W.C. No. 4-751-936.Industrial Claim Appeals Office.
May 13, 2009.
FINAL ORDER
The respondents seek review of an order of Administrative Law Judge Broniak (ALJ) dated October 20, 2008, that imposed a penalty on the insurer for an unreasonable delay in responding to a prior authorization request for surgery. We affirm.
The ALJ made the following findings of facts, which appear to be uncontested. The claimant suffered a work injury on January 8, 2008, which was diagnosed initially as a dislocated finger and shoulder strain. The claimant received conservative treatment. Between January 8, 2008 and February 9, 2008 the claimant began experiencing balance problems and right foot dragging. On May 9, 2008, Dr. Van Buskrik opined that the claimant needed surgery immediately and requested authorization from the insurer. Dr. Van Buskirk’s request for prior authorization, which included an opinion that the need for surgery was related to the work injury, was complete and received by the insurer as of May 23, 2008. Thus the insurer had until June 4, 2008 to provide a written response to the provider and the claimant. Within seven business days from May 23, 2008 the insurer submitted the prior authorization to Dr. Lindenbaum as required by Workers’ Compensation Rule of Procedure 16-10 (B), 7 Code Colo. Reg. 1101-3. Dr. Lindenbaum authored a report but the insurer failed to provide a copy of that report or a written contest to the claimant or Dr. Van Buskirk by June 4, 2008 as required by Rule 16-10. The claimant first notified respondents of his intent to seek penalties for violation of Rule 16-10 on July 11, 2008 and the insurer provided a written authorization for surgery on July 25, 2008. The insurer established that within 20 days of the date the issue of penalties was first raised, it cured the violation of Rule 16-10. The burden therefore
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shifted to the claimant to prove by clear and convincing evidence that insurer knew or should have known that it was in violation of Rule 16-10.
The ALJ determined that the claimant established by clear and convincing evidence that the insurer’s claims adjuster knew or should have known the insurer was in violation of Rule 16-10 and imposed a penalty of $150 per day for a period of 50 days for a total penalty of $7,500. On appeal, the insurer does not contest the ALJ’s determination that it violated Rule 16-10 nor does the insurer question the amount of the fine. Instead the insurer contends that the ALJ determination that the claimant established by clear and convincing evidence that the claims adjuster knew or should have know the insurer was in violation of W. C. Rule of Procedure 16-10 is not supported by the record and requests that the order be set aside.
Section 8-43-304(4), C.R.S. 2008 provides that if the alleged violator cures the violation within a twenty-day period, and the party seeking such a penalty fails to prove by clear and convincing evidence that the alleged violator knew or reasonably should have known such person was in violation, no penalty shall be assessed. Matthys v. City of Colorado Springs, W.C. No. 4-662-890 (April 02, 2007). Accordingly, no penalty may be imposed if, first, the violation is cured within twenty days and, second, the respondent failed to prove by clear and convincing evidence that the claimant knew or should have known of the violation.
Clear and convincing evidence is stronger than a preponderance, and is evidence that makes a proposition highly probable and free from serious doubt. DiLeo v. Koltnow, 200 Colo. 119, 613 P. 2d 318 (1980); Metro Moving and Storage Co. v. Gussert, 914 P.2d 411 (Colo.App. 1995). Consequently, to sustain his burden of proof the claimant was required to establish that it was “highly probable” or free from serious doubt that the insurer knew or should have known that it was in violation of the rule. Barnes v. The Department of Institutions, W.C. No. 4-632-352(October 30, 2006).
Whether the insurer knew or should have known of the alleged violation, are questions of fact for resolution by the ALJ. See Colorado Compensation Insurance Authority v. Industrial Claim Appeals Office, 907 P.2d 676 (Colo.App. 1995). Therefore, we must uphold the ALJ’s determinations if supported by substantial evidence and plausible inferences drawn from the record. Section 8-43-301(8), C.R.S. 2008 University Park Care Center v. Industrial Claim Appeals Office, 43 P.3d 637 (Colo.App. 2001); Dover Elevator Co. v. Industrial Claim Appeals Office, 961 P.2d 1141 (Colo.App. 1998). This is true despite the elevated standard of proof required to overcome a DIME: “[I]rrespective of whether the standard of proof at the administrative adjudicatory level of proceedings is clear and convincing, beyond a reasonable doubt, or merely a preponderance of the evidence, it is solely for the trier of fact to determine the persuasive
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effect of the evidence and whether the burden of proof has been satisfied.” See Metro Moving Storage Co. v. Gussert, 914 P.2d 411
(Colo.App. 1995). Therefore, the standard of review remains whether the ALJ’s findings of fact are supported by substantial evidence in the record. Id.; § 8-43-301(8), C.R.S. 2008. 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. Metro Moving Storage Co. v. Gussert, supra. This standard of review is deferential and the scope of our review is “exceedingly narrow.” Metro Moving Storage Co. v. Gussert, supra.
The ALJ made the following findings of fact in support of her determination that the claimant established by clear and convincing evidence that insurer’s claims adjuster knew or should have known the insurer was in violation of Rule 16-10. The adjuster was obviously aware of the requirement to obtain a physician’s review within seven business days as evidenced by the report prepared by Dr. Lindenbaum on June 2, 2008. The report is addressed to a claims case manager for the insurer and begin with “At your request, I reviewed the submitted medical records regarding Mr. Dennis Walker.” Further the insurer timely responded to Dr. VanBuskirk’s first prior authorization request, asking her to comment on relatedness. Based on the actions of insurer’s adjuster, the insurer clearly knew the requirements of Rule 16-10 and recognized the importance of compliance therewith. Therefore the ALJ determined that the actions of the insurer constituted an unreasonable delay in responding to the prior authorization request for urgent surgery.
The insurer concedes that it did not provide a copy of that report to the claimant and Dr. Van Buskirk by June 4, 2008 as required by Rule 16-10. However, the insurer argues that it was under the faulty perception that Dr. Lindenbaum had sent the report directly to the claimant and to Dr. Van Buskirk. The insurer argues that the ALJ committed error in equating the insurer’s knowledge of the requirement of Rule 16-10 with the insurer’s knowledge as to whether Dr. Lindenbaum actually sent a copy of the report to the claimant and Dr. Van Buskirk. The insurer argues that the fact that the insurer knew the requirements of Rule 16-10 is not relevant to whether the insurer knew or should have known whether Dr. Lindenbaum report had been timely sent to the claimant and Dr. Van Buskirk. We disagree.
We first note that the ALJ was not compelled to accept the insurer’s argument that it was under the perception that “Dr. Lindenbaum sent the report directly to the claimant and Dr. Van Buskirk.” To the contrary the ALJ found that the insurer offered no persuasive or credible reason why Dr. Lindenbaum’s report was never provided to Dr. Van Buskirk and the claimant. The ALJ’s credibility determinations are binding except in extreme circumstances. Arenas v. Industrial Claim Appeals Office, 8 P.3d. 558 (Colo.App. 2000). We are not persuaded that the ALJ was compelled to accept the factual basis
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for the explanation offered by the insurer.
Further, under the circumstances here, to the extent the ALJ regarded the insurer’s knowledge of the rule as equivalent to knowledge that it had violated Rule 16-10 we perceive no reversible error. Rule 16-10 provides in relevant part that if the payer is contesting a request for prior authorization for medical reasons, “the payer shall,” within seven business days of the completed request have all the submitted documentation reviewed by a physician and furnish the provider and the parties with either a verbal or written approval, or a written contest that sets forth an explanation of the specific medical reasons for the contest, including the name and professional credentials of the person performing the medical review and a copy of the medical reviewer’s opinion.
Under the rule it is the obligation of the insurer, not the obligation of the reviewing physician, to provide the report to the claimant and to Dr. Van Buskirk. We perceive no reversible error in the ALJ’s determination that the knowledge of the insurer that it had not directly provided the report to the necessary parties was equivalent to knowledge that it had violated the rule. In our view, it was a plausible inference for the ALJ to draw that because the insurer had knowledge of the Rule that provided the insurer “shall” send the report to the relevant parties that the insurer knew or reasonably should have known it was in violation of the rule because it had not sent the report.
IT IS THEREFORE ORDERED that the ALJ’s order dated October 20, 2008 is affirmed.
INDUSTRIAL CLAIM APPEALS PANEL
______________________________ Curt Kriksciun
______________________________ Thomas Schrant
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DENNIS WALKER, BROOMFIELD, CO, (Claimant).
MESA VISTA OF BOULDER, BOULDER, CO, (Employer).
LIBERTY MUTUAL FIRE INSURANCE, Attn: MALCOLM CHANDLER, ENGLEWOOD, CO, (Insurer).
HULL ZIMMERMAN, PC, Attn: COUNTRY CLUB VILLAGE, C/O: RICK HULL, ESQ., WESTMINSTER, CO, (For Claimant).
LAW OFFICES OF RICHARD P MYERS, Attn: APRIL MOORE, ESQ., DENVER, CO, (For Respondents).
HCM, INC., Attn: DEB WHITE, BOULDER, CO, (Other Party).
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