Who gets to decide who is a healthcare provider?

Medical providers under Pennsylvania's Workers' Compensation Act, can request payment for reasonable, necessary, and causally related treatment. But who gets to decide what qualifies as a medical "provider"?

?Attempts to answer this question have caused an unusual rift between Pennsylvania's intermediate appellate courts.

?Pennsylvania's Commonwealth Court has jurisdiction over appeals from Pennsylvania's administrative agencies which includes workers' compensation.

?The Commonwealth Court initially addressed this issue all the way back in 2014, in the case of ?Selective Insurance. In that case, the question of whether a billing entity was in fact a healthcare provider was litigated simultaneously in a fee review case filed by the putative provider before a Fee Review Hearing Officer and simultaneously in a Penalty Petition filed by the claimant before a Workers’ Compensation Judge.

?In Selective Insurance, the Commonwealth Court concluded: (1) this was a question which was properly before the Workers’ Compensation Judge on the Penalty Petition; and (2) the jurisdiction of Fee Review was limited to questions of the amount and timeliness of billing and did not include whether a business or individual qualifies as a medical provider. ?

?The ruling from Selective Insurance remained the law of the land for five years until it was overruled in 2019 by the Commonwealth Court in Armour Pharmacy I. Addressing a due process argument raised by a pharmacy with an unusual business structure covered by the press, the Commonwealth Court held that the question of who is a provider could be answered by both Fee Review Hearing Officers as well as Workers’ Compensation Judges.

?Around this same time in early 2019, Elite Care RX, LLC, filed a lawsuit in western Pennsylvania against several Pennsylvania workers’ compensation insurers seeking a declaratory judgement and alleging fraud and civil conspiracy related to the denial of workers’ compensation pharmaceutical bills.

?According to the Complaint, Elite Care RX, LLC, alleged that the defendants were denying its bills claimant that Elite Care was not a provider and that its exclusive remedy was to file a Fee Review Application, and then arguing for the dismissal of the Fee Review Applications on the basis of lack of jurisdiction per the Selective Insurance case.

?On the other hand, it appears that the defendants had good reason to question Elite Care’s status as a provider, as the Complaint ?describes their business model: (1) injured workers are given prescriptions by their healthcare providers which are filled at a pharmacy called Patient Direct RX; (2) the claims or right to bill for these prescriptions is then purchased from the pharmacy by “certain Providers” who then utilize Elite Care RX, LLC as a billing agent.

?Moreover, it is not clear why the Complaint was filed by a billing agency, Elite Care RX, as opposed to these “certain Providers” whom the Complaint alleges actually “bear the risk of collection.”

?In response to the Complaint, the defendants filed preliminary objections to the Complaint arguing that the Court of Common Pleas lacked jurisdiction to address the workers’ compensation questions raised by the case. The Judge denied the preliminary objections and the defendants appealed to Pennsylvania’s other intermediate appellate court, the Superior Court, who ultimately entertained the appeal en banc.

?In its en banc Opinion, the Majority addressed the cases summarized above and stated that in Armour Pharmacy the Commonwealth Court “created jurisdiction in the Bureau even though the legislature had not” and that “[r]espectfully, in our view, the Commonwealth Court lacked the power to graft an extra-statutory scheme on the [Workers’ Compensation Act]…Attempting to effectuate due process, the Armour Pharmacy Court legislated from the bench.”

?The Majority’s conclusion: “the Worker’s Compensation Act does not provide for an administrative proceeding by or against putative providers or their billing agents in the Bureau. Such entities have no standing there, because the [Workers’ Compensation Act] does not confer it upon them.”

?However, the majority’s opinion was not unanimous. In her dissent, Judge Judith Olsen observed that regardless of whether the Commonwealth Court was correct in Armour Pharmacy I as to whether a Fee Review Hearing Officers have jurisdiction to address provider status, there is no question that the Act grants this jurisdiction to Workers’ Compensation Judges. Therefore, Elite Care RX, LLC’s Complaint would be barred by the Workers’ Compensation Act exclusivity provisions.

As I mentioned in my last article, the Commonwealth Court has relied upon findings of Fee Review Hearing Officers on the provider status or lack thereof to deny reimbursement to medical supply drop-shipping companies. Given the Superior Court’s Opinion in Elite Care RX, LLC, these putative providers may be enticed to challenge these prior decisions.

If neither of Pennsylvania’s intermediate courts reverses course, this disagreement will most likely need to be resolved by the Supreme Court of Pennsylvania. In the meantime, individual jurists may interpret these conflicting opinions differently and employers and insurers would be well-served to reach out to an attorney for questions regarding specific cases.

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