W.C. No. 4-560-586.Industrial Claim Appeals Office.
November 17, 2005.
ORDER OF REMAND
The claimant and the respondents seek review of an order dated June 6, 2005 of Administrative Law Judge Martinez (ALJ) that ordered the respondents to pay penalties for their violation of Rule of Procedure XI, and that denied penalties for an alleged violation of Rule of Procedure XVI, for failing to attach a medical report to the final admission, and for attempting to dictate medical treatment in violation of § 8-43-503, C.R.S. 2005. We set aside that portion of the order denying penalties for the respondents’ alleged violation of Rule XVI and remand for further proceedings. We otherwise affirm the order.
The ALJ found that the claimant sustained a compensable injury on January 13, 2002 when he slipped and fell on ice while delivering pizzas. He was treated at a hospital emergency room and advised to consult with his personal physician. He did so, and Dr. Iverson diagnosed a closed head injury and provided some treatment. The claimant was then treated by Dr. Siegel, who diagnosed a herniated disc and administered injections. The insurer then referred the claimant to Dr. Hemler, who treated him and stated in a report that he reached maximum medical improvement on October 24, 2002 with permanent impairment. The ALJ found that the insurer’s case manager, Kathy Douglas, accompanied the claimant to his appointments with Dr. Hemler and sometimes spoke with him outside the hearing of the claimant. The claimant did not receive medical reports from Dr. Iverson, Dr. Siegel, or Dr. Hemler. On November 19, 2002, the insurer filed a final admission “per Dr. Hemler’s attached report,” although there were no worksheets attached to the final admission. The claimant did not object to the final admission or file a notice requesting a Division-sponsored independent medical examination (DIME).
The ALJ further found that the claimant later telephoned the insurer’s claims adjuster, Mariya Hutchinson, and requested permission to consult an orthopedic surgeon. The adjuster referred the claimant to Dr. Verploeg, who treated the claimant with an additional injection and recommended further treatment, which was eventually authorized by the insurer. Dr. Verploeg performed further diagnostic tests and referred the claimant to Dr. Round, who reported on September 30, 2003, that the claimant injured his neck, low back, and right hip in the compensable accident. In response to a request from Dr. Verploeg to administer another injection, the adjuster referred the claimant to Dr. Beatty for an independent medical examination. Dr. Verploeg subsequently requested authorization for another injection, which the adjuster initially denied but then testified that she later orally authorized. Dr. Verploeg again requested authorization for a steroid injection in March 2005, which was granted in May 2005.
The claimant sought penalties for four separate violations. First, the claimant contended that the insurer violated Rule of Procedure XVI(J), requiring that a response to a request for prior authorization be made within seven days. Specifically, the claimant argued that the insurer did not timely respond to Dr. Verploeg’s requests for authorization to perform injections. However, the ALJ concluded that Rule XVI was not applicable to that request and, accordingly, denied those penalties.
Second, the claimant contended that the insurer should be penalized for failing to attach to the final admission a copy of Dr. Hemler’s impairment worksheet, in violation of Rule of Procedure IV(N)(1). However, the ALJ concluded that the evidence did not show that Dr. Hemler ever sent to the insurer a worksheet and, therefore, the ALJ denied penalties for that alleged violation.
Third, the claimant sought penalties for the insurer’s violation of Rule of Procedure XI, requiring that a copy of every medical report not filed with the Division be exchanged with all parties within 15 days of receipt. The ALJ found that the claimant did not receive any medical reports until after October 29, 2004, which was the time at which his attorney entered an appearance. The ALJ concluded that penalties of $10.00 per day should be imposed for the insurer’s failure to exchange medical reports between October 3, 2002, which was 15 days after it received a medical report from Dr. Hemler, and October 29, 2004. The penalty imposed totaled $7,560.00.
Finally, the claimant alleged that penalties should be imposed against the insurer for its violation of § 8-43-503(3), C.R.S. 2005, which prohibits a party from dictating to an authorized physician the type or duration of medical care to be provided. The ALJ concluded that the carrier had not engaged in that conduct and denied this penalty claim.
