“Our holding does not limit the determination of the status of a ‘provider’ to a fee review proceeding. In appropriate cases, this question may also be determined by a workers' compensation judge in the course of a claim or penalty petition proceeding”
How later courts described this case
- “Our holding does not limit the determination of the status of a ‘provider’ to a fee review proceeding. In appropriate cases, this question may also be determined by a workers' compensation judge in the course of a claim or penalty petition proceeding”
Written by the judges who cited it.
The opinion
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2023 PA Super 88
ELITE CARE, RX, LLC : IN THE SUPERIOR COURT OF
: PENNSYLVANIA
:
v. :
:
:
PREMIER COMP SOLUTIONS, LLC; :
LAUNDRY OWNERS' MUTUAL :
LIABILITY INSURANCE : No. 1144 WDA 2020
ASSOCIATION; UPMC BENEFIT :
MANAGEMENT SERVICES, INC. :
D/B/A UPMC WORK PARTNERS; :
LACKAWANNA CASUALTY COMPANY; :
AND BRICK STREET MUTUAL :
INSURANCE COMPANY :
:
:
APPEAL OF: PREMIER COMP :
SOLUTIONS, LLC, LAUNDRY :
OWNERS' MUTUAL LIABILITY :
INSURANCE ASSOCIATION, :
LACKAWANNA CASUALTY COMPANY :
AND BRICK STREET MUTUAL :
INSURANCE COMPANY :
Appeal from the Order Entered June 5, 2020
In the Court of Common Pleas of Allegheny County Civil Division at
No(s): GD-19-005312
BEFORE: PANELLA, P.J., OLSON, J., DUBOW, J., KUNSELMAN, J., NICHOLS,
J., MURRAY, J., McLAUGHLIN, J., McCAFFERY, J., and SULLIVAN,
J.
DISSENTING OPINION BY OLSON, J.: FILED: MAY 23, 2023
I respectfully dissent from the learned Majority’s determination in this
matter.
The exclusivity provision of the Workers’ Compensation Act (“WCA”)
declares:
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The liability of an employer under [the WCA] shall be
exclusive and in place of any and all other liability to such
employes, his legal representative, husband or wife, parents,
dependents, next of kin or anyone otherwise entitled to
damages in any action at law or otherwise on account of any
injury or death as defined in section 301(c)(1) and (2) or
occupational disease as defined in section 108.
77 P.S. § 481(a).
Under this section, the WCA “is a worker’s exclusive remedy against his
employer for an injury sustained in the course and scope of employment.”
Lewis v. Sch. Dist. Of Phila., 538 A.2d 862, 867 (Pa. 1988). In other words,
“[t]he exclusivity provision of the [WCA] essentially ‘bars tort actions flowing
from any work-related injury.’” American Road Lines v. W.C.A.B. (Royal),
39 A.3d 603, 610 (Pa. Cmwlth. 2012), quoting Kline v. Arden H. Verner
Co., 469 A.2d 158, 160 (Pa. 1983).
Our Supreme Court has concluded that the exclusivity provision of the
WCA offers co-extensive immunity to both employers and their insurance
carriers. Specifically, the Supreme Court declared, under the WCA, “[t]he
employer's immunity from tort action extends to its workers' compensation
insurance carrier, protecting the insurer to the full extent of the employer's
protection.” Kuney v. PMA Ins. Co., 578 A.2d 1285, 1286 (Pa. 1990); see
also 77 P.S. § 501(a)(1) (“[the WCA] insurer shall assume the employer's
liability hereunder and shall be entitled to all of the employer's immunities and
protection hereunder”). Thus, “[a]n employer's liability for work-related
injuries is governed solely by the [WCA], and the same is true of a
compensation insurance carrier.” Kuney, 578 A.2d at 1286. Further, as our
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Supreme Court has held, “[t]he exclusivity provisions of the [WCA] prohibit a
tort action against the insurance carrier for damages caused by the insurer's
allegedly intentional mishandling of the injured employee's compensation
claim.” Id. at 1288.
In the case at bar, Elite Care, Rx, LLC (hereinafter “Plaintiff”), filed suit
against Appellants, all of whom are workers’ compensation insurance carriers
or the agents of such insurers. Plaintiff’s Complaint, 4/9/19, at ¶¶ 8-9. Within
its complaint, Plaintiff averred that “certain employees whose employers were
insured by [Appellants] were injured during the course and scope of their
work.” Id. at ¶ 35. The employees were prescribed medications for their
injuries and a pharmacy, named Patient Direct RX, filled these prescriptions.
