The opinion
FILED
Jun 10, 2019
12:12 PM(CT)
TENNESSEE
WORKERS' COMPENSATION
APPEALS BOARD
TENNESSEE BUREAU OF WORKERS’ COMPENSATION
WORKERS’ COMPENSATION APPEALS BOARD
(HEARD MAY 31, 2019, AT KNOXVILLE)
Barbara Bauknecht ) Docket No. 2018-06-2365
)
v. ) State File No. 50910-2018
)
Five Star Quality Care, Inc. d/b/a )
Morningside Assisted Living, et al. )
)
)
Appeal from the Court of Workers’ )
Compensation Claims )
Kenneth M. Switzer, Chief Judge )
Affirmed and Remanded
In this interlocutory appeal, the employee petitioned the trial court to compel the
employer to authorize certain medical treatment as recommended by the treating
physician. The employer, citing a utilization review denial, declined to authorize the
treatment. Following an expedited hearing, during which the trial court excluded from
evidence the affidavit of the Bureau of Workers’ Compensation’s Medical Director, who
purportedly agreed with the utilization review denial, the trial court issued an order
compelling the employer to authorize the requested treatment. The employer has
appealed. Although we disagree with certain findings of the trial court, we conclude
these findings amounted to harmless error under the circumstances of this case.
Therefore, we affirm the trial court’s decision and remand the case.
Judge Timothy W. Conner delivered the opinion of the Appeals Board in which Presiding
Judge Marshall L. Davidson, III, and Judge David F. Hensley joined.
Kenneth D. Veit and Carolina V. Martin, Nashville, Tennessee, for the employer-
appellant, Five Star Quality Care, Inc. d/b/a Morningside Assisted Living
Stephan Karr, Nashville, Tennessee, for the employee-appellee, Barbara Bauknecht
Factual and Procedural Background
Barbara Bauknecht (“Employee”) was employed by Five Star Quality Care, Inc.
d/b/a Morningside Assisted Living (“Employer”) as a resident assistant. On July 4, 2018,
1
Employee reported suffering a back injury while lifting a resident. Employer accepted
the compensability of this accident and provided certain workers’ compensation benefits,
including authorized medical treatment with Dr. Edward Mackey.
On October 24, 2018, during Employee’s first visit with him, Dr. Mackey
diagnosed “stenosis and disc protrusion” at L4-L5 and stated, “I do not believe that
nonoperative management will be successful.” As a result, he recommended a
“decompressive laminectomy and fusion.” In response, Employer submitted the
treatment recommendations to its utilization review provider, which recommended denial
of the requested treatment. Upon appeal to the Bureau of Workers’ Compensation’s
Medical Director’s office, the Assistant Medical Director agreed with the denial. 1
Thereafter, Employee filed the current petition seeking an order compelling Employer to
authorize the recommended treatment.
During the course of the expedited hearing, Employer attempted to introduce an
affidavit from the Bureau’s Medical Director purportedly discussing the utilization
review denial. However, because the proposed affidavit did not comply with Tenn.
Comp. R. & Regs. 0800-02-21-.14(1)(b) (2018), which requires a party responding to a
request for expedited hearing to submit all documents “no later than ten (10) business
days before the date of the expedited hearing,” the trial court excluded the affidavit.
Later, during closing arguments, Employer’s counsel began discussing the utilization
review denial. After the trial court noted there was no proof of such a denial in the
record, Employer’s counsel stated that the utilization review report had been attached to a
prior pleading. Employer’s counsel also attempted to introduce the utilization review
report into evidence. The court declined to accept this evidence because Employer had
already closed its proof.
Following the expedited hearing, the trial court entered an order requiring
Employer to authorize the treatment recommended by Dr. Mackey. It noted that
Employer had presented no medical evidence in opposition to Dr. Mackey’s
recommendations. It also noted Employer’s unsuccessful attempt to introduce the
affidavit of the Bureau’s Medical Director. Employer has appealed.
Standard of Review
The standard we apply in reviewing a trial court’s decision presumes that the
court’s factual findings are correct unless the preponderance of the evidence is otherwise.
See Tenn. Code Ann. § 50-6-239(c)(7) (2018). When the trial judge has had the
opportunity to observe a witness’s demeanor and to hear in-court testimony, we give
1
Neither Employer’s utilization review report nor the subsequent report of the Medical Director’s office
was admitted into evidence during the expedited hearing. We have gleaned these facts from the Petition
for Benefit Determination and Employee’s affidavit, admitted into evidence as Exhibit 1.
