W.C. No. 4-255-485Industrial Claim Appeals Office.
October 2, 1996
FINAL ORDER
The respondent seeks review of a final order of Administrative Law Judge Martinez (ALJ) insofar as the ALJ required the respondent to pay for treatment provided by Collin Ecker, M. Ed., and imposed penalties in connection with the respondent’s failure timely to pay medical benefits. We affirm the award of medical benefits, set aside the penalty order, and remand the matter to the ALJ for entry of a new order on the issue of penalties.
In 1995 the claimant suffered compensable injuries when shot while driving a taxicab. As a result of the injuries the claimant has been treated by several physicians including Dr. Silva, Dr. Pino and Dr. Tyler, a psychiatrist. The claimant has also received counseling from Collin Ecker, M. Ed. (Ecker).
Dr. Silva referred the claimant for a psychological evaluation. Thereafter, the claimant began counseling with Ecker. The ALJ found that Ecker is an authorized provider, and that Ecker’s treatment is reasonably necessary to cure or relieve the effects of the industrial injuries. Therefore, the ALJ held the respondent is liable for Ecker’s treatment.
The ALJ also determined that the respondent received medical bills from Ecker in the amount of $550 which remained unpaid through March 26, 1996. Further, the ALJ found that on February 13, 1996, the respondent received a request from the claimant for mileage reimbursement in the amount of $101.69, and that the respondent did not pay the mileage reimbursement until March 25, 1996. The ALJ determined that the respondent’s failure to pay Ecker’s bills and the mileage reimbursement within thirty days of the date the bills were received violated the Rules of Procedure, Part XVI(K), 7 Code Colo. Reg. 1101-3 at 80, and was “not objectively reasonable.” Therefore, the ALJ ordered the respondent to pay penalties under § 8-43-304(1), C.R.S. (1996 Cum. Supp.), at a rate of $50 per day.
I.
We first reject the respondent’s argument that there is insufficient evidence in the record to support the ALJ’s finding that Ecker’s treatment is reasonable and necessary to cure or relieve the effects of the industrial injury. The respondent referred the claimant to Dr. Tyler who is a psychiatrist. Similar to Ecker’s assessment, Dr. Tyler diagnosed the claimant as suffering from a post-traumatic stress disorder secondary to the shooting incident, and recommended medication to treat the claimant’s depression. Dr. Tyler also recommended that the claimant continue counseling with Ecker.
Furthermore, the claimant testified that as a result of the shooting incident, he experiences difficulty sleeping and eating, is “afraid to go outside,” and is “scared to be around people.” (Tr. pp. 12-13). However, he stated that Ecker has “taught me ways of approaching my fears” and believes that his condition has improved as a result of Ecker’s counseling. (Tr. p. 13). Thus, the record amply supports the ALJ’s determination that Mr. Ecker’s treatment is reasonable and necessary to treat the compensable injuries, and the respondent’s further arguments to the contrary do not alter our conclusion.
II.
In its Petition for Review, the respondent also contends that the ALJ abused his discretion in assessing penalties for the respondent’s failure timely to pay Ecker’s bills and the mileage reimbursement. We agree, although for reasons other than those asserted by the respondent.
The law provides that an ALJ’s order constitutes an “abuse of discretion,” if, under the totality of the circumstances, the order “exceeds the bounds of reason.” Rosenberg v. Board of Education of School District #1, 710 P.2d 1095 (Colo. 1985). In determining whether the order exceeds the bounds of reason we may consider whether the order is supported by the applicable law. Coates, Reid Waldron v. Vigil, 856 P.2d 850
(Colo. 1993).
We have previously concluded that where the gravamen of the disputed conduct underlying the request for penalties is the failure to pay medical bills, the specific penalty provisions of § 8-43-401(2)(a), C.R.S. (1996 Cum. Supp.), supersede the general penalty provisions of § 8-43-304(1). See Malloy v. Lincoln Community Hospital, W.C. No. 4-148-045, September 13, 199 ; Sprueil v. Echols, W.C. No. 4-214-745, June 14, 199 ; Sears v. Penrose Hospital, W.C. No. 4-145-608, May 14, 199 ; Christensen v. International Ventures, W.C. No. 4-170-716, July 7, 1995; Glover v. Pro-Vin Enterprises, Inc., W.C. No. 4-160-452, May 26, 1995. The rationale for these decisions is that § 8-43-401(2)(a) creates a specific penalty for willfully failing to pay medical benefits, and § 8-43-304(1) applies only where no other penalty “has been specifically provided” in the Workers’ Compensation Act. To hold otherwise would create the anomalous result that the willful failure to pay medical benefits under § 8-43-401(2)(a) would warrant a lesser penalty than penalties available under § 8-43-304(1) for the negligent failure to pay medical benefits.
Here, it is clear that the claimant requested, and the ALJ assessed penalties in connection with the respondent’s failure timely to pay Ecker’s bill and the request for mileage reimbursement. Furthermore, the respondent concedes that the mileage incurred by the claimant incidental to obtaining medical treatment is a compensable medical benefit. See Sigman Meat Co. v. Industrial Claim Appeals Office, 761 P.2d 265
(Colo.App. 1988). It follows that the penalty claim is governed by the provisions in § 8-43-401(2), and it was an abuse of discretion for the ALJ to impose penalties under §8-43-304(1).
