W.C. No. 4-531-613.Industrial Claim Appeals Office.
September 16, 2005.
FINAL ORDER
The claimant seeks review of an order dated April 18, 2005, entered on remand by Administrative Law Judge Stuber (ALJ). The claimant contends the ALJ abused his discretion by imposing a penalty of only $1,720 for the respondents’ violation of the Rules of Procedure, Part XVI(K)(2)(b), 7 Code Colo. Reg. 1101-3 at 80 (2004). We disagree, and therefore, affirm.
Rule XVI(K)(1), requires that medical bills be paid within 30 days of receipt unless the employer contests liability in accordance Rule XVI(K)(2). Rule XVI(K)(2)(b) requires an employer to dispute payment of a medical bill by submitting a written notification of contest within 30 days of its receipt of the bill.
In February 2002 the claimant suffered a compensable injury to her right upper extremity which was treated by Dr. Nelson. On November 13, 2002, Dr. Nelson referred the claimant to the Memorial Hospital for chest x-rays. On December 13, 2002, the respondents received an itemized billing statement dated November 29, 2003, for chest x-rays taken on November 18 in the total amount of $229. In early 2003, the insurer’s adjuster requested medical records to determine the causal relationship between the x-rays and the industrial injury. The respondents received the records in February 2003. Thereafter, the claimant made numerous requests for payment of the Memorial Hospital bill but no payment was made and the matter was referred to a collections agency for recovery from the claimant. The respondents paid the fee scheduled bill of $60.98 on December 24, 2003.
In February 2004, the claimant applied for a hearing on the issue of penalties. In a prior order, the ALJ determined the respondents’ duty to comply with Rule XVI(K) was triggered by their receipt of the November 2002 billing statement. Consequently, the ALJ found the respondents violated Rule XV(K)(2). The ALJ also found the respondents failed to demonstrate any reasonable justification for the violation. However, the ALJ further determined the respondents cured the violation prior to the filing of the Application for Hearing on penalties and that the claimant failed to prove by clear and convincing evidence as required by §8-43-304(4), C.R.S. 2004, that the adjuster “reasonably should have known that the November 29, 2002 document triggered the duty to pay or contest within 30 days.” Therefore, the ALJ denied the claim for penalties.
On review we concluded the ALJ erroneously determined the adjuster’s refusal to admit any mistake precluded a finding that the adjuster reasonably should have known the requirements of Rule XVI(K)(2). Therefore, we reversed the order denying penalties and remanded the matter to the ALJ for the assessment of a specfic penalty consistent with § 8-43-304(1), C.R.S. 2004.
On remand the ALJ imposed a penalties at the rate of $5 per day for 344 days in the total amount of $1,720. The claimant timely appealed.
On review the claimant contends the ALJ’s findings of fact are insufficient to permit appellate review and argues that a greater penalty was compelled by the record and the applicable law. We conclude the claimant’s arguments do not establish grounds to grant appellate relief.
As argued by the claimant, complete compliance with Rule XVI(K) is required. A violation of Rule XVI(K) is punishable under § 8-43-304(1), which allows the ALJ to assess a penalty between one cent and $500 per day. The amount of the penalty may be based on consideration of several factors including the extent of harm to the claimant, the duration and type of violation, the insurer’s motivation for the violation, the insurer’s mitigation, and whether or not the misconduct is representative of a pattern of misconduct. See Pueblo School District No. 70 v. Toth, 924 P.2d 1094 (Colo.App. 1996); Trumble v. Choice Casing Service, Inc.,
W.C. No. 4-125-136 (March 29, 1996), aff’d. Choice Casing Service, Inc. v. Industrial Claim Appeals Office, Colo. App. No. 96CA0664, January 16, 1997 (not selected for publication).