2
considerable deference to factual findings made by the trial court. Madden v. Holland
Grp. of Tenn., Inc., 277 S.W.3d 896, 898 (Tenn. 2009). However, “[n]o similar
deference need be afforded the trial court’s findings based upon documentary evidence.”
Goodman v. Schwarz Paper Co., No. W2016-02594-SC-R3-WC, 2018 Tenn. LEXIS 8, at
*6 (Tenn. Workers’ Comp. Panel Jan. 18, 2018). Similarly, the interpretation and
application of statutes and regulations are questions of law that are reviewed de novo with
no presumption of correctness afforded the trial court’s conclusions. See Mansell v.
Bridgestone Firestone N. Am. Tire, LLC, 417 S.W.3d 393, 399 (Tenn. 2013). We are
also mindful of our obligation to construe the workers’ compensation statutes “fairly,
impartially, and in accordance with basic principles of statutory construction” and in a
way that does not favor either the employee or the employer. Tenn. Code Ann. § 50-6-
116 (2018).
Analysis
Tennessee Code Annotated section 50-6-102(20) (2018) defines utilization review
as the “evaluation of the necessity, appropriateness, efficiency and quality of medical
care services.” Section 50-6-124 instructs the Administrator of the Bureau of Workers’
Compensation to “establish a system of utilization review” and, in subsection (f) of that
statute, the legislature expressed its intent to “ensure the availability of quality medical
care services for injured and disabled employees.”
The regulations governing utilization review provide that an adverse decision
made by an employer’s utilization review agent may be appealed to the “Bureau or its
designated contractor.” Tenn. Comp. R. & Regs. 0800-02-06-.07(1) & (2) (2017).
Presently, such appeals are handled by the office of the Bureau’s Medical Director. Id.
The regulation further provides that “[t]he determination of the Bureau or its designated
contractor is final for administrative purposes.” Tenn. Comp. R. & Regs. 0800-02-06-
.07(2)(a). Moreover, such a denial “is effective for a period of 6 months from the date of
the determination as set forth in rule 0800-02-06-.06(7).” Tenn. Comp. R. & Regs. 0800-
02-06-.07(5).
In the event a party disagrees with the Medical Director’s determination, “then the
aggrieved party may file a Petition for Benefit Determination (PBD) with the Court of
Workers’ Compensation Claims within seven (7) business days of the receipt of the
determination to request a hearing of the dispute in accordance with applicable statutory
provisions.” Tenn. Comp. R. & Regs. 0800-02-06-.07(6). If the petitioner requests an
expedited hearing to address the utilization review denial, then the burden is on the
petitioner to show that he or she would likely prevail at trial in establishing the medical
necessity of the recommended treatment. Tenn. Code Ann. § 50-6-239(d)(1). There is a
rebuttable presumption that treatment recommended by an authorized provider is
medically necessary to treat the work injury. Tenn. Code Ann. § 50-6-204(a)(3)(H).
Under such circumstances, the burden shifts to the employer to rebut this presumption.
3
In the present case, there is no dispute that treatment recommended by the
authorized physician was submitted by Employer for utilization review. There is no
dispute that Employer’s utilization review agent recommended non-authorization of the
prescribed treatment. There is no dispute that this decision was appealed to the Medical
Director’s office and that the Assistant Medical Director agreed with the denial. These
facts were admitted in Employee’s petition. Moreover, Employee testified in her
affidavit, introduced during the hearing as Exhibit 1, that “Dr. Mackey recommended
surgery which was denied by Utilization Review and Dr. Talmage with the State Medical
Director[’]s office agreed with their decision.” Thus, it was not fatal to Employer’s
defense that neither Dr. Talmage’s letter agreeing with the utilization review denial nor
Dr. Snyder’s affidavit were not properly admitted into evidence because these facts were
not in dispute. Instead, the pertinent legal questions are: (1) whether Employee came
forward with enough evidence to show a likelihood of prevailing at trial on the issue of
medical necessity; and (2) whether Employer came forward with sufficient evidence to
rebut the presumption of medical necessity accorded the opinion of the authorized
physician.
