Pennsylvania: Compromise & Release May Not Be Used as Informal Utilization Review

A Pennsylvania appellate court held that a compromise and release (C&R) agreement may not be employed to avoid the procedures in the state’s Workers’ Compensation Act for challenging a provider's invoice or a fee review determination that the invoice must be paid. That is because the parties to a C&R agreement can bind each other; they cannot release themselves from liability to a person or entity who is not a party. Thus, where claimant and the insurer entered into a C&R agreement that provided for payment of all “reasonable, necessary and related medical expenses incurred before the hearing date,” and further provided that no benefits would be paid for any compounded prescription cream, the insurer could not refuse to pay a pharmacy $6,644.30, plus interest, for a compound prescription cream that was prescribed prior to the hearing date on the C&R agreement. The court noted that one year earlier, the insurer had sought utilization review regarding the identical compound cream and the utilization review organization determined that the cream prescribed to Claimant was reasonable and necessary to treat Claimant's accepted work injury. To the extent the insurer desired to challenge the treatment as neither reasonable nor necessary, it had to see UR under the Act.

Thomas A. Robinson, J.D., the Feature National Columnist for the LexisNexis Workers’ Compensation eNewsletter, is co-author of Larson’s Workers’ Compensation Law (LexisNexis).

LexisNexis Online Subscribers: Citations below link to Lexis Advance.

See Armour Pharmacy v. Bureau of Workers' Comp. Fee Review Hearing Office (National Fire Insurance Company of Hartford), 2018 Pa. Commw. LEXIS 368 (Aug. 7, 2018)

See generally Larson’s Workers’ Compensation Law, § 94.02.

Source: Larson’s Workers’ Compensation Law, the nation’s leading authority on workers’ compensation law