On appeal the claimant argues that the ALJ erred in denying penalties for the alleged violations of Rules XVI and IV(N)(1). The respondents also appealed and argue that the ALJ erred in concluding that the claim was open, and abused his discretion in imposing penalties for the failure to exchange medical records. We agree with the claimant that further proceedings are warranted regarding the alleged violation of Rule XVI.
I.
The claimant first argues that the ALJ erred in refusing to impose penalties for the respondents’ unreasonable delay in responding to the requests for prior authorization. Because the ALJ may have misapplied the applicable law, we remand for further proceedings regarding this issue.
As we read the ALJ’s order, he entered factual findings concerning several requests for prior authorization submitted by Dr. Verploeg. The ALJ found that the doctor requested authorization for an MRI of the right hip, for a fluoroscopically guided steroid injection at the right hip, and for an intra-articular steroid injection at the right hip. However, the ALJ did not enter factual findings concerning whether and when the requests for authorization were “completed” pursuant to Rule XVI(I)(5), concerning the precise dates on which the insurer responded to the requests pursuant to Rule XVI(I)(2), or concerning whether and when the requests were contested pursuant to Rule XVI(J).
Rather than enter those findings, the ALJ denied the requested penalties because, where the requested treatment is not one for which prior authorization is mandatory, the ALJ concluded that “penalties under W.C.R.P. XVI cannot be assessed. . . .” Findings of Fact, Conclusions of Law, and Order at 5, ¶ 1. The ALJ apparently concluded that penalties under § 8-43-304, C.R.S. 2005 were prohibited where the terms of Rule XVI were did not require a mandatory request for prior authorization. However, this conclusion does not represent a correct interpretation of the law.
In Timko v. Cub Foods, W.C. No. 3-969-031 (December 26, 2003) we concluded that an insurer can violate Rule XVI(J) by failing to respond to a request for prior authorization even though the request was not mandated by Rule XVI(I)(1). We read Rule XVI(I)(2) as creating a requirement that the insurer respond to all requests for prior authorization, even where there is no duty on the part of the provider to make such a request. We adhere to our opinion in Timko.
We agree with the respondents’ argument that the legal standard is not one of strict liability. Rather, as the respondents point out, the question is whether the insurer failed to take the action a reasonable insurer would have taken in order to comply with the rule. See Diversified Veterans Corporate Center v. Hewuse, 942 P.2d 1312
(Colo.App. 1997). However, we disagree with the respondents’ argument that the insurer’s conduct was objectively reasonable as a matter of law, and therefore would preclude the imposition of penalties on remand. We recognize the respondents’ argument that the insurer provided to the authorized treating physicians “blanket authorization” and that “they literally did everything they could have possibly done at that time to allow the physicians to not have to request prior authorization. . . .” Respondents’ Brief in Opposition to Claimant’s Petition to Review at 7. However, because of his resolution of this issue, the ALJ entered no findings of fact concerning the objective reasonableness of the insurer’s conduct, and we have no fact-finding authority. Accordingly, we reject the respondents’ argument that its conduct was reasonable as a matter of law. This question must be addressed on remand.
The claimant also contends that the ALJ erred in refusing to impose penalties for the respondents’ alleged violation of Rule IV(N)(1), in failing to attach to their final admission copies of the doctor’s impairment worksheets. The relevant portion of the rule provides that “[w]hen the final admission is predicated upon medical reports, such reports shall accompany the admission including any evaluation record (worksheets) associated with an impairment rating.” The ALJ denied this requested penalty because he concluded that “the evidence did not establish that Dr. Hemler had included his worksheet as part of the transmittal of his report to the insurer or that the insurer knew or should have known of the existence of a worksheet when it issued the FAL.” Findings of Fact, Conclusions of Law, and Order at 5, ¶ 3. We do not understand the claimant to be arguing that the insurer was under some duty to insure that Dr. Hemler prepared and sent a worksheet. Rather, the claimant argues that the evidence compels the conclusion that the insurer was in possession of the worksheet and failed to attach it to the final admission. We disagree with this argument.
