The summaries of the Colorado Court of Appeals published opinions constitute no part of the opinion of the division but have been prepared by the division for the convenience of the reader. The summaries may not be cited or relied upon as they are not the official language of the division. Any discrepancy between the language in the summary and in the opinion should be resolved in favor of the language in the opinion.
SUMMARY June 17, 2021
2021COA84
No. 20CA1523, Delta County Memorial Hospital v. ICAO —
Labor and Industry — Workers’ Compensation — Benefits — No
Recovery from Employee — Violations — Each Day a Separate
Offense
In a matter of first impression, a division of the court of
appeals considers whether medical billing sent to an injured worker
in violation of section 8-42-101(4), C.R.S. 2020 (prohibiting medical
providers from billing injured workers for medical care arising out of
admitted or determined compensable claims), can constitute a
“continuing violation” within the meaning of section 8-43-305,
C.R.S. 2020. The division concludes that penalties under section 8-
43-304(1), C.R.S. 2020, can only be imposed for the discrete days
on which bills were sent in violation of section 8-42-101(4). In addition, the division concludes that where, as here, a non-party
entered a general appearance to contest a penalty claim, the non-
party consented to the personal jurisdiction of the Office of
Administrative Courts. COLORADO COURT OF APPEALS 2021COA84
Court of Appeals No. 20CA1523 Industrial Claim Appeals Office of the State of Colorado WC No. 5-065-586
Delta County Memorial Hospital,
Petitioner,
v.
Industrial Claim Appeals Office of the State of Colorado, Robert C. Adams d/b/a Bob Adams Trucking, and Edith Keating,
Respondents.
ORDER AFFIRMED IN PART, SET ASIDE IN PART, AND CASE REMANDED WITH DIRECTIONS
Division IV Opinion by JUDGE HAWTHORNE* Terry and Navarro, JJ., concur
June 17, 2021
Ritsema & Lyon, P.C., Douglas L. Stratton, Fort Collins, Colorado, for Petitioner Delta County Memorial Hospital
No Appearance for Respondent Industrial Claim Appeals Office
No Appearance for Respondent Robert C. Adams d/b/a Bob Adams Trucking
Law Office of Donald Kaufman, Donald Kaufman, Glenwood Springs, Colorado; The McCarthy Law Firm, P.C., John D. McCarthy, Arvada, Colorado for Respondent Edith Keating
*Sitting by assignment of the Chief Justice under provisions of Colo. Const. art. VI, § 5(3), and § 24-51-1105, C.R.S. 2020. ¶1 This workers’ compensation action raises two questions: (1)
whether a non-party to a case — here, a hospital — can be
penalized for violating a provision of the Workers’ Compensation Act
(Act): and (2) in a matter of first impression, whether discrete
hospital bills can give rise to a continuing violation. For the
reasons addressed below, we do not reach the first question and
answer the second question in the negative.
¶2 The hospital, Delta County Memorial Hospital (the hospital),
violated section 8-42-101(4), C.R.S. 2020, by billing its patient,
claimant Edith Keating, for medical procedures related to her work
injury. An administrative law judge (ALJ) imposed penalties against
the hospital even though the hospital had not been joined as a
party to the action under C.R.C.P. 19(a). The hospital challenges
the ALJ’s order, arguing that penalties cannot be imposed against a
non-party. But we need not answer this question. By entering a
general appearance in the proceedings, the hospital voluntarily
submitted itself to the jurisdiction of the Office of Administrative
Courts (OAC). The OAC thereby acquired personal jurisdiction over
the hospital, and we affirm the decision of the Industrial Claim
1 Appeals Office (Panel) upholding this portion of the ALJ’s order on
this basis.
¶3 Claimant cross-appeals the Panel’s decision, contending that
the penalty amount affirmed by the Panel should have been greater.
Penalties under the Act accrue daily. See § 8-43-304(1), C.R.S.
2020. The Panel limited the daily penalty to those specific dates on
which the hospital issued medical bills to claimant after learning
that her injuries were work-related. But claimant maintains that
the hospital’s violation should be regarded as a “continuing
violation” for which daily penalties can be imposed over a range of
dates. We agree with the Panel that each bill constitutes a distinct
violation that cannot be cured. Such violative billing practices
therefore do not fit within the definition of a continuing violation.
Penalties could be imposed, then, only for those dates on which the
hospital improperly billed claimant. We therefore conclude that the
Panel correctly limited the penalty and affirm the imposition of
penalties on discrete dates when the hospital billed claimant.
However, we set aside that portion of the Panel’s order excluding
two collection attempts by the hospital from claimant’s penalty
award.
2 I. Background
¶4 Claimant worked for Robert C. Adams, doing business as Bob
Adams Trucking. In 2017, she sustained serious injuries while
loading a pickup truck onto a tilt-bed tow truck. After initially
being treated at another hospital, claimant received ongoing
treatment for her injuries at the hospital.
¶5 Claimant sought workers’ compensation benefits from her
employer, Mr. Adams, who has not entered an appearance. In
October 2018, an ALJ found claimant’s claim compensable and
awarded her medical and disability benefits against Mr. Adams,
who lacked statutorily required workers’ compensation insurance.
The ALJ ordered Mr. Adams to deposit $130,000.00 with the
Division of Workers’ Compensation (division) “to secure the
payment of all unpaid compensation and benefits awarded” and file
a bond with the division in the same amount. Claimant testified
that Mr. Adams never paid any funds to her; never paid any of her
medical providers, including the hospital; and, to the best of her
knowledge, never paid any sum to the division as ordered.
¶6 Claimant provided the hospital a copy of the order. Having not
received payment for the services it rendered, the hospital still
3 attempted to collect the debt from claimant. It admittedly sent bills
directly to her. But, as her attorney explained to the hospital in a
letter dated April 10, 2019, once an ALJ has found the claim
compensable, section 8-42-101(4) makes it “unlawful . . . for a
medical provider to bill an injured worker” for medical services
treating the work-related injury. The hospital’s billing manager
testified that she became aware of the letter and order in May 2019,
and a note dated May 7, 2019, in the hospital’s file for claimant’s
account indicates it had received a copy of claimant’s “Work Comp
lawsuit.”
¶7 Despite being advised of the law and the order, on June 13,
2019, counsel for the hospital responded to claimant’s counsel,
writing that because Mr. Adams never paid into the division’s fund
“as ordered by the Court,” the hospital had no other available
avenue to recoup its expenses and its “only recourse in recovering
its costs/fees is through continued collection efforts against
[claimant].” The record shows that the hospital thereafter sent
claimant several billing statements between June 18 and September
12, 2019.
4 ¶8 Soon after receiving the first hospital bill, claimant filed an
application for hearing with the division seeking penalties against
the hospital. She first filed a hearing application on June 18, 2019,
naming the hospital as the respondent in the caption. A copy was
sent to the hospital and its counsel the same day. The division
rejected that application because the hospital was not the
respondent-employer. Claimant filed and served on the hospital
and its counsel a second application for hearing on June 19, 2019,
listing both the hospital and Robert C. Adams as respondents, but
it, too, was rejected. Finally, the division accepted claimant’s third
application for hearing, filed June 20, 2019. The third application
identified Robert C. Adams as the respondent, and under its
endorsement of the issue of penalties stated,
8-42-101(4) DELTA MEMORIAL HOSPITAL[:] No Recovery From Employee, Once there has been an admission of liability or the entry of a final order finding that an employer or insurance carrier is liable for the payment of an employee’s medical costs or fees, a medical provider shall under no circumstances seek to recover such costs or fees from the employee.
5 As with the two rejected applications for hearing, claimant’s counsel
served the third application on the hospital and its counsel that
day.
¶9 At the ensuing hearing, the hospital’s counsel argued that it
had not been properly joined and that penalties therefore could not
be imposed against it. Noting that the penalties statute, section 8-
43-304(1), may be asserted against an employee, employer, insurer
or “any other person,” the ALJ disagreed. The ALJ instead
concluded that the hospital violated the Act by sending claimant
medical bills despite being informed of the ALJ’s October 2018
order finding the claim compensable. Because the ALJ considered
the hospital’s actions a “continu[ing] statutory violation,” she
imposed penalties of $750 per day “for the period of June 13, 2019
through and including October 9, 2019” — i.e., from the date the
hospital’s counsel responded to claimant’s counsel’s letter advising
the hospital of the October 2018 order and the statutory prohibition
against billing claimant through the date of the hearing before the
ALJ — a period of 119 days, resulting in a total penalty award of
$89,250.
6 ¶ 10 On review, the Panel affirmed that claimant had properly
asserted her penalty claim against the hospital, that the hospital
need not be joined as a party to have penalties imposed against it,
and that claimant had pleaded her penalty claim with sufficient
specificity. But the Panel concluded that because the hospital
could not cure its violation after sending the bills, the violation was
not “continuing” as the ALJ had found. And because the violations
were not continuing, penalties could only be imposed for those
dates on which the hospital improperly billed claimant. So the
Panel remanded the matter to the ALJ for additional findings
determining which specific bills violated section 8-42-101(4).
¶ 11 On remand, the ALJ found that the hospital improperly billed
claimant on eight separate occasions: June 18, July 2, July 8, July
18, July 31, August 7, August 13, and September 12, 2019. The
ALJ also found “two additional instances of the respondent hospital
attempting to collect from the claimant when two bills were
forwarded to collections on September 20, 2019.” Having found
these ten discrete instances of violative billing, the ALJ imposed
penalties of $750 per day for each of the ten instances, totaling
$7,500 in penalties.
7 ¶ 12 The Panel affirmed the imposition of penalties on the eight
dates on which the hospital sent bills to claimant but set aside that
portion of the ALJ’s order awarding penalties for the two bills
forwarded to collections on September 20, 2019. The bills sent to
collections, the Panel determined, were beyond the scope of
claimant’s application for hearing. A penalty cannot be assessed
“for activity not properly noticed” in an application for hearing. The
Panel then amended the ALJ’s order “to apply a daily penalty to
eight instances of violations,” resulting in a total penalty award of
$6,000. The hospital and claimant both appeal the Panel’s order.
II. The Hospital’s Appeal
