W.C. No. 3-101-431.Industrial Claim Appeals Office.
November 4, 1999.
FINAL ORDER.
The respondents seek review of a final order of Administrative Law Judge Friend (ALJ) which awarded temporary disability benefits and assessed penalties against the insurer for violation of the rules of procedure governing the termination of temporary disability benefits. We affirm the order in part, set it aside in part, and remand for entry of an additional order.
This matter was before us previously. Our Order of Remand dated August 26, 1997, contains an extensive statement of the facts. That statement is incorporated herein. Our order directed the ALJ to determine whether the insurer violated former Rule of Procedure IX (C) (1) (a), 7 Code Colo. Reg. 1101-3 at 34. [amended October 1, 1996, 19 C.R. 11], and if so, whether the violation was explained by a rational argument based in law or fact. We also directed the ALJ to determine whether the insurer violated former Rule of Procedure IV (G) (1), 7 Code Colo. Reg. 1101-3 at 6, [amended October 1, 1996, 19 C.R. 11] because it failed to take a position concerning permanent partial disability benefits at the time it terminated temporary disability benefits. Finally, we directed the ALJ to determine whether the treating physician “changed his position that the claimant reached MMI [maximum medical improvement] on December 14, and if so, whether the change occurred prior to the initiation of the IME procedure.”
On remand, the ALJ determined that the insurer’s November 11, 1994, general admission of liability was predicated on a note dated October 31, 1994, which was authored by Laverne Kendrick. Kendrick was a nurse employed by the treating physician providing primary care, Dr. Moore. The ALJ found the note stated the claimant was referred to Dr. Voelkel, that no further injections were warranted, and the claimant “needed a rating.” The ALJ further found that the “note did not state that the claimant reached maximum medical improvement.”
Consequently, the ALJ concluded the insurer violated Rule IX (C) (1) (a) because the November 11 admission of liability, which terminated temporary disability benefit without a hearing, was not accompanied by a “medical report from the authorized treating physician stating the claimant has reached maximum medical improvement.” Instead, the admission was “accompanied by a note from a nurse in the authorized treating physician’s office.” The ALJ further determined there was no “rational basis in fact or law” for this violation of Rule IX.
The ALJ next determined that the insurer took “no position on permanent disability benefits at the time it terminated temporary disability benefits.” The ALJ concluded that the failure to take a position concerning permanent disability violated Rule IV (G) (1), and the insurer presented no rational argument based in law or fact which would justify the violation. Under these circumstances, the ALJ imposed a penalty of $1.00 per day for violation of Rule IX, and $1.00 per day for violation of Rule IV, from October 31, 1994 to April 18, 1996. The total penalty was $1070.
The ALJ next determined that Dr. Moore issued a report placing the claimant at MMI on December 14, 1994, but issued a conflicting report dated January 9, 1995. The ALJ resolved the conflict and found that Dr. Moore was of the opinion that the claimant was not at MMI. The ALJ concluded that because the respondents did not initiate their request for a Division-sponsored Independent Medical Examination (IME) until February 2, 1995, which was after Dr. Moore issued the conflicting reports, the respondents were not entitled to a Division-sponsored IME for purposes of challenging the treating physician’s opinion on MMI. Thus, the ALJ ordered the respondents to pay temporary total disability benefits commencing October 31, 1994, until terminated pursuant to law.
I.
On review, the respondents first contend the ALJ erred in assessing penalties based on the insurer’s violation of Rule IX and Rule IV. Concerning the alleged violation of Rule IX, the respondents rely on evidence that Dr. Moore predicted the claimant would reach MMI in March 1994, that a physical therapist placed the claimant at MMI in September 1994, and nurse Kendrick’s note of October 31, 1994. The respondents assert that this evidence created a “good faith belief” by the insurance adjuster that the claimant reached MMI by October 31, 1994. In any event, the respondents assert the insurer continued to pay benefits at the temporary total disability rate, even though the benefits were admitted as an advance against permanent disability benefits. We are not persuaded by these arguments.
As noted in our prior order, former Rule IX (C) (1) (a) permits termination of temporary disability without a hearing in cases where the insurer files an admission of liability together with “a medical report from the authorized treating physician who has provided the primary care stating the claimant has reached maximum medical improvement.” The rule goes on to provide that the admission must “state a position on permanent disability benefits as provided in Rule IV, G.”