Whether the insurer had Dr. Hemler’s worksheet at the time they filed their final admission is a factual question for resolution by the ALJ, and the burden of proof in establishing the factual predicate for the imposition of penalties was on the claimant. Whether he met his burden of proof is also generally a factual question, and the ALJ’s determination must be upheld if supported by substantial evidence in the record. Dover Elevator Co. v. Industrial Claim Appeals Office, 961 P.2d 1141
(Colo.App. 1998). Substantial evidence is that quantum of probative evidence which a rational fact finder would accept as adequate to support a conclusion without regard to the existence of conflicting evidence Durocher v. Industrial Claim Appeals Office, 905 P.2d 4 (Colo.App. 1995).
And, we must ordinarily defer to the ALJ’s factual determinations including his resolution of conflicts in the evidence, his credibility determinations, and the plausible inferences he drew from the record. §8-43-301(8), C.R.S. 2005; Metro Moving and Storage Co. v. Gussert, 914 P.2d 411 (Colo.App. 1995).
As we understand the ALJ’s order, he was unpersuaded that the insurer had Dr. Hemler’s worksheets at the time the final admission was filed. Although there was certainly evidence from which the ALJ could have drawn a contrary inference, principally in the form of the testimony of Dr. Hemler’s office manager, we cannot conclude that he was compelled to credit that evidence as a matter of law. Accordingly, we may not disturb the ALJ’s determination that the claimant failed to show that the insurer was in possession of the impairment worksheet when it filed the final admission.
II.
The respondents contend on appeal that the ALJ erred in granting summary judgment on the question whether the claim was closed by the claimant’s failure to object to the final admission. The respondents argue that the ALJ’s later finding in the penalty proceeding that the claimant failed to prove that the respondents had the worksheets compels the conclusion that summary judgment was mistakenly granted. We are unpersuaded.
C.R.C.P. 56 allows an ALJ to enter summary judgment where there are no disputed issues of material fact. Morphew v. Ridge Crane Service, Inc., 902 P.2d 848 (Colo.App. 1995) ; Nova v. Industrial Claim Appeals Office, 754 P.2d 800 (Colo.App. 1988) (the Colorado rules of civil procedure apply insofar as they are not inconsistent with the procedural or statutory provisions of the Act). It is true that summary judgment is a drastic remedy and is not warranted unless the moving party demonstrates it is entitled to judgment as a matter of law. Van Alstyne v. Housing Authority of Pueblo, 985 P.2d 97 (Colo.App. 1999). And all doubts as to the existence of disputed facts must be resolved against the moving party, and the party against whom judgment is to be entered is entitled to all favorable inferences that may be drawn from the facts. Kaiser Foundaton Health Plan v. Sharp, 741 P.2d 714 (Colo.App. 1987). However, once the moving party establishes that no material fact is in dispute, the burden of proving the existence of a factual dispute shifts to the opposing party. The failure of the opposing party to satisfy its burden entitles the moving party to summary judgment. Gifford v. City of Colorado Springs, 815 P.2d 1008 (Colo.App. 1991).
Here, as we read the respondents’ opposition to the motion for summary judgment, they did not assert that they did not have the worksheet at the time of the filing of the final admission. Indeed, in two lengthy paragraphs the respondents argue that submission of Dr. Hemler’s report itself was sufficient to satisfy the statutory requirements, and that the claimant did not explain any way in which the absence of the worksheets prejudiced his ability to evaluate the final admission. However, the respondents did not anywhere in their response to the motion for summary judgment assert that they did not have possession or access to the worksheet. Hence, the ALJ could have inferred for purposes of resolving the motion for summary judgment that the respondents had the worksheet and did not attach it to the final admission. Because we agree with the claimant that that failure to provide the worksheet rendered the final admission defective, we reject the respondents’ argument that the granting of summary judgment was error. The respondents’ failure to fully comply with § 8-43-203(2)(b)(II), C.R.S. 2005 does not operate to close the claim, even where the claimant fails to object to the final admission. See Bargas v. Special Transit, W.C. No. 4-534-551 (June 4, 2004).
