W.C. No. 4-154-741Industrial Claim Appeals Office.
December 24, 1997
FINAL ORDER
The respondents and the claimant separately petitioned for review of an order of Administrative Law Judge Erickson (ALJ). The respondents contend that the ALJ erred insofar as he assessed penalties against the Colorado Compensation Insurance Authority (CCIA) for denying preauthorization of medical treatment in violation of the Rules of Procedure, Part XVI(J), Code Colo. Reg. 1101-3 at 79 [amended November 30, 1996]. The claimant contends that the ALJ erred in denying his claim for temporary disability benefits. We affirm.
The claimant sustained a compensable injury on November 13, 1992, and subsequently underwent a cervical fusion. Dr. Ferguson, the treating physician, placed the claimant at maximum medical improvement (MMI) on January 7, 1994, with 15 percent impairment of the whole person. Dr. Ferguson also imposed permanent medical restrictions which precluded the claimant from returning to his regular employment. The respondents subsequently filed a Final Admission of Liability which terminated temporary disability benefits, and admitted liability for permanent medical impairment benefits consistent with Dr. Ferguson’s impairment rating.
In September 1995, the respondents authorized further treatment from Dr. Norrgran. Following an unsuccessful course of physical therapy, Dr. Norrgran recommended additional surgery. On January 5, 1996, Dr. Norrgran requested preauthorization for the surgery. The CCIA denied preauthorization in a written notice dated, January 18, 1996. The notice indicated that the denial was based upon a memo from Debra Mill Getz, a nurse with CCIA. Nurse Getz recommended that authorization be denied and that the CCIA obtain an independent medical examination (IME).
On January 26, 1996, the claimant requested an order imposing penalties against the CCIA for failing to comply with the requirements of Rule XVI(J), in denying preauthorization for the surgery. The CCIA subsequently obtained an IME from Dr. Fried. On March 4, 1996, the CCIA issued a notice indicating that preauthorization for surgery was denied until Dr. Norrgran obtained EMG and flexion/extension X-rays as recommended by Dr. Fried.
Eventually the CCIA authorized the surgery which was performed by Dr. Norrgran on August 20, 1996. The CCIA also voluntarily reinstated temporary disability benefits effective August 20, 1996.
The ALJ found that Dr. Ferguson did not retract his determination that the claimant reached MMI on January 7, 1994, and no subsequent physician opined that the claimant was not at MMI between September 15, 1995 and August 20, 1996. Therefore, the ALJ determined that he was precluded from awarding temporary disability benefits for the period September 15, 1995, to August 20, 1996.
The ALJ also found that the CCIA’s January 18, 1996 denial of preauthorization did not comply with Rule XVI(J). Insofar as pertinent, Rule XVI(J)(1)(a), provides that where the insurer seeks to deny prior authorization for a requested service, the insurer must do the following within fourteen business days:
“(1) Have the request reviewed by a medical professional with knowledge and expertise in the contested area; and
(2) Furnish the provider and the parties with a written denial setting forth the following information:
(a) An explanation of the specific medical reasons for the denial;”
The ALJ found that the CCIA did not provide an explanation of the “specific medical reasons” for the denial until March 4, 1996. Consequently, the ALJ determined that the CCIA violated Rule XVI(J) and imposed a penalties at the rate of $200 per day for the period January 27, 1996, through March 4, 1996.
I.
On review the respondents concede the CCIA was required to comply with Rule XVI(J). However, they contend that the CCIA complied with the rule by transmitting the memo of nurse Getz on January 18. Specifically, the respondents contend that, because nurse Getz recommended an IME, the reason for the CCIA’s denial was “implicitly” a request for a second medical opinion concerning the reasonableness of the proposed surgery.
Further, the respondents contend that Rule XVI(J)(1)(a)(1) is not intended to subject an insurer to penalties for seeking a second opinion. Therefore, they argue that the ALJ interpreted Rule XVI(J) too narrowly. We reject these arguments.
We agree with the respondents that Rule XVI(J) is not intended to punish an insurer for seeking a second medical opinion concerning the medical necessity of a particular treatment. In fact, Rule XVI(J)(1)(a)(1) requires the insurer to have a request for preauthorization reviewed by a “medical professional with knowledge and expertise” in the relevant area of medicine.
However, Rule XVI(J) is designed to prevent the insurer from unreasonably delaying treatment by limiting the time period during which the insurer must review the request. We agree with the respondents’ assertion that it would be difficult if not impossible to request and complete an IME within 14 business days. Consequently, we do not read the term “review by a medical professional” as requiring an actual IME. In fact, it is the “request” for preauthorization which is to be examined not the claimant. Nevertheless, because a recommendation for an IME is not a “review” by a medical professional, nor an explanation “of the specific medical reasons” for a denial of preauthorization, the ALJ could reasonably infer that the CCIA’s request for an IME was insufficient to meet the “medical reasons” requirement of Rule XVI(J).
Alternatively, the respondents contend that even if the CCIA violated Rule XVI(J), it was not subject to penalties under the applicable legal standard. In so doing, the respondents do not contest the ALJ’s determination that the penalty issue is governed by § 8-43-304(1), C.R.S. 1997.
Under § 8-43-304(1), the ALJ may impose penalties against an insurer who violates a procedural rule. Pueblo School District No. 70 v. Toth, 924 P.2d 1094 (Colo.App. 1996). The imposition of penalties under this statute is governed by the objective standard of negligence, which in turns depends on how a reasonable insurer would have acted under the circumstances Pueblo School District No. 70 v. Toth, supra. The reasonableness of the insurer’s actions is judged by whether the actions were predicated on a rational argument based in law or fact. Diversified Veterans Corporate Center v. Hewuse, 942 P.2d 1312 (Colo.App. 1997).
