W.C. No. 3-101-431Industrial Claim Appeals Office.
August 26, 1997
ORDER OF REMAND
The claimant seeks review of a final order of Administrative Law Judge Friend (ALJ), insofar as it denied her claim for temporary total disability benefits subsequent to April 4, 1995, and denied imposition of penalties based on the respondent-insurer’s allegedly improper termination of temporary total disability benefits. We set the order aside and remand for entry of a new order.
The claimant sustained compensable injuries to her back in September 1991. In 1994, the authorized treating physician providing primary care was Dr. Moore. Early in 1994, Dr. Moore issued two reports indicating that he expected the claimant to reach maximum medical improvement (MMI) in March 1994.
However, Dr. Moore examined the claimant on March 15, 1994, and opined that she might be suffering from reflex sympathetic dystrophy (RSD). Therefore, Dr. Moore referred the claimant to another physician for sympathetic nerve blocks, and prescribed physical therapy. The claimant apparently underwent the physical therapy and received at least one injection in 1994.
The claimant did not see Dr. Moore again until October 1994. The ALJ found that, at this time, Dr. Moore believed the claimant should undergo further injections, but declined to require them since the claimant was pregnant. The ALJ also found that Dr. Moore referred the claimant to Dr. Voelkel.
The events following this examination are the subject of much controversy. The ALJ found that, on October 31, 1994, the respondent-insurer received a copy of a letter dated October 13, 1994. This letter was authored by a rehabilitation counselor and sent to Dr. Moore. The letter inquired whether or not the claimant had reached MMI.
The October 13 letter reflects a handwritten notation stating that the claimant was referred to Dr. Voelkel, that no further injections were appropriate, and that the claimant needed a “rating.” The ALJ found that these notations were made by Ms. Kendrick, a registered nurse who worked in Dr. Moore’s office. The ALJ further found that the respondents then filed several “general admissions” terminating temporary disability benefits on October 31, 1994, and advancing permanent partial disability at the temporary disability rate.
On December 6, 1994, a legal assistant representing counsel for the respondents sent a letter to Dr. Moore requesting him to complete a “Physician’s Report of Maximum Medical Improvement and Impairment Form.” The ALJ found that Ms. Kendrick made a written notation on the letter inquiring whether the claimant was at MMI, and passed the letter to Dr. Moore. Despite a conflict in the testimony between Dr. Moore and Ms. Kendrick, the ALJ found that Dr. Moore wrote the word “yes” beneath the question concerning MMI. The accompanying form indicates that the claimant reached MMI on December 14, 1994.
The ALJ further found that on January 9, 1995, Dr. Moore’s office issued another report indicating that the claimant wa not at MMI. Dr. Moore reiterated this opinion in a deposition taken on April 5, 1995.
At some point, the respondents requested a Division-sponsored independent medical examination (IME) on the issues of MMI and permanent impairment. The record reflects that the “IME Examiner’s Information Sheet” was sent to the IME physician on February 27, 1995. The IME physician examined the claimant on April 4, 1995, and issued a report dated June 1, 1995. In this report, the IME physician opined that the claimant reached MMI on April 4, 1995, and that no further treatment was likely to improve the claimant’s pain complaints.
Concerning temporary disability benefits, the ALJ concluded that “Dr. Moore’s office has indicated in writing” that the claimant reached MMI on December 14, 1994. Further, the ALJ determined that the insurer “disputed” that determination, and thus, requested the Division-sponsored IME. Finally, the ALJ concluded that the IME physician’s determination that the claimant reached MMI on April 4, 1995, was not overcome by clear and convincing evidence. Therefore, he awarded temporary total disability benefits to April 4, 1995.
Further, the ALJ denied any claim for penalties against the respondents based on an improper termination of temporary total disability benefits. However, the ALJ made no specific factual findings beyond those previously mentioned, and no specific conclusions of law on this issue.
I.
