Agilus Health (Wilbanks) v. Dresser, Inc.

81 So. 3d 677, 2010 WL 4628232
CourtLouisiana Court of Appeal
DecidedOctober 27, 2011
Docket10-315
StatusPublished

This text of 81 So. 3d 677 (Agilus Health (Wilbanks) v. Dresser, Inc.) is published on Counsel Stack Legal Research, covering Louisiana Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Agilus Health (Wilbanks) v. Dresser, Inc., 81 So. 3d 677, 2010 WL 4628232 (La. Ct. App. 2011).

Opinion

81 So.3d 677 (2010)

AGILUS HEALTH, INC. (James WILBANKS)
v.
DRESSER, INC., et al.

No. 10-315.

Court of Appeal of Louisiana, Third Circuit.

November 17, 2010.
Rehearing Not Considered October 27, 2011.

*678 Eric J. Waltner, D. Paul Gardner, Jr., Allen & Gooch, Lafayette, LA, Edward R. Wicker, Jr., Barrasso, Usdin, Kupperman, New Orleans, LA, for Defendants/Appellants, Liberty Mutual Insurance Company and Dresser, Inc.

Edward Emile Roberts, Neblett, Beard & Arsenault, Alexandria, LA, Richard Bray Williams, Williams Family Law Firm, L.L.C., Natchitoches, LA, for Plaintiff/Appellee, Agilus Health, Inc.

Court composed of JIMMIE C. PETERS, BILLY HOWARD EZELL, and SHANNON J. GREMILLION, Judges.

PETERS, J.

Dresser, Inc. and its workers' compensation insurer, Liberty Mutual Insurance Company (referred to collectively as Dresser), appeal a judgment rendered by the workers' compensation judge (WCJ) in favor of Agilus Health, Inc. (Agilus), awarding Agilus recovery of $23.40 for medical services rendered to one of Dresser's injured employees, $2,000.00 in statutory penalties, and $3,000.00 in attorney fees. We reverse the WCJ award of statutory penalties, but affirm the judgment in all other respects. Additionally, we render judgment in favor of Agilus and against Dresser in the amount of $1,500.00 as an additional attorney fee for work performed on appeal.

DISCUSSION OF THE RECORD

This appeal is one of three cases now before this panel involving the same litigants and raising the same legal issue. In each case, an employee of Dresser sustained an injury compensable under the Louisiana Workers' Compensation Act and received medical treatment from Agilus. In each case, Dresser, through Liberty Mutual, initially applied La.R.S. 23:1034.2 and La.Admin.Code tit. 40, part I, § 5157 to reduce Dresser's medical charges pursuant to the workers' compensation fee schedule. However, Dresser further reduced the charges by an additional twenty percent before tendering payment to Agilus. The correctness of the twenty percent reduction is the single issue in all three cases.

All of the disputes now before us have the same undisputed factual background and arise from a series of contracts involving a preferred provider organization (PPO) which discounts its payments to Agilus by twenty percent. They begin with a 2004 contract between Agilus' predecessor, Louisiana Physical Therapy Centers (LPTC), and First Health Group Corporation (First Health), which had as its purpose LPTC's participation in a Preferred Provider Panel through which First Health would offer discounted medical services to participating payors.

Section 2 of Article 4 of the LPTC contract addressed provider billing and payment and provided, in pertinent part, "For Workers' Compensation Payors, reimbursement under this Agreement shall not *679 exceed the amount allowed for Provider's services under Workers' Compensation laws and regulations." Section D of Appendix A, entitled "FIRST HEALTH OUTPATIENT CARE NETWORK REIMBURSEMENT," and attached to the contract, provided:

Reimbursement from Workers' Compensation Payors for services rendered to occupationally ill/injured employees shall be as follows:
(1) If any state law or regulation establishes rules or guidelines for the payment of health care services, reimbursement shall not exceed 85% of the maximum amount payable under such rules or guidelines. Any procedure code which is unvalued shall be reimbursed pursuant to Section A, Paragraph (3), of this Appendix. This rate of reimbursement shall apply whether such rules or guidelines are in existence at the time of execution of this agreement or established at a later time.
(2) In the absence of any state law or regulation set forth in Section D, Paragraph (1), reimbursement shall be the method set forth in Section A, Paragraph (1), (2) and (3) of this Appendix, but in no event shall reimbursement exceed the usual and customary charge for the services, as determined by First Health or Payor.

In 2005, Section D of Appendix A was amended to provide that reimbursement from workers' compensation payors shall not exceed "80% of the maximum amount payable under such rules or guidelines."

In 2006, Liberty Mutual also entered into a contract with First Health. This gave Liberty Mutual and its workers' compensation insureds access to First Health's medical provider network and its "reduced and negotiated fees for health care services." In other words, there was no direct contract between Agilus and Dresser. Rather, the basis of this and the other two suits is Dresser's underpayment of medical services that Agilus provided to its employees based on contracts emanating from First Health.

In the matter now before us, Dresser's injured worker is James Wilbanks, and it is not disputed that Mr. Wilbanks sustained an injury compensable under the Louisiana Workers' Compensation Act, that Agilus provided medical care to Mr. Wilbanks totaling $479.00, and that the medical care was for the treatment of his compensable injuries. In handling Agilus' claim for payment, Dresser reduced the medical care statement by a total of $102.40 and tendered $367.60 to Agilus as payment in full for the services rendered to Mr. Atwood. The WCJ determined that $23.40 represented the additional twenty percent reduction provided for by First Health's contract with Agilus.

Agilus brought this claim to recover the twenty-percent underpayment from Dresser. Following a trial on the merits, the WCJ ultimately rendered judgment in this case, as well as the other two now before us, awarding Agilus judgment for the twenty percent at issue, penalties, and attorney fees. In doing so, the WCJ concluded that Dresser could not rely on contracts with a PPO to reduce the amounts paid for medical services provided by Agilus by to its injured employee. This appeal followed.

In their appeal of this and the other two cases before us, Dresser raised three assignments of error:

1. The Hearing Officer erred by invalidating Agilus Health's contract with First Health, and Liberty Mutual's contract with First Health and concluding that such contracts cannot be utilized to discount a health care *680 provider's fees below the reimbursement fee schedule for medical treatment rendered in connection with a workers' compensation claim.
2. The Hearing Officer erred in finding that Liberty Mutual and Dresser were arbitrary and capricious in light of their reliance on the PPO contracts and other favorable and well-reasoned Louisiana court opinions.
3. The Hearing Officer improperly held Liberty Mutual and Dresser liable pursuant to Louisiana Revised Statute 23:1201, and improperly assessed penalties and attorney's fees against them.

Agilus answered the appeal requesting an award of additional attorney fees for work performed on appeal.

OPINION

Dresser's first assignment of error can be rephrased to ask: Can an employer reimburse a health care provider at an amount below that provided by the Louisiana Workers' Compensation Act's reimbursement schedule. In a concurring opinion rendered in Beutler England Chiropractic Clinic v. Mermentau Rice, Inc., 05-942, p. 4 (La.App. 3 Cir. 5/31/06), 931 So.2d 553, 561 (first alteration ours), the writer of this opinion, joined by five of the twelve judges on this court, recognized that the answer to this question is "no":

As they did in Beutler England Clinic [v. Market Basket No. 27,

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Cite This Page — Counsel Stack

Bluebook (online)
81 So. 3d 677, 2010 WL 4628232, Counsel Stack Legal Research, https://law.counselstack.com/opinion/agilus-health-wilbanks-v-dresser-inc-lactapp-2011.