See id. at ¶¶ 11, 21, and 35. According to Plaintiff, “[a]fter Patient Direct RX
fill[ed] the prescriptions of these patients, certain Providers then purchase[d]
the claims arising from these prescriptions (i.e. the right to bill and collect
from the carrier) from Patient Direct RX, paying fair market value for the
same.” Id. at ¶ 14. Plaintiff is “the manager and billing agent” for these
Providers. Id. at ¶ 16.
As Plaintiff claimed, Appellants failed to pay for the prescription
medications that “each insured’s injured employee has received.” Id. at ¶ 20.
Further, Plaintiff claimed, Appellants “have alleged that they are not required
to pay [for the prescription medications] because [Plaintiff is] . . . not a Health
Care Provider as defined by the” WCA. Id. at ¶ 22. According to Plaintiff,
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Appellants “have denied payment for 110 different injured employees
resulting in $548,035.28 of unpaid medical prescriptions.” Id. at ¶ 38.
Moreover, in an attempt to resolve the claim, Appellants demanded that
Plaintiff file an application for fee review under the WCA. Id. at ¶ 29. Plaintiff
claims, however, that after it obtained favorable administrative decisions,
Appellants requested hearings before the Bureau of Workers’ Compensation,
and, in front of the hearing officer, Appellants “frivolously and in bad faith
asserted that [the fee review] process [was] improper.” Id. at ¶ 37.
Plaintiff’s complaint contains four counts: 1) a demand for declaratory
relief; 2) fraud; 3) civil conspiracy; and 4) unjust enrichment. Specifically, in
Count 1, Plaintiff requested that the trial court declare that it “is a valid agent
of [the] Health Care Providers and [Appellants] must pay for these
medications . . . , plus 10% per annum, per 77 P.S. § 717.1.”1 Id. at
Declaratory Relief “Wherefore” Clause.
____________________________________________
1 In relevant part, 77 P.S. § 717.1(a) provides:
The employer and insurer shall promptly investigate each injury
reported or known to the employer and shall proceed promptly to
commence the payment of compensation due either pursuant to
an agreement upon the compensation payable or a notice of
compensation payable as provided in section 407 or pursuant to
a notice of temporary compensation payable as set forth in
subsection (d), on forms prescribed by the department and
furnished by the insurer. The first installment of compensation
shall be paid not later than the twenty-first day after the employer
has notice or knowledge of the employe's disability. Interest shall
accrue on all due and unpaid compensation at the rate of ten per
centum per annum.
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In Count 2, Plaintiff claimed that Appellants fraudulently asserted that
Plaintiff “was not an agent of [the Health Care] Providers, and thus payment
did not need to be made for the prescriptions their injured employees
received.” Id. at ¶ 45. Moreover, Plaintiff claimed that Appellants “furthered
this fraud by claiming that [Plaintiff’s] exclusive remedy to resolve this issue
was to file [an application for fee review, but then, after Plaintiff received a
favorable administrative decision, Appellants] . . . argued that the fee review
process” was inappropriate. See id. at ¶¶ 47-49. For this alleged fraud,
Plaintiff sought $548,035.28 in “unpaid medical prescriptions,” plus the
additional costs it expended during the fee review process. Id. at Fraud
“Wherefore” Clause.
Plaintiff’s civil conspiracy claim, at Count 3, reiterated the allegations
that supported its fraud claim and, in its Wherefore Clause, Plaintiff again
demanded that Appellants pay the $548,035.28 as “unpaid medical
prescriptions,” plus the additional costs Plaintiff expended during the fee
review process. See id. at Civil Conspiracy “Wherefore” Clause.
Finally, in the unjust enrichment claim at Count 4, Plaintiff alleged that
it provided “the necessary prescriptions to the insureds’ injured employees
____________________________________________
77 P.S. § 717.1(a). Under this section of the WCA, “[i]f an insurer fails to pay
the entire bill within 30 days of receipt of the required bills and medical
reports, interest shall accrue on the due and unpaid balance at 10% per
annum.” 34 Pa.Code § 127.210.
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without receiving payment for the same” and that Plaintiff “conferred a
financial benefit upon” Appellants in the amount of $548,035.28. Id. at ¶ 59.