Employer argues that the utilization review report had been attached to
Employer’s petition and, pursuant to Rule 10.03 of the Tennessee Rules of Civil
Procedure, should have been included as an exhibit in the technical record and considered
by the trial court in support of Employer’s defense. The rule provides that “[w]henever a
claim or defense is founded upon a written instrument other than a policy of insurance, a
copy of such instrument . . . shall be attached to the pleading as an exhibit . . . [and] shall
be part of the pleading for all purposes.” Tenn. R. Civ. P. 10.03 (2018). For example, the
Tennessee Supreme Court has noted in a case involving public works contracts, copies of
which had been attached to the complaint, that “[s]ince these represented the foundation
of the suit, their provisions were incorporated into and became part of the pleadings and
could properly be relied upon by both parties.” W & O Construction Co. v. Smithville,
557 S.W.2d 920, 921 (Tenn. 1977).
However, in the circumstances of this case, we find Employer’s reliance on Rule
10.03 to be misplaced. Employee’s claim for benefits was not “founded upon a written
instrument.” Instead, her claim was founded upon the surgery recommendation of the
authorized treating physician, which was evidenced by Dr. Mackey’s properly-admitted
medical records. If Employer sought to rely upon a written instrument as the foundation
of its defense, it had the burden of offering that written instrument into evidence in an
admissible form. Here, it failed to do so.
It is within this legal framework that we assess the trial court’s order compelling
Employer to authorize the treatment recommended by Dr. Mackey, the authorized
physician. We start with the presumption that such treatment is medically necessary in
accordance with Tennessee Code Annotated section 50-6-204(a)(3)(H). The question
then becomes whether Employer came forward with sufficient evidence to rebut the
4
presumption. In its effort to do so, Employer attempted to rely on a utilization review
report that was never offered into evidence at the expedited hearing. It also sought to
introduce an affidavit from the Medical Director, but did not comply with Rule 0800-02-
21-.14(1)(b). 2 Under these circumstances, we find no abuse of discretion in the trial
court’s decision to exclude the report and affidavit.
However, we respectfully disagree with the trial court’s statements during the
expedited hearing suggesting there was no evidence of the utilization review denial
before it. As we have noted, these facts were admitted in both Employee’s petition and in
her affidavit. Therefore, the trial court should have considered that the recommended
treatment had been submitted for utilization review, that Employer’s utilization review
agent had recommended denial of the treatment, and that the Bureau’s Assistant Medical
Director had agreed with that decision. The question then is whether these facts, standing
alone, were sufficient to rebut the presumption of medical necessity attributable to Dr.
Mackey’s recommended treatment. Since Employer’s utilization review report, Dr.
Talmage’s letter agreeing with that report, and Dr. Snyder’s affidavit were never properly
introduced as evidence at the expedited hearing, we conclude Employee’s
acknowledgments regarding the utilization review denial and Dr. Talmage’s agreement
with it, standing alone, did not rebut the presumption of medical necessity. Therefore,
the trial court’s refusal to consider such facts amounts to harmless error under the
circumstances of this case. As a result, we agree with the trial court’s determination that
Employee met her burden of showing a likelihood of prevailing at trial on this issue.
Conclusion
For the foregoing reasons, the trial court’s order compelling medical treatment is
affirmed, and the case is remanded. Costs on appeal are taxed to Employer.
2
Employer did not seek to make an offer of proof during the course of the hearing with respect to the
utilization review report, Dr. Talmage’s letter, or Dr. Snyder’s affidavit.
5
TENNESSEE BUREAU OF WORKERS’ COMPENSATION
WORKERS’ COMPENSATION APPEALS BOARD
Barbara Bauknecht ) Docket No. 2018-06-2365
)
v. ) State File No. 50910-2018
)
Five Star Quality Care, Inc. d/b/a )
Morningside Assisted Living, et al. )
)
)
Appeal from the Court of Workers’ )
Compensation Claims )
Kenneth M. Switzer, Chief Judge )
CERTIFICATE OF SERVICE
I hereby certify that a true and correct copy of the Appeals Board’s decision in the
referenced case was sent to the following recipients by the following methods of service
on this the 10th day of June, 2019.
Name Certified First Via Fax Via Sent to:
Mail Class Fax Number Email
Stephan D. Karr X steve@flexerlaw.com
monica@flexerlaw.com
Carolina Martin X carolina.martin@leitnerfirm.com
Kenneth D. Veit X kenny.veit@leitnerfirm.com
Kenneth M. Switzer, Chief Judge X Via Electronic Mail
Penny Shrum, Clerk, Court of X penny.patterson-shrum@tn.gov
Workers’ Compensation Claims
Matthew Keene
Deputy Clerk, Workers’ Compensation Appeals Board
220 French Landing Dr., Ste. 1-B
Nashville, TN 37243
Telephone: 615-253-0064
Electronic Mail: WCAppeals.Clerk@tn.gov