Moreover, we conclude that the ALJ’s findings of fact are insufficient to ascertain whether the respondent is subject to penalties under the applicable law. In relevant part, §8-43-401(2)(a) provides that:
“If any insurer or self-insured employer willfully
delays payment of medical benefits for more than thirty days or willfully stops payments such insurer or self-insured employer shall pay a penalty to the division of eight percent of the amount of wrongfully withheld benefits.” (Emphasis added).
As we have previously stated, the term “willful” means actions resulting from “deliberate intent” rather than “thoughtlessness, forgetfulness, or mere negligence.” See Bennett Properties Co. v. Industrial Commission, 165 Colo. 135, 437 P.2d 548 (1968); Wolfe v. Imperial Cabinets, Inc., W.C. No. 4-158-041, July 12, 1994; Glover v. Pro-Vin Enterprises, Inc., supra. Furthermore, the term “wrongfully” means “unlawful” or “unjust.” Sears v. Penrose Hospital, supra. Consequently, the respondent is not subject to penalties under § 8-43-401(2) absent a finding that the respondent’s delay or failure to pay the disputed medical benefits was deliberate and unlawful.
Here, the ALJ made no finding of fact concerning whether the respondent’s failure to pay the disputed medical benefits was deliberate or unlawful. Rather, because the ALJ erroneously determined that the penalty claim was governed by §8-43-304(1), his findings of fact concern the legal standard for claims seeking penalties under § 8-43-304(1). See Pueblo School District No. 70 v. Toth, ___ P.2d ___ (Colo.App. No. 95CA0189, January 25, 1996) Colorado Compensation Insurance Authority v. Industrial Claim Appeals Office, 907 P.2d 676
(Colo.App. 1995). However, the ALJ’s determination that the respondent’s actions were “not objectively reasonable” is insufficient to ascertain whether the ALJ found that the respondent’s failure to pay the disputed benefits was deliberate and unlawful. Consequently, we must remand the matter to the ALJ for additional findings of fact and a new order on the issue.
As a result of our disposition, the respondent’s remaining arguments concerning the ALJ’s application of § 8-43-304 are moot. Moreover, it is also premature to consider the respondent’s contention that the ALJ miscalculated the amount of the penalty. However, we note that § 8-43-401(2)(a) only allows the ALJ to impose a penalty equal to “eight percent” of the amount medical benefits wrongfully withheld. Therefore, we agree with the respondent that the ALJ’s imposition of penalties at the rate of “$50.00 per day” is inconsistent with the applicable law.
III.
Lastly, the respondent argues that the ALJ erred in hearing the penalty claim because the claimant failed to comply with § 8-43-304(4), C.R.S. (1996 Cum. Supp.), which requires that the party seeking penalties “state with specificity the grounds on which the penalty is being asserted.” However, in view of our conclusion that § 8-43-304 is not applicable, the claimant was not required to comply with subsection 8-43-304(4). Therefore, even if we assume, that the claimant did not “state with specificity” the grounds for his claim, the ALJ was not precluded from hearing the issue.
Moreover, even if we construe the respondent’s argument as an assertion that the respondent was denied adequate notice of the issues to be heard, we would not conclude that the ALJ committed reversible error in proceeding to hear the claim. Admittedly, the respondent’s Response to the Application for Hearing listed the claimant’s failure to comply with §8-43-304(4) as a defense, and the respondent restated this defense at the commencement of the hearing. (Tr. p. 4). However, the respondent did not indicate any surprise by the claimant’s presentation of evidence concerning the respondent’s failure to pay the disputed medical bills, and did not request a continuance. Under these circumstances, the respondent waived any objection to the ALJ’s consideration of the penalty issue Robbolino v. Fischer-White Contractors, 738 P.2d 70
(Colo.App. 1987).
IT IS THEREFORE ORDERED that the ALJ’s order dated April 5, 1996, is set aside insofar as it requires the respondent to pay penalties, and the matter is remanded to the ALJ for a new order on the issue of penalties consistent with the views expressed herein.
IT IS FURTHER ORDERED that the ALJ’s order is affirmed in all other respects.
INDUSTRIAL CLAIM APPEALS PANEL
____________________________________ David Cain
____________________________________ Kathy E. Dean
NOTICE
This Order is final unless an action to modify or vacate this Order is commenced in the Colorado Court of Appeals, 2 East 14th Avenue, Denver, CO 80203, by filing a petition for review with the court, with service of a copy of the petition upon the Industrial Claim Appeals Office and all other parties, within twenty (20) days after the date this Order is mailed, pursuant to section 8-43-301(10) and 307, C.R.S. (1996 Cum. Supp.).
Copies of this decision were mailed October 2, 1996 to the following parties:
Jerrell Brown, 38 CR 1740, Farmington, NM 87401
Durango Transportation, P.O. Box 1445, Durango, CO 81302-1445
Gail Harriss, Esq., 572 E. Third Ave., Durango, CO 81301 (For the Claimant)
Phil Snyder, Esq. Jeffrey Deitch, Esq., P.O. Box 2113, Durango, CO 81302 (For the Respondent)
Special Funds Unit, Attn: Barbara Carter (Interagency Mail)
Employer Compliance Unit, Attn: Rebecca Greben (Interagency Mail)
BY: _______________________