Moreover, merely because the ALJ in a later proceeding concluded that the claimant failed to carry his burden of showing that the respondents had in their possession the worksheet does not compel the reversal of the ruling on summary judgment. As noted, the question resolved by the ALJ at that time was whether the respondents had raised any disputed facts concerning the validity of the final admission. Because they had not raised any such disputed fact, summary judgment on the question of the closure of the claim was properly granted.
The respondents also contend that the ALJ abused his discretion in imposing penalties for the respondents’ failure to exchange medical reports, in violation of Rule of Procedure XI. Specifically, the respondents argue that substantial evidence does not support the date identified by the ALJ as that on which penalties should commence. They further argue that the ALJ’s inference that the insurer withheld the medical reports to obtain a tactical advantage is not a reasonable one. Finally, they argue that the ALJ abused his discretion in considering medical reports that were not the subject of penalties, since the claimant failed to establish the dates on which they should have been exchanged. We are unpersuaded that the ALJ abused his discretion.
Section 8-43-304(1), C.R.S. 2005 provides for the imposition of penalties of up to $500 per day where the insurer “fails or refuses to perform any duty lawfully enjoined within the time prescribed by the director.” The violation of a procedural rule constitutes the failure or refusal to perform a duty lawfully enjoined. E.g., Kelly v. Kaiser-Hill Company, W.C. No. 4-332-063 (August 11, 2000); Adkinson v. National Rooter, W.C. No. 4-197-635 (August 11, 1995). In order to impose penalties under § 8-43-304(1) the ALJ must first determine that the insurer’s conduct constituted a violation of the rule. If the ALJ finds that a violation occurred, penalties may only be imposed if the ALJ concludes that the insurer’s conduct was not reasonable under an objective standard. E.g., Colorado Compensation Insurance Authority v. Industrial Claim Appeals Office, 907 P.2d 676 (Colo.App. 1995).
Rule XI(B)(2) provides that “[a] copy of every medical report not filed with the Division shall be exchanged with all parties within fifteen (15) working days of receipt.” Here, it is apparently undisputed that the insurer did not exchange any medical records until the claimant’s attorney entered his appearance on or about October 29, 2004. Contrary to the respondents’ arguments, it was a plausible inference from the record that the insurer withheld the medical records for “tactical” reasons. At the commencement of the hearing the parties submitted voluminous medical records, apparently none of which had been exchanged within fifteen days pursuant to Rule XI(B)(2). Given that the insurer did not provide any medical records until an attorney entered his appearance for the claimant, and that the insurer provided no explanation at the hearing for the failure to exchange the records, the ALJ’s inference is a plausible one. Accordingly, we perceive no basis on which to disturb the order imposing penalties.
Finally we reject the respondents’ argument that they did not waive the one-year statute of limitations for filing penalty claims set forth in §8-43-304(5). Failure to raise the statute of limitations defense prior to the hearing waives its application. Kersting v. Industrial Commission, 39 Colo. App. 297, 567 P.2d 394 (1977).
IT IS THEREFORE ORDERED that the ALJ’s order dated June 6, 2005, is set aside insofar as it denied penalties for the respondents’ alleged violation of Rule XVI, and the matter is remanded for further proceedings consistent with this order, and,
IT IS FURTHER ORDERED that the ALJ’s order dated June 6, 2005 is otherwise affirmed.
Jack Richardson, Pizza Hut, Zurich Insurance Company, c/o Mariya Hutchison, Gallagher Bassett Services, Plano, TX, Sue Sobolik, Subsequent Injury Fund, Division of Workers’ Compensation — Interagency Mail William C. Hibbard, Esq., Steamboat Springs, CO, (For Claimant).
Kathleen Mowry Fairbanks, Esq. and William L. McCaslin, Esq., Denver, CO, (For Respondents)