Because the ALJ’s authority is discretionary, we may not disturb the ALJ’s determination of the amount of the penalty to be imposed in the absence of fraud or an abuse of discretion. See Hall v. Home Furniture Co., 724 P.2d 94 (Colo.App. 1986); Brunetti v. Industrial Commission, 670 P.2d 1246 (Colo.App. 1983). There is no assertion of fraud in this case and the legal standard for review of an alleged abuse of discretion is whether, under the totality of the factual circumstances at the time of the ALJ’s determination, the ALJ’s order “exceeds the bounds of reason.” Rosenberg v. Board of Education of School District #1, 710 P.2d 1095 (Colo. 1985). The application of this standard includes consideration of whether the ALJ’s determination is supported by substantial evidence and the applicable law. Coates, Reid Waldron v. Vigil, 856 P.2d 850 (Colo. 1993). Furthermore, we have previously construed from the Northern Telecom, Inc. v. Industrial Claim Appeals Office (Colo.App. 02CA2052, December 24, 2003) (not selected for publication) decision that when determining whether an award of penalties constitutes an abuse of discretion we must consider whether the amount of the penalty is disproportionate to the conduct. See Moland v. Industrial Claim Appeals Office, 111 P.3d 507 (Colo. App. 2004). We adhere to our prior conclusions.
Initially, we reject the claimant’s contention that the ALJ’s factual determinations are legally inadequate to ascertain the basis of his refusal to impose a greater penalty. The ALJ’s order reflects his consideration of the pertinent factors. In particular, the ALJ determined that penalties at the rate of $5 per day were appropriate considering the:
“nature of the rule violation, amount of the bill, absence of concrete harm, and the insurer’s reasonably prompt payment after December 3, 2003 deposition testimony by Dr. Nelson.” (Finding of Fact 16)
The ALJ also expressly rejected the claimant’s arguments that the violation significantly damaged her credit rating. To the contrary, the ALJ found the claimant’s home loan was not canceled, the claimant still had her credit cards and the claimant’s difficulty in paying her loan was not a product of the respondents’ failure to pay the Memorial Hospital bill.
The claimant’s arguments notwithstanding, the ALJ’s findings are supported by substantial evidence and plausible inferences drawn from the record. Furthermore, we may not substitute our judgment for that of the ALJ concerning the sufficiency or probative weight of the claimant’s testimony and decline the claimant’s initiation to do so. Gelco Courier v. Industrial Commission, 702 P.2d 295 (Colo.App. 1985).
Insofar as the claimant contends the respondents’ refusal to pay the fee scheduled bill of $60.98 is an aggravating factor, the ALJ apparently determined that the respondents’ prompt payment of the bill after the December 3 deposition of Dr. Nelson was a mitigating factor. Further, the claimant concedes the respondents paid the unpaid medical bill prior to the hearing on penalties. Consequently, the ALJ reasonably inferred that a greater penalty was not necessary to deter the employer from future, similar violations.
Finally, we note that although Senate Bill 218 increased the maximum penalty from $100 per day to $500 it did not raise the minimum penalty to be imposed. 1991 Colo. Sess. Laws ch. 219 at 1323. Therefore, we reject the claimant’s contention that the Senate Bill 218 amendments were intended to require the imposition of penalties at a rate of more than $5 per day.
The penalty rate imposed by the ALJ order falls within the statutory parameters for the imposition of penalties under § 8-43-304(1), and we are not persuaded by the claimant’s other arguments that the penalty rate is disproportionate to the harm caused to the claimant. Under these circumstances, we conclude the ALJ did not abuse his discretion in failing to assess a penalty greater than $1,720.
IT IS THEREFORE ORDERED that the ALJ’s order dated April 18, 2005, is affirmed.
INDUSTRIAL CLAIM APPEALS PANEL
____________________________________ Kathy E. Dean
____________________________________ Tom Schrant
Sandra Whitman Grant, Security, CO, Vivian Colony, Professional Contract Services, Fort Carson, CO, Commerce Industry Insurance Company, c/o Dawn Chambers, AIG Claim Services, Inc., Shawnee Mission, KS, Subsequent Injury Fund, Division of Workers’ Compensation — Interagency Mail, Steven U. Mullens, Esq., Colorado Springs, CO, (For Claimant).
William M. Sterck, Esq. and Joanne C. Crebassa, Esq., Denver, CO, (For Respondents).