As is evident from the above, Plaintiff’s claims all seek payment for
treatment that was provided under the WCA or compensation for damages
caused by Appellants’ alleged intentional mishandling of workers’
compensation claims, both of which occurred while Appellants acted within
their roles as workers’ compensation insurers under the WCA. As stated
above, the WCA establishes the exclusive forum for resolution of both
payment disputes and alleged mismanagement of workers’ compensation
claims. See, e.g., 77 P.S. § 531(1)(i) (“[t]he employer shall provide payment
in accordance with this section for reasonable surgical and medical services,
services rendered by physicians or other health care providers”); Kuney, 578
A.2d at 1288 (“[t]he exclusivity provisions of the [WCA] prohibit a tort action
against the insurance carrier for damages caused by the insurer's allegedly
intentional mishandling of the injured employee's compensation claim”). As
such, Plaintiff is bound by the exclusive remedies of the WCA and Appellants
enjoy statutory immunity from Plaintiff’s current action before the court of
common pleas. Therefore, I would vacate the trial court’s order and hold that
Plaintiff’s civil action is barred by the WCA.
The learned Majority holds otherwise. As the Majority notes, one of the
main issues in this case is whether Plaintiff – the agent of a putative health
care provider – may receive compensation for treatment that Patient Direct
RX provided under the WCA. Further, the Majority cites to the Commonwealth
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Court’s opinion in Armour Pharmacy v. Bureau of Workers’
Compensation Fee Review Hearing Office (Wegman’s Food Markets,
Inc.), 206 A.3d 660 (Pa. Cmwlth. 2019) (en banc) (hereinafter “Armour I”),
where the Commonwealth Court held that, in a fee review proceeding under
the WCA, the Hearing Office has jurisdiction to determine whether a putative
provider serves or functions as an actual “provider” under the WCA.
Nevertheless, the Majority holds: that Armour I was incorrectly decided;
that the scope of the fee review process is limited to the ”amount or timeliness
of payment for medical treatment;” and, that the determination of whether
an entity is a “provider” is beyond the scope of a fee review. See, e.g.,
Majority Opinion at **8-11. The Majority then reasons that, because the issue
of whether Plaintiff is a “provider” is beyond the scope of the fee review
process, Appellants do not enjoy immunity from Plaintiff’s claims. See id. at
**10-12.
Respectfully, I believe the Majority is incorrect. I express no opinion on
whether Armour I was correctly or incorrectly decided. However, regardless
of whether Armour I was correctly decided, the issue of whether Plaintiff is a
provider entitled to relief under the WCA can always be decided, under the
WCA, by a workers’ compensation judge. Indeed, as the Commonwealth
Court explained:
[A c]laimant can file a petition to establish [the i]nsurer's
liability to [a putative provider], such as a review petition or
a penalty petition. . . . Claimants have an incentive to file a
petition on behalf of a provider because when an insurer
violates the [WCA] by failing to make proper payment to a
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medical provider, the penalty is payable to the claimant [as
a statutory incentive]. The absence of a direct statutory
remedy for providers does not mean that [an appellate court]
may expand the scope of a fee review to create a remedy.
The matter is one for the legislature, assuming there is a
need for a provider to have another remedy.
Selective Ins. Co. of Am. V. Bureau of Workers’ Comp. Fee Review
Hearing Office (The Physical Therapy Institute), 86 A.3d 300, 305 n.9
(Pa. Cmwlth. 2014) (citations omitted), overruled, in part, by Armour I; see
also Armour I, 206 A.3d at 672 (“Our holding does not limit the
determination of the status of a ‘provider’ to a fee review proceeding. In
appropriate cases, this question may also be determined by a workers'
compensation judge in the course of a claim or penalty petition proceeding”).2
Further, and more to the point, even if the determination of whether an
entity is a “provider” is beyond the scope of the fee review process, this
holding would not diminish Appellants’ statutory immunity from Plaintiff’s tort
action, where Plaintiff’s claims either seek payment for treatment that was
provided under the WCA or compensation for damages caused by the insurer's
alleged intentional mishandling of the workers’ compensation claim. As
____________________________________________
2 Having a workers’ compensation judge make the determination of who is a
“provider” under the WCA makes eminent sense. Workers’ compensation
judges are uniquely qualified to make such decisions due to their expertise in
the area of workers’ compensation law. Under the Majority decision, the
interpretating of the WCA and determinations that impact this highly
specialized body of law would be made by judges on the courts of common
pleas who are generally not experienced in this field. Hence, the reason for
the WCA’s exclusivity provisions.
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explained above, the WCA provides the exclusive forum for resolving both
types of disputes and, thus, Plaintiff’s current action is barred by the WCA.
Therefore, I respectfully dissent.
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