Christiana Care Health Services v. Palomino

74 A.3d 627, 2013 WL 1460342

• Court: Supreme Court of Delaware
• Decided: April 11, 2013
• Docket: Nos. 56, 2012, 62, 2012, 63, 2012
• Status: Published

Opinions

RIDGELY, Justice,

for the majority.

Cecil Palomino, Salvador Avila-Hernandez and Julio Munoz (“Claimants”) were each injured in different work-related accidents. It is not disputed that their injuries are compensable under the Worker’s Compensation Act and that payments of some worker’s compensation have been made. After their doctors recommended certain treatments, their employers requested determinations of whether the treatment plans fell outside of the Health Care Practice (“HCAP”) Guidelines through a utilization review (“UR”) authorized by 19 Del. C. § 2322F(j). The UR panel determined that portions of their treatments were not approved for coverage. The Claimants, through counsel, petitioned the Industrial Accident Board (“Board”) for review of the UR determination. They did so after the 45 day time window prescribed by Department of Labor (“DOL”) Regulation 5.5.1. The Board dismissed the'petitions as untimely.

Claimants appealed to the Superior Court, which determined that the 45 day limit of Regulation 5.5.1 is invalid because it conflicts with 19 Del. C. § 2361. The applicable portion of Section 2361 provides that “[wjhere payments of compensation have been made in any case under an agreement approved by the Board or by an award of the Board, no statute of limitation shall take effect until the expiration of 5 years from the time of the making of the last payment for which a proper receipt has been filed with the Department.” Christiana Care Health Services (“Christi-ana Care”), Timber Products, and Berger Brothers (collectively, “Employers”) have appealed from the Superior Court’s judgment.

We find no merit to the appeal and affirm.

Facts and Procedural History

Salvador Avila-Hernandez was injured in a compensable work-related accident resulting in a low back injury while employed by Timber Products. His injuries required him to receive multiple injections and regular physical therapy. A UR panel approved two injections and twelve sessions of physical therapy. The UR panel rejected twenty-eight other sessions of physical therapy, however, finding that they were not in compliance with HCAP Guidelines. Based on the UR determination, the employer’s insurance carrier paid for twelve therapy sessions and two injections but denied payment for the other sessions. Avila-Hernandez filed his petition for review of the UR determination after the 45 day period had expired. The Board granted Timber Products’ motion to dismiss the review as untimely.

Cecil Palomino was injured in a compen-sable work-related accident while employed by Christiana Care. Two UR determinations rejecting treatment plans were issued in his case. Palomino did not file his petition for review until after the 45-day window had passed. The Board granted Christiana Care’s motion to dismiss the review as untimely.

Julio Munoz was injured in a compensa-ble work-related accident while employed by Berger Brothers. A UR panel determined that his medical services were not in compliance with HCAP Guidelines. Munoz filed his petition for review after the 45 day period had expired. Berger Brothers’ motion to dismiss the review as untimely was granted.

Claimants appealed the dismissals to the Superior Court and their cases were consolidated. The Superior Court reversed and remanded, concluding that Regulation 5.5.1’s imposition of a 45-day limitation on petitions was invalid because it is contrary to the five-year statute of limitations mandated by 19 Del. C. § 2361(b). Employers appealed to this Court.

During the course of this appeal, we asked the Department of Justice to submit an amicus curiae brief on behalf of the Department of Labor on the validity of Regulation 5.5.1 in light of 19 Del. C. § 2361. For the reasons explained in this Opinion, we affirm the Superior Court judgment.

Discussion

When reviewing an appeal from the Board, “the only role of the appellate court is to determine whether the decision of the Board is supported by substantial evidence and is free from legal error.”¹ We review questions of law, such as the construction of the workers’ compensation statute, de novo.2 “When any regulation is the subject of an enforcement action in the Court, the lawfulness of such regulation may be reviewed by the Court as a defense in the action.”³ “Upon review of regulatory action, the agency action shall be presumed to be valid and the complaining party shall have the burden of proving either that the action was taken in a substantially unlawful manner and that the complainant suffered prejudice thereby, or that the regulation, where required, was adopted without a reasonable basis on the record or is otherwise unlawful.”⁴

Title 19, section 2361 of the Delaware Code provides in relevant part:

(b) Where payments of compensation have been made in any case under an agreement approved by the Board or by an award of the Board, no statute of limitation shall take effect until the expiration of 5 years from the time of the making of the last payment for which a proper receipt has been filed with the Department.⁵

This Court has emphasized that this provision “unambiguously provides that no statute of limitation shall take effect until five years from the last payment of benefits.”⁶

Title 19, section 2322F(j) of the Delaware Code provides for the development of a “utilization review program.”⁷ Significantly, the General Assembly provided for de novo review of a utilization review decision by the Board, but did not prescribe any time limitation by which the petition for review must be filed, nor did it otherwise change the broad language of Section 2861. The statute authorizing utilization review provides:

Utilization review. — The Health Care Advisory Panel shall develop a utilization review program. The intent is to provide reference for employers, insurance carriers, and health care providers for evaluation of health care and charges. The intended purpose of utilization review services shall be the prompt resolution of issues related to treatment and/or compliance with the health care payment system or practice guidelines for those claims which have been acknowledged to be compensable. An employer or insurance carrier may engage in utilization review to evaluate the quality, reasonableness and/or necessity of proposed or provided health care services for acknowledged compen-sable claims. Any person conducting a utilization review program for workers’ compensation shall be required to contract with the Office of Workers’ Compensation once every 2 years and certify compliance with Workers’ Compensation Utilization Management Standards or Health Utilization Management Standards of Utilization Review Accreditation Council (“URAC”) sufficient to achieve URAC accreditation or submit evidence of accreditation by URAC. If a party disagrees with the findings following utilization review, a petition may be filed with the Industrial Accident Board for de novo review. Complete rules and regulations relating to utilization review shall be approved and recommended by the Health Care Advisory Panel. Thereafter, such rules shall be adopted by regulation of the Department of Labor pursuant to Chapter 101 of Title 29. Such regulations shall be adopted and effective not later than 1 year after the first meeting of the Health Care Advisory Panel.⁸

Upon the recommendation of the Health Care Advisory Panel, the DOL adopted Regulation 5.5.1, which provides in relevant part:

The decision of the utilization review company shall be forwarded by the Department of Labor, by Certified Mail, Return Receipt Requested, to the claimant, the claimant’s attorney of record, the health care provider in question, and the employer or its insurance carrier. A decision of the utilization review company shall be final and conclusive between the parties unless within 45 days from the date of receipt of the utilization review decision any interested party files a petition with the Industrial Accident Board for de novo review.⁹

Employers argue that Regulation 5.5.1 does not create a “statute of limitations” because it does not foreclose the claimant’s right to recover additional workers’ compensation benefits for the injuries at issue. Employers interpret § 2361(b) as setting the time at which a claimant “will be completely barred from ever seeking additional benefits arising out of the work accident.” The 45-day period, by contrast (they argue), forecloses only payment for the specific treatment rendered by a specific provider on a specific date. In other words, because Regulation 5.5.1 does not foreclose all claims, but rather only specific worker’s compensation claims, the regulation does not operate as a statute of limitations. We find no merit to this argument, because it ignores the practical effect of the regulation, which is to bar a claim that is not made within 45 days of the UR determination. Indeed, if a claimant’s sole claim for worker’s compensation or only remaining claim were submitted for utilization review outside of the 45 day window, the claim would be barred by the Regulation, even if it were otherwise within the five-year time limitation of Section 2861.

Regulation 5.5.1 forecloses not only Board, but also judicial review, of a decision to deny specific workers’ compensation benefits. Section 2361 unequivocally provides, however, that “no statute of limitation shall take effect until the expiration of 5 years from the time of the making of the last payment for which a proper receipt has been filed with the Department.” This broad language protects a claimant from the preclusive effect of other statutes of limitation enacted by the General Assembly. It necessarily follows that the broad language of the current statute also protects a claimant from the preclusive effect of a DOL regulation that imposes a shorter time limitation for the Board to review a claim under the Worker’s Compensation Act.

The Employers contend that the process for reviewing a utilization review determination is in essence an “appeal.” Employers argue that the 45 day time allowed to appeal is larger than that allowed in many other appeal procedures. But the utilization review panel is neither a court nor an administrative agency. The General Assembly expressly intended that “if a party disagrees with the findings following utilization review, a petition may be filed with the Industrial Accident Board for de novo review.”¹⁰ The DOL regulation limits this statutory right. Even if a UR determínation somehow qualifies as an appeal, the jurisdiction of the Board and any time limitation for de novo review is a matter for the General Assembly and not the DOL to decide.¹¹

Although the General Assembly has authorized the Health Care Advisory Board to recommend and require the DOL to adopt regulations for utilization review, it did not establish any time bar for a worker’s compensation claim other than the 5 year limitation period provided in 19 Del. C. § 2361. The Department of Labor has restricted the right of de novo review the General Assembly has granted in a manner that is inconsistent with the mandate of § 2361. We conclude that the Superior Court properly determined that the 45-day limitation of Regulation 5.5.1 is invalid.

The dissent finds two problems with our analysis and urges that we have overlooked the purpose and function of the statutorily mandated UR process and that we have erroneously equated a limitation on the time to appeal from a UR decision with the limitation on the time to submit an original claim. The dissent further argues that the invalidation of Regulation 5.5.1 defeats the purpose of the UR program. We disagree. Instead, we have determined — as we must — that the Regulation cannot stand because it is inconsistent with the right of Claimants to petition the Board within the express statutory time limitations of 19 Del. C. § 2361.

The authorizing statute for the UR program contains no mandate shortening the time for a claim to be made for workers compensation benefits, nor does § 2361 provide any exception. The DOL may adopt regulations regarding utilization review, but it only those regulations that are “not inconsistent with the laws of this state.”¹² Regulation 5.5.1 conflicts directly with 19 Del. C. § 2361 and therefore impermissibly abridges Claimants’ rights under the statute.

The dissent argues there is a distinction between a statute of limitations and a limit on the time to appeal. We do not disagree with that distinction, but the dissent’s premise that Claimants’ petitions were appeals is incorrect. An appeal involves “[r]esort to a superior (i.e. appellate) court to review the decision of an inferior (i.e. trial) court or administrative agency.”¹³ The UR service provider is neither a court nor an administrative agency. Rather, the UR service provider is a contractor.¹⁴ The contractor’s only role is to review upon the request of an employer or insurance carrier, “the forms, information package and medical records package by the employer or insurance carrier ... to determine if it is in compliance with the practice guidelines developed by the Health Care Advisory Panel and adopted and implemented by the Department of Labor.”¹⁵ The Board has the statutory authority to determine whether additional compensation is due upon the request of any party after utilization review. The jurisdiction of the Board is invoked by a “petition” like every other Workers’ Compensation Act claim. Here, Claimants sought original review by the Board of their claim, not appellate review. The General Assembly has prescribed one time limitation period for Claimants’ petitions by 19 Del. C. § 2361, to the exclusion of all others. When § 2361 and a DOL regulation conflict, the statute must prevail.

Conclusion

The judgment of the Superior Court is AFFIRMED.

1 . Std. Distrib., Inc. v. Hall, 897 A.2d 155, 157 (Del.2006).

2 . LeVan v. Independence Mall, Inc., 940 A.2d 929, 932 (Del.2007).

3 . 29 Del. C. § 10141(c).

4 . 29 Del. C. § 10141(e).

5 . 19 Del. C. § 2361(b).

6 . LeVan, 940 A.2d at 932 (quoting National Union Fire Ins. Co. v. McDougall, 877 A.2d 969, 975 (Del.2005) (emphasis in original)).

7 . 19 Del. C. § 2322F (j).

8 . Id.

9 . 19 Del. Admin. C. § 1341-5.5.1.

10 . 19 Del. C. § 2322F(j).

11 . See 19 Del. C. §§ 2301A; 2345 and 2346 (continuing the Industrial Accident Board and providing for hearings upon disagreement on the amount of compensation on benefits and charges for medical services).

12 . 29 Del. C. § 8503(7).

13 . Black's Law Dictionary (5th Ed.).

14 . See 19 Del. C. § 2322F(j) provides in part: "Any person conducting a utilization review program for workers' compensation shall be required to contract with the Office of Workers' Compensation once every 2 years ...”

15 .19 Del. Admin. C. § 1341-5.4.