On review, the claimant first contends that the ALJ erred in failing to penalize the respondents for an improper termination of temporary disability benefits commencing October 31, 1994. The claimant asserts that the respondents violated former Rule of Procedure IX(C)(1)(a), 7 Code Colo. Reg. 1101-3 at 34, because Dr. Moore’s action in writing “yes” at the top of the December 6, 1994 report did not constitute a “medical report” for purposes of the rule. Moreover, the claimant asserts that the respondents violated former Rule of Procedure IV(G)(1), 7 Code Colo. Reg. 1101-3 at 6, because they took no position concerning the issue of permanent disability at the time they terminated temporary disability benefits. Finally, the claimant asserts that the respondents violated former Rule of Procedure IV(N)(1), 7 Code Colo. Reg. 1101-3 at 5.02, because their admission of liability did not make specific reference to the name of the physician and the date of the report which placed the claimant at MMI. We conclude that the ALJ’s findings of fact are insufficient to support appellate review as required by § 8-43-301(8), C.R.S. (1996 Cum. Supp.).
As a general matter, violation of a rule of procedure justifies the imposition of daily penalties under §8-43-304(1), C.R.S. (1996 Cum. Supp.). Pueblo School District No. 70 v. Toth, 924 P.2d 1094 (Colo.App. 1996). Further, imposition of penalties under this statute is governed by an objective standard of negligence based on how a reasonable insurer would have acted under the circumstances. Pueblo School District No. 70 v. Toth, supra. In turn, the reasonableness of the insurer’s action depends on whether the insurer’s actions were predicated on a rational argument based in law or fact. Diversified Veterans Corporate Center v. Hewuse, ___ P.2d ___ (Colo.App. No. 96CA0583, January 9, 1997).
Resolution of these issues is largely factual in nature. Thus, if the ALJ applies the correct legal standards, we must uphold the order if supported by substantial evidence in the record. Pueblo School District No. 70 v. Toth, supra.
However, the ALJ’s findings of fact must be sufficient to indicate the basis of the ALJ’s resolution of the pertinent legal issues. See Riddle v. Ampex Corp., 839 P.2d 489 (Colo.App. 1992).
Rule of Procedure IX(C)(1) concerns termination of temporary disability benefits by filing an admission of liability without a hearing, and governs injuries occurring on or after July 1, 1991. Subsection (a) provides that temporary disability benefits may be terminated by the filing of 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; provided such admission of liability shall state a position on permanent disability benefits as provided in Rule IV, G. This paragraph shall not apply in cases where vocational rehabilitation has been offered and accepted.”
Insofar as the claimant argues that the respondents violated Rule IX because Dr. Moore’s writing of the word “yes” on the December 6 letter is not a “medical report” within the meaning of the rule, we disagree. The claimant has cited no authority, and we are not aware of any, which requires that a “medical report” be in any specific form. Rather, the case law indicates that a “medical report” is any written document, authored by a physician or other provider, which is relevant to an issue in dispute See Diversified Veterans Corporate Center v. Hewuse, supra Ackerman v. Hilton’s Mechanical Men, Inc., 914 P.2d 524
(Colo.App. 1996).
Here, nurse Kendrick’s testimony was sufficient to establish that Dr. Moore personally authored the determination of MMI found on the December 6, 1994 letter. While there was a conflict in the evidence, the ALJ resolved it against the claimant, and we may not interfere with that factual determination. Consequently, we reject the argument that the December 6 letter does not qualify as a “medical report” for purposes of terminating temporary disability benefits, and that the respondents violated Rule IX by treating it as one. The claimant next argues that, even if Dr. Moore’s notation on the December 6 letter constitutes a medical report, the report was issued after the respondents terminated temporary disability benefits effective October 31, 1994. Therefore, the claimant argues that the respondents violated Rule IX by terminating temporary disability benefits on October 31 (by the first admission filed in November 1994) because the respondents could not yet have possessed the December 1994 report.
In our view, the ALJ’s findings of fact are insufficient to permit appellate review of this issue. It does appear that the respondents terminated the claimant’s temporary disability benefits effective October 31, 1994. Further, the October 31 termination of benefits could not have been based on the December 1994 communication from Dr. Moore since the notation occurred after the termination. The ALJ’s finding that “Dr. Moore’s office” placed the claimant at MMI on December 14 tends to confirm this conclusion.
