W.C. No. 4-409-728Industrial Claim Appeals Office.
March 5, 2001
FINAL ORDER
The claimant seeks review of an order of Administrative Law Judge Gallegos(ALJ) insofar as the ALJ refused to impose penalties for the respondents’ violation of § 8-42-107.2(4), C.R.S. 2000. We affirm.
On January 21, 1999, the claimant suffered a compensable injury. The respondents filed a general admission of liability for the payment of temporary total disability benefits. On August 9, 1999, the claimant returned to full-time employment. Based upon the treating physician’s determination that the claimant reached maximum medical improvement (MMI) on August 24, 1999, the respondents filed a final admission of liability which terminated liability for medical benefits. The claimant timely objected and requested a Division-sponsored independent medical examination (IME).
On February 22, 2000, the IME physician, Dr. Gerber, opined the claimant was not at MMI and recommended further diagnostic studies including plain films of the lumbo-sacral spine with flexion and extension, and an MRI of the lumbo-sacral spine. Dr. Gerber also recommended the claimant receive counseling and/or a trial of anti-depressants.
Section 8-42-107.2(4) provides that:
“Within thirty days after the date of the mailing of the IME’s report, the insurer or self-insured employer shall either file its admission pursuant to section 8-43-203 or request a hearing before the division contesting one or more of the IME’s findings or determinations contained in such report.”
Upon receipt of the IME report, the respondents did not file an admission of liability or request a hearing to contest Dr. Gerber’s findings or determinations. Furthermore, the respondents did not authorize the treatment recommended by Dr. Gerber.
On May 10, 2000, the claimant applied for a hearing and requested penalties for the respondents’ failure to comply with §8-42-107.2(4). The claimant also requested an order requiring that the respondents provide the treatment recommended by the IME physician. A hearing was scheduled for August 16, 2000. At the commencement of the hearing the respondents, for the first time, agreed to “authorize” the treatment recommended by Dr. Gerber.
The ALJ ordered the respondents to file a general admission which states the claimant is not at MMI and admits liability for the medical treatment recommended by Dr. Gerber. The ALJ also determined the respondents violated § 8-42-107.2(4) and should be subject to penalties for the violation. However, the ALJ determined the claimant erroneously requested penalties under §8-43-304(1) at the rate of $500 per day instead of §8-43-401(2)(a), C.R.S. 2000, which creates a penalty equal to 8 percent of the amount of wrongfully withheld medical benefits. Under these circumstances, the ALJ denied and dismissed the claim for penalties.
On review the claimant contends the ALJ erroneously refused to impose penalties. In particular, the claimant contends the ALJ erred in finding the penalty claim was governed by §8-43-401(2)(a) instead of § 8-43-304(1).
For their part, the respondents contend the ALJ erroneously found they were required to comply with § 8-42-107.2(4). They argue the statute does not apply where, as here, the IME physician determined the claimant was not at MMI, but the IME physician’s determination does not require the reinstatement of temporary disability benefits. The respondents reason that under these circumstances, § 8-43-203 does not require the filing of an admission. We conclude the respondents violated § 8-42-107.2(4) by failing to file an application for hearing to contest Dr. Gerber’s determination that the claimant was not at MMI. Therefore, we do not reach the respondents’ contention that no admission was required by § 8-43-203.
MMI exists when the claimant’s condition is “stable and no further treatment is reasonably expected to improve the condition.” Section 8-40-201(11.5), C.R.S. 2000; Magnetic Engineering, Inc. v. Industrial Claim Appeals Office, 5 P.3d 385
(Colo.App. 2000). Dr. Gerber determined the claimant was not at MMI in the absence of further diagnostic testing to determine the nature and severity of the industrial injury, and a course of anti-depressants or counseling to address the psychological components of the injury. Thus, inherent in Dr. Gerber’s finding that the claimant is not at MMI, was his “determination” that additional treatment was necessary.
Section 8-42-107.2(4) provides that upon receipt of the IME physicians findings the insurer “shall” either file an admission consistent with the IME report or file an application for hearing to contest the IME physician’s “findings or determinations.” Thus, the statute mandated the respondents take action in response to the IME report.
Here, the respondents assert they did not dispute Dr. Gerber’s treatment recommendations. Had that been the case, the respondents should have provided authorization for the treatments, regardless of whether they were required to file an admission under § 8-43-203. However, it is undisputed that, prior to the penalty hearing, the respondents took no action to authorize or schedule the treatment and diagnostic testing recommended by Dr. Gerber. Under these circumstances, the respondents were necessarily “contesting” Dr. Gerber’s “findings or determinations” that the claimant required additional medical benefits to stabilize his condition and attain MMI. Cf. Story v. ICAO, 910 P.2d 80 (Colo.App. 1995) (request for change of physician to provide additional treatment to improve claimant’s condition is “constructive challenge” to treating physician’s determination of MMI. Consequently, § 8-42-107.2(4) required the respondents to request a hearing whether or not they were required to file an admission.
Evidence the respondents ultimately conceded liability for Dr. Gerber’s treatment recommendations does not alter the fact that they did not apply for a hearing within thirty days of the receipt of Dr. Gerber’s report. Therefore, the ALJ did not err in finding a violation of § 8-42-107.2(4).
However, we agree with the ALJ that the penalty claim is governed by § 8-43-401(2)(a), and perceive no error in the ALJ’s refusal to impose a penalty. Section 8-43-304(1), authorizes an ALJ to assess penalties up to $500 per day for each day the insurer violates any provision of the Workers’ Compensation Act” for which “no penalty has been specifically provided.”
Section 8-43-401(2)(a) creates a specific penalty for the failure timely to pay medical or permanent partial disability benefits. In pertinent part, the statute states 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 such wrongfully withheld benefit .”
The courts have held that the specific penalty provisions of § 8-43-401(2)(a) supersede the general penalty provisions of §8-43-304(1), where the gravamen of the disputed conduct relates to the failure to provide medical benefits. Holliday v. Industrial Claim Appeals Office, 997 P.2d 1212 (Colo.App. 1999), cert. granted May 15, 2000, 99SC742; Sears v. Penrose Hospital, 942 P.2d 1345
(Colo.App. 1997). 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 Act. In so doing, the courts have rejected the notion that the General Assembly intended to create two penalties for the late payment of medical expenses.
The issue in Holliday concerned whether or not the respondents were subject to penalties under § 8-43-304(1) where they failed to pre-authorize medical treatment in accordance with an order of a prehearing administrative law judge. The Holliday
court concluded that for purposes of § 8-43-401(2)(a) there was no difference between an insurer’s failure to authorize treatment and the failure to pay for treatment. To the contrary, both prevent the injured worker from obtaining necessary treatment at the employer’s expense. Id. at 1214.
In Sears v. Penrose Hospital, supra, the claimant argued the disputed conduct was not the failure to pay medical benefits, but the failure to investigate whether the medical treatment at issue was reasonable. Nevertheless, the court concluded the gravamen of the challenged conduct was the failure to pay medical benefits. The court reasoned that the underlying failure to investigate was necessarily encompassed in the broader question of whether the employer delayed the payment of medical benefits.
Here, the claimant contends that the gravamen of the challenged conduct is not limited to the respondents failure to authorize medical benefits, because, in the absence of MMI, the claimant may also be entitled to further temporary disability benefits. We are not persuaded.
We do not dispute that a temporarily disabled employee who is not at MMI may potentially receive temporary disability benefits. However, the claimant does not assert that the IME report required the respondents to reinstate temporary disability benefits. Therefore, the gravamen of the challenged conduct did not result in a denial of temporary disability benefits.
Further, we recognize the claimant’s contention the gravamen of the challenged conduct is the respondents’ failure to comply with a “procedural requirement” of the Act. However, the claimant also contends that the effect of the respondents’ misconduct was the delay of medical benefits. In other words, the alleged injury to the claimant involved a delay in authorization of medical benefits. Under these circumstances, the ALJ reasonably inferred the gravamen of the respondents’ failure to comply with §8-42-107.2(4) was the failure to provide medical benefits. Consequently, the ALJ correctly determined that the penalty claim is governed by § 8-43-401(2)(a).
We are mindful that Holliday is pending certiorari review on the question of whether the court of appeals erred in holding that violation of an order concerning the payment of medical benefits can only be penalized under § 8-43-401(2). (Emphasis in original). However, we are bound by published decisions of the Court of Appeals. C.A.R. 35(f). Therefore, unless and unti Holliday is modified or reversed, we are compelled to conclude that § 8-43-304(1) is not applicable where the gravamen of the challenged conduct is the failure to provide medical benefits. Consequently, the ALJ did not err in refusing to impose penalties under § 8-43-304(1). Moreover, this case, unlike Holliday, does not involve any alleged order violation. Thus, the result i Holliday may have no baring on the result here.
Finally, the Holliday court held that the amount of the penalty to be imposed under § 8-43-401(2)(a) for an insurer’s failure to authorize treatment may be established evidence of the cost of the proposed treatment. Id. at 1214. The claimant does not allege that he presented any evidence concerning the cost of the treatment recommended by Dr. Gerber, and we are unable to locate any such evidence in the record. Cf. Nova v. Industrial Claim Appeals Office, 754 P.2d 800 (Colo.App. 1988) (where the appellate record does not include a transcript it must be presumed the ALJ’s findings are supported by substantial evidence). Under these circumstances, the ALJ was not compelled to assess penalties under § 8-43-401(2)(a) because there is not evidence of the value of the withheld medical expenses.
IT IS THEREFORE ORDERED that the ALJ’s order dated September 26, 2000, is affirmed.
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, within twenty (20) days after the date this Order is mailed, pursuant to § 8-43-301(10) and § 8-43-307, C.R.S. 2000. The appealing party must serve a copy of the petition upon all other parties, including the Industrial Claim Appeals Office, which may be served by mail at 1515 Arapahoe, Tower 3, Suite 350, Denver, CO 80202.
Copies of this decision were mailed March 5, 2001 to the following parties:
Edwin Guerra, 22156 E. Princeton Circle, Aurora, CO 80018
Sears Roebuck Co., 630 W. 84th Ave., Thornton, CO 80260
Liberty Mutual Insurance Co., P. O. Box 168208, Irving, TX 75061
Pamela J. Adams Donnelly, Esq., 3515 S. Tamarac Dr., #200, Denver, CO 80237 (For Claimant)
David G. Kroll, Esq., 1120 Lincoln St., #1606, Denver, CO 80203 (For Respondents)
BY: A. Pendroy