The Axe Has Fallen: DE IAB Imposes First Section 2322F Fine

The Axe Has Fallen: DE IAB Imposes First Section 2322F Fine

We all knew it was coming.  With the advent of the new medical bill payment statute and the "pay it or stay it" (with a referral to Utilization Review) provision that demands that for all Practice Guidelines classifications of injury, carriers either pay the medical bills within 30 days or refer them out for UR to investigate compliance with the Health Care Practice Guidelines, sooner or later some carrier or TPA was going to trigger the fine under 19 Del Code Section 2322F(g).  Specifically, failure to play by the new rules will (noting that the language is mandatory) result in a fine of no less than $1,000.00 and no more than $5,000.00 per occurrence.  Here in the First State that is pretty heavy stuff.

 Two weeks ago a Hearing Officer of the IAB released Joseph Robaszkiewicz v. A-Del Construction Co., IAB Hrg. # 1309426 (1/14/10).  The bill in question related to a lumbar spine surgery on a compensable claim.  The carrier attempted to defend its non-payment of the bill by referring to the 11/28/08 office note of the surgeon which suggested that the surgery would not or should not be performed until the claimant ceased smoking.

The surgeon, Dr. Bruce Katz, went forward with surgery, nicotine habit notwithstanding.  That office note, however, was written prior to a 12/5/08 surgery which the carrier did pay; for reasons which make little sense to this author, and apparently even less sense to Hearing Officer Lydia Anderson, the carrier used this smoking issue as an explanation for non-payment of a 4/5/09 bill on a subsequent revision surgery. One might say that the Hearing Officer agreed with the claimant that this whole smoking cessation issue blew smoke.

After the revision surgery, the claimant submitted properly formatted bills to the carrier.  At that juncture it had two options: payment within 30 days or submission to UR .  It did neither.  Noting that this matter was presented to the Hearing Officer on a Motion for Summary Judgment (a real novelty in a DE IAB proceeding) following a DACD Petition, the Hearing Officer found in favor of claimant as a matter of law.

The relief granted? Payment of the medical bills with interest to the health care provider at 1% per month.  An assessment against the carrier of $1,000.00 payable to the State Workers Compensation Fund pursuant to Section 2322F.  And let us not forget the usual and customary attorney's fee and medical witness fee per Section 2322(e).

What does this mean?  I would suggest that carriers, TPAs and self-insureds have been aware of the fine provisions since they were announced in May 2008.  Now that there is a precedent for non-compliance with Section 2322F(b) in terms of a fine, and the potential for an enhanced fine of up to $5,000.00, which was not the fine imposed in this case, carriers should be vigilant as to their bill payment practices.

On the flip side, however, the fines are not paid to the claimant or his attorney, and as such, parties should work together to resolve med pay issues as we all stumble through what is still a relatively new framework for medical expense processing. This author's prediction, however: if the options are "pay it or stay it" with a UR referral--or be fined; it might be time to take out stock in those Utilization Review vendor companies.  I see an upswing coming.

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Cassandra Roberts
  • 02-03-2010

After almost 2 years they finally impose a minimum fine in a case where the facts utterly fail to support a denial and the legal argument in defense is so lame my six year old came up with a better one when I just asked her out of the blue as she was passing my doorway.

This the result in a legislative battle royal in which the Department promised to aggressively enforce the payment system? The purpose of the fine being imposed was so that we have some hope of avoiding another legislative review where the GA either guts the entire system or imposes draconian measures to require the system be followed properly.

Seems to me a few months late and many dollars short.  

Given the industry''s utter contempt for the huffman penalty until someone actually files a lawsuit to enforce it, whereupon they whine and complain that they weren't "that late" no matter what the conduct was, this was always a paper tiger. Unless the Board actively imposes it without the need for claimants to establish new procedures from thin air (absent the new rules being adopted) and makes carriers promptly comply with the statute, nothing will change.

This simply shows how far you have to go to get the Board to impose the REQUIRED fine. The DOL has no intention of policing the system to get it to work. IF it did, someone at the DOL would be assigned to send warnings and propose particular cases be addressed by the Board. Instead, the only way it gets imposed is when a claimant shows the refusal to pay was not only in violation and wrong, but baseless and stupid.

While I hope it is a wake-up call for carriers to reform their billing practices, I am not sanguine it will be a call they heed. And when they do not, the DOL will be no help in fixing it at all.