge, not by the
amount provided in a PPO contract. Accordingly, to the extent that the PPO contract
purports to further limit the employer’s liability for medical care, it runs afoul of
La.R.S. 23:1033 and may not serve as a basis to reduce the amount owed to Beutler
England for the treatment of Ms. Brown. Because the PPO contract may not serve as
a basis to reduce the amount owed for the treatment of Ms. Brown, Beutler England’s
claim is properly before the OWC pursuant to La.R.S. 23:1034.2(F)(1) as a garden-
variety medical expense claim. Whatever remaining rights the defendants have vis-à-
2
vis the PPO, in light of the Workers’ Compensation Act’s express disallowal of
contracts in contravention of its provisions, is another issue for another forum.
Finally, I do note the in-depth policy discussions on both sides of the issue
regarding the PPO contract. However, whatever the wisdom of allowing or not
allowing PPO contract discounts to invade the workers’ compensation arena, I find
that the legislature has addressed the issue through La.R.S. 23:1033 and that any
change in that regard must come from the legislature.
Accordingly, I would reverse the judgment below and remand the case for a
determination on the merits.
3