Where, as here, a party seeks to impose penalties on an insurer under § 8-43-304(1), C.R.S. 1999, the party must prove that the insurer’s conduct in violating the rule was unreasonable based on an objective standard of negligence. Pueblo School District No. 70 v. Toth, 924 P.2d 1094 (Colo.App. 1996). The reasonableness of the insurer’s conduct depends upon whether its actions were predicated on a rational argument based in law or fact. Determination of this issue is one of fact for the ALJ. See Diversified Veterans Corporate Center v. Hewuse, 942 P.2d 1312
(Colo.App. 1997).
Here, the evidence supports the ALJ’s determination that the insurer’s action in terminating the claimant’s benefits was not based on any reasonable legal or factual argument. Although Dr. Moore indicated in early 1994 that he expected the claimant to reach MMI by March, the ALJ explicitly found that in March Dr. Moore changed his mind and referred the claimant for additional treatment. (Finding of Fact 3). Further, the ALJ was certainly not required to find that the opinion of a physical therapist or the treating physician’s nurse constituted “a medical report from the authorized treating physician who provided the primary care.” Although the insurance adjuster may have believed the claimant was at MMI in October 1994, the ALJ plausibly concluded that such a belief did not excuse the adjuster from complying with the explicit requirements for documentation set forth in Rule IX (C) (1) (a). See Monfort Transportation v. Industrial Claim Appeals Office, 942 P.2d 1358 (Colo.App. 1997). Neither can the reasonableness of the insurer’s action in terminating temporary benefits in the November 11 general admission be judged by evidence that Dr. Moore subsequently issued a report placing the claimant at MMI.
Insofar as the respondents assert that the insurer did not violate the rule because it continued to pay benefits at the temporary total disability rate, we find no error in the award of penalties. Indeed, the respondents’ position appears to be contrary to their own November 11 admission of liability which alleges the claimant reached MMI on October 31, 1994, terminated temporary total disability benefits on October 31, 1994, and stated the respondents are “paying advanced ppd while waiting division IME.” We see no basis for departing from our prior conclusion that the continued payment of benefits constituted a mitigating factor, but does not excuse the respondents’ unilateral termination of temporary disability benefits which unreasonably shifted the burden to the claimant to initiate litigation to dispute the insurer’s action. See Order of Remand, pp. 5-6. We consider the respondents’ remaining arguments of this issue to be without merit.
Respondents next contend the ALJ failed to make adequate findings of fact concerning whether or not the insurer had a reasonable basis for failing to comply with Rule IV (G). The respondents rely on testimony of the insurance adjuster that the failure to obtain a medical impairment rating, and hence to admit in accordance with the rating, was a product of an agreement with the claimant to delay the rating process until the claimant was no longer pregnant. (Tr. p. 62). We remand for entry of specific findings of fact on this issue.
We may set aside an ALJ’s order where the findings of fact are insufficient to permit appellate review. Section 8-43-301(8), C.R.S. 1999. Although an ALJ is not held to a standard of absolute clarity in expressing findings of fact, the findings should not be stated in a purely conclusory form which affords no meaningful basis to review the findings. Womack v. Industrial Commission, 168 Colo. 364, 451 P.2d 761 (1969).
Here, the adjuster’s testimony, if credited, might support the inference that the claimant waived her rights under Rule IV (G) and agreed to delay the determination of permanency until such time as she was no longer pregnant. In such case, the insurer would have a rational argument based in fact and law that it did not violate Rule IV.
The ALJ did not make any specific finding concerning the adjuster’s testing. Neither did the ALJ articulate the evidentiary basis for his determination that the respondents’ violation of Rule IV (G) was not premised on a rational argument in law or fact. Under these circumstances, that portion of the ALJ’s order which awarded penalties of $535 for violation of Rule IV (G) must be set aside and the matter remanded for entry of a new order. The ALJ shall make explicit findings of fact determining whether the insurer presented credible testimony establishing the reason for its failure to admit for permanent disability benefits when it filed the November 11 admission. In reaching this determination we should not be understood as expressing any opinion concerning the credibility of the evidence or the inferences to be drawn therefrom.
II.
The respondents next contend the ALJ erred in awarding temporary disability subsequent to April 4, 1995, the date on which the Division-sponsored IME physician placed the claimant at MMI. The respondents argue they initiated the Division IME request on February 2, 1995, prior to receiving Dr. Moore’s January 9, 1995, report, which stated the claimant was not at MMI. The respondents assert their right to request a Division IME was triggered by Dr. Moore’s prior report placing the claimant at MMI on December 14, 1994. We find no error.