Under these circumstances, the matter must be remanded to determine whether the respondents violated Rule IX(C)(1)(a) by terminating the claimant’s temporary disability benefits in November 1994, effective October 31. The ALJ should determine whether the respondents in fact violated the rule. If so, the ALJ should also determine whether the violation had a rational basis in law or fact, and award or deny penalties accordingly.
Moreover, we agree with the claimant that the ALJ should determine whether the respondents violated Rule IV(G) by failing to take a position concerning permanent partial disability benefits at the time they terminated temporary benefits. See Monfort Transportation v. Industrial Claim Appeals Office,
___ P.2d ___ (Colo.App. 96CA2275, May 29, 1997). In this regard, we reject the respondents’ assertion that the claimant waived any argument based on Rule IV(G)(1) by failing to raise the rule before the ALJ. The claimant explicitly raised the issue of Rule IX. In turn, Rule IX(C)(1)(a) states that a termination of temporary benefits based on an admission of liability “shall state a position on permanent disability benefits as provided in Rule IV, G.” Thus, Rule IX explicitly incorporates Rule IV(G), and the respondents received adequate notice that this was an issue for hearing.
We also recognize the respondents’ assertion that the claimant was not “prejudiced” by the termination of temporary disability benefits because the insurer continued to pay benefits at the temporary total disability “rate” pending a determination of the degree of the claimant’s medical impairment. In our view, this fact may tend to mitigate any penalty which the ALJ might impose, but does not preclude a determination that the respondent-insurer violated the letter of the rule by terminating temporary benefits without first determining the claimant’s degree of impairment. Moreover, a unilateral termination of temporary disability benefits which does not comply with the rules places the onus of litigation on the claimant if the claimant wishes to dispute the type of benefits owed. Shifting the burden to the claimant is contrary to the statutory requirement that, once benefits are admitted, they must continue in accordance with admitted liability until terminated in accordance with law. Section 8-43-203(2)(d), C.R.S. (1996 Cum. Supp.); Monfort Transportation v. Industrial Claim Appeals Office, supra.
On remand, the ALJ shall make explicit findings of facts concerning whether or not the respondents violated Rule IX(C)(1)(a) and Rule IV(G)(1) in terminating the claimant’s temporary total disability benefits. If the ALJ finds that the respondents violated either rule, he shall determine whether the respondents had a rational argument based in law or fact which justified this action. If the ALJ determines that there was a violation, which was not reasonable, he shall impose penalties in accordance with the law.
II.
The claimant next challenges the ALJ’s conclusion that she was not entitled to ongoing temporary total disability benefits because the IME physician placed her at MMI on April 4. The claimant argues that MMI is determined in accordance with former § 8-42-107(8)(b), C.R.S. (1995 Cum. Supp.) [amended in 1996], and that the treating physician must place the claimant at MMI before “any party is allowed to have a Division IME.” Because the ALJ may have misapplied the law, we remand for entry of a new order on this issue.
Under former § 8-42-107(8)(b), the authorized treating physician who has provided the primary care makes the initial determination of whether the claimant has reached MMI. If either party “disputes” the authorized treating physician’s finding of MMI, then the IME procedure may be initiated to review the treating physician’s determination.
Under the plain language of this statute, the authorized treating physician’s “finding” of MMI is a prerequisite to either party seeking an IME under § 8-42-107(8)(b). Aren Design, Inc. v. Becerra, 897 P.2d 902 (Colo.App. 1995). Moreover, i Blue Mesa Forest v. Lopez, 928 P.2d 831 (Colo.App. 1996), it was recognized that an authorized treating physician may issue conflicting opinions concerning MMI prior to initiation of the IME procedure. In such circumstances, the question of whether the authorized treating physician has actually placed the claimant at MMI is one of fact for resolution by the ALJ, and the IME is not a prerequisite to that determination. It is only where a treating physician changes his opinion on MMI after the IME procedure has been initiated that the ALJ loses authority to resolve the factual dispute and is bound by the IME’s opinions. Postlewait v. Midwest Barricade, 905 P.2d 21 (Colo.App. 1995).
Here, there is some evidence that the authorized treating physician, Dr. Moore, placed the claimant at MMI on December 14, but changed his opinion by January 9, 1995. This change was underscored or supported by his deposition testimony. Moreover, there is evidence from which it may be inferred that the IME procedure was not initiated prior to the time Dr. Moore retracted his initial opinion that the claimant had reached MMI.
Under these circumstances, the matter must be remanded to the ALJ to determine whether Dr. Moore changed his opinion that the claimant reached MMI on December 14, and if so, whether that change occurred prior to the initiation of the IME procedure. It the ALJ finds that Dr. Moore did change his opinion, and that the change occurred prior to the initiation of the IME procedure, then the opinion of the IME physician concerning MMI is irrelevant since the authorized treating physician has not placed the claimant at MMI. Aren Design, Inc. v. Becerra, supra. The matter must be remanded to the ALJ for application of these principles and resolution of the pertinent factual issues.
III.
The claimant finally contends that the ALJ erred in permitting the testimony of nurse Kendrick. The claimant argues that Kendrick was not properly endorsed, and therefore, her testimony should have been excluded under the provisions of Rule of Procedure VIII(A)(6), 7 Code Colo. Reg. 1101-3 at 22. We reject this argument.
Rule of Procedure VIII(A)(6) provides as follows:
“A party may not produce a witness at a formal hearing who has not been listed in the application or response, or added by agreement or order, except to present rebuttal testimony or upon approval of the administrative law judge for good cause shown.”
The respondents argue, and we agree, that the testimony of Ms. Kendrick falls under the classification of “rebuttal testimony.” The following language from our decision in Fellini v. Atlas Roofing, W.C. No. 3-680-165 (July 27, 1992), is pertinent:
“However, `rebuttal’ normally refers to evidence presented by a proponent of the claim to refute evidence presented in the opponent’s case in chief. See Wigmore on Evidence, section 1873 (1976). Likewise, `surrebuttal’ would be presented by the opponent to refute that which was presented in rebuttal. This permits each party an opportunity to present evidence that may not have been anticipated or necessary in their case in chief.”
Here, the record reflects that the respondents attempted to call Ms. Kendrick during their case in chief. However, the respondents did not offer her testimony after the claimant objected that Kendrick was not properly endorsed. At that point, the claimant offered the deposition testimony of Dr. Moore. In the deposition, Dr. Moore testified that he was not the author of the December 6, 1994 statement that the claimant had reached MMI. The ALJ admitted the deposition over the respondents’ objection. (Tr. p. 109). The respondents again called Ms. Kendrick as a witness. At this juncture, the ALJ permitted her testimony on the grounds that it was “rebuttal” to Dr. Moore’s deposition. (Tr. p. 110).
Under such circumstances, the respondents were entitled to “surrebuttal” for purposes of refuting the deposition. Thus, Kendrick’s testimony was, in effect, rebuttal to Dr. Moore’s deposition testimony, and admissible under Rule of Procedure VIII(A)(6).
IT IS THEREFORE ORDERED that the ALJ’s order dated May 1, 1996 is set aside, and the matter is remanded for entry of a new order consistent with the views expressed herein.
INDUSTRIAL CLAIM APPEALS PANEL
______________________________ David Cain
______________________________ Kathy E. Dean
Copies of this decision were mailed August 26, 1997 to the following parties:
Wendy Brownson-Rausin, 200 W. 20th St., #B-6, Rifle, CO 81650
Valley View Hospital, 2140 S. Holly St., Denver, CO 80222-5602
Hospital Insurance Trust Services, Attn: Sharon Thompson, P.O. Box 22438, Denver, CO 80222
Thomas D. Hacker, Esq., 3773 Cherry Creek N. Dr., Ste. 575, Denver, CO 80209 (For the Claimant)
David J. Dworkin, Esq., 3900 E. Mexico, Ste. 1300, Denver, CO 80210 (For the Respondents)
By: _______________________________