Whether the CCIA violated Rule XVI(J), and whether the CCIA had a rational argument for its violation, are questions of fact for the ALJ. Diversified Veterans Corporate Center v. Hewuse, supra; Colorado Compensation Insurance Authority v. Industrial Claim Appeals Office, 907 P.2d 676 (Colo.App. 1995). Therefore, to the extent that the ALJ’s order is supported by substantial evidence, it must be upheld. Section 8-43-301(8), C.R.S. 1997.
The memo from nurse Getz recommends that, based upon her “review of the file,” preauthorization for further surgery be denied. However, as found by the ALJ, the memo does not contain any explanation of the specific medical reasons for the denial.
The memo also cites the requirements of Rule XVI(J)(1), and “strongly” recommends that the CCIA obtain an IME from a neurosurgeon for the purpose of complying with Rule XVI(J)(1)(a)(1). Under these circumstances, the memo supports an inference that the recommendation for an IME was not for purposes of determining the medical necessity of surgery, but rather, to fulfill the requirements of Rule XVI(J)(1)(a)(1). In other words, the reason nurse Getz recommended preauthorization be denied was not the absence of an IME. Therefore, the record supports the ALJ’s finding that the CCIA violated Rule XVI(J)(1)(a)(2)(a).
As found by the ALJ, nurse Getz’s memo also concedes she is not a “medical professional with knowledge and expertise in the contested area,” for purposes of meeting the requirements of Rule XVI(J)(1)(a)(1). Accordingly, the ALJ could, and did, reasonably infer that, insofar as the CCIA relied upon the memo from nurse Getz to assert that they complied with Rule XVI(J), its actions were not based upon a rational argument.
The respondents also assert that they informed all parties of the medical reasons for their denial on January 26, 1996. Therefore, the argue that they are not subject to penalties between January 26, 1996 and March 4, 1996.
We are unable to locate any evidence in the record, and the respondents do not cite any specific evidence, of a written notice dated January 26, 1996, which explains the reasons for their denial of preauthorization. Consequently, the respondents have failed to establish grounds which afford us a basis to interfere with the ALJ’s assessment of penalties.
II.
Concerning temporary disability benefits, the claimant concedes that he reached MMI on January 7, 1994. However, he contends that Dr. Norrgran’s recommendation for further treatment inherently reflects her opinion that the claimant suffered a worsening of condition and was no longer at MMI by September 15, 1995. Furthermore, the claimant points out that, in October 1995, Dr. Reiter imposed medical restrictions which precluded him from performing his regular employment. Under these circumstances, the claimant asserts that he is entitled to the reinstatement of temporary disability benefits effective September 15, 1995. We disagree.
Temporary disability benefits terminate at MMI. Golden Animal Hospital v. Horton, 897 P.2d 833 (Colo. 1995). MMI exists when the claimant’s condition has stabilized and “no further treatment is reasonably expected to improve the condition.” Section 8-40-201(11.5), C.R.S. 1997. However, an injured worker may reach MMI and yet require additional medical care to maintain MMI or prevent further deterioration of his condition. Grover v. Industrial Commission, 759 P.2d 705 (Colo. 1988). It follows that a claimant’s request for further treatment, and the respondents’ authorization of additional treatment after MMI, does not compel a conclusion that the claimant is not at MMI.
In this case, Dr. Norrgran’s recommendation for additional treatment might support an inference that the claimant suffered a worsening of condition and was no longer at MMI. However, such an inference is not required. To the contrary, it is equally possible that Dr. Norrgran recommended additional treatment, including further surgery, to maintain or prevent a deterioration of the claimant’s condition.
Furthermore, as found by the ALJ, neither Dr. Norrgran nor Dr. Reiter expressly opined that the claimant was not at MMI between September 15, 1995 and August 20, 1996. Under these circumstances, the ALJ could, and did, find that the claimant failed to sustain his burden to prove that he was not at MMI between September 15, 1995, and August 20, 1996.
In view of our disposition, we need not consider the respondents’ arguments on the issue of temporary disability benefits.
Lastly, we have considered the claimant’s reply brief on the issue of temporary disability, and the claimant’s arguments do not alter our conclusions. Therefore, we grant the claimant’s “Motion for Permission to File Reply Brief” and deny the respondents’ “Motion to Strike Claimant’s Reply Brief.”
IT IS THEREFORE ORDERED that the ALJ’s order dated January 9, 1997, is affirmed.
IT IS FURTHER ORDERED that the claimant’s “Motion for Permission to File Reply Brief” is granted, and the respondents’ “Motion to Strike Claimant’s Reply Brief” is denied.
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. 1997.
Copies of this decision were mailed December 24, 1997 to the following parties:
Mike J. Isom, 4570 Raleigh, Denver, CO 80212
Wheat Ridge Painting Co., 8222 W. 38th Pl., Wheat Ridge, CO 80033-4430
Colorado Compensation Insurance Authority, Attn: Laurie A. Schoder, Esq. (Interagency Mail)
Subsequent Injury Fund — Interagency Mail
Timothy Quinn, Esq., 3515 S. Tamarac Dr., Ste. 200, Denver, CO 80237-1430 (For the Claimant)
Thomas E. J. Hazard, Esq., 1700 Broadway, Ste. 1700, Denver, CO 80290-1701 (For the Respondents)
By: _______________________________