Under the version of § 8-42-107(8)(b), C.R.S. 1995 [amended in 1996], applicable to this determination of MMI, it is the primary care physician’s “finding” of MMI which triggers the parties right to dispute the determination and request an IME. Respondents are not entitled to initiate a request for an IME for the purpose of contesting the treating physician’s “finding” that the claimant has not reached MMI. Aren Design, Inc. v. Becerra, 897 P.2d 902
(Colo.App. 1995). Further, where the authorized treating physician issues conflicting or ambiguous reports concerning whether or not the claimant is at MMI, the ALJ may resolve the conflict without requiring the claimant to undergo an IME. Blue Mesa Forest v. Lopez, 928 P.2d 831 (Colo.App. 1996). Thus, where conflicting evidence exists, the question of whether the treating physician has made a “finding” of MMI is one of fact. It is only where the treating physician changes his opinion concerning MMI after the IME procedure has been initiated that the ALJ loses authority to resolve the factual issue and the Division IME’s opinion concerning MMI becomes binding unless overcome by clear and convincing evidence. Postlewait v. Midwest Barricade, 905 P.2d 21 (Colo.App. 1995); Sierra v. Colorado Seal Stripe, Inc.,
W.C. No. 4-125-387 (February 20, 1997).
Here, by January 9, 1998, Dr. Moore had issued conflicting opinions concerning whether or not the claimant was at MMI. Therefore, the respondents did not initiate the IME process by the time the authorized treating physician providing primary care created a question of fact as to whether the claimant was indeed at MMI. Under these circumstances, determination of the true opinion of the treating physician was a matter of fact for resolution by the ALJ, and the respondents were not entitled to preempt the treating physician’s opinion by requesting an IME Aren Design, Inc. v. Becerra, supra.
It is true that the conflict in Dr. Moore’s opinion did not come to the respondents’ attention until after they requested the IME. However, the respondents were not compelled to proceed with the Division IME prior to seeking a determination of Dr. Moore’s actual opinion, and did so at the risk the ALJ would find Dr. Moore did not believe the claimant was at MMI. Thus, there was no error in the ALJ’s order.
III.
The respondents next contend the ALJ erred in awarding any temporary disability benefit after October 31, 1994. The basis of this contention is that in the ALJ’s prior order of May 1, 1996, the claimant’s right to collect benefits was suspended until the claimant appears for an examination by Dr. Feinsinger.
We note that the portion of the ALJ’s order which suspended the claimant’s right to collect benefits was not the subject of the claimant’s petition to review the May 1, 1996, order. Consequently, although we set aside the ALJ’s May 1 order, our Order of Remand was not intended to interfere with the suspension aspect of the ALJ’s order. Consequently, we conclude that the portion of the May 1 order imposing a suspension remains in effect.
However, insofar as there is a dispute concerning the effect of the ALJ’s order of suspension, the parties must submit the issue to the ALJ. We decline to hold as a matter of law that the ALJ intended to suspend the claimant’s right to receive benefits which accrued prior to the time the claimant engaged in the conduct which caused the suspension.
IT IS THEREFORE ORDERED that the ALJ’s order dated May 28, 1999, is set aside insofar as it imposed penalties based on the insurer’s alleged violation of Rule IV (G). The matter is remanded for entry of a new order on this issue which is consistent with the views expressed herein.
IT IS FURTHER ORDERED that the ALJ’s order is otherwise affirmed.
INDUSTRIAL CLAIM APPEALS PANEL
_____________________________ David Cain
_____________________________ Kathy E. Dean
NOTICE This Order is final unless an action to modify or vacate theOrder is commenced in the Colorado Court of Appeals, 2 East 14thAvenue, Denver, Colorado 80203, by filing a petition to reviewwith the court, with service of a copy of the petition upon theIndustrial Claim Appeals Office and all other parties, withintwenty (20) days after the date the Order was mailed, pursuant to§§ 8-43-301(10) and 307, C.R.S. 1999.
Copies of this decision were mailed November 4, 1999 to the following parties:
Wendy Brownson-Rausin, 511 W. 26th St., Rifle, CO 81650.
Valley View Hospital, 1906 Blake Ave., Glenwood Springs, CO 81601.
Colorado Hospital Association Trust, — Support Services, Inc., Attn: Sharon Thompson, P.O. Box 3513, Englewood, CO 80155-3513.
Thomas D. Hacker, Esq., 3773 Cherry Creek Drive North, #575, Denver, CO 80209, (For Claimant).
David J. Dworkin, Esq., 3900 E. Mexico Ave., #1300, Denver, CO 80210 (For Respondents).
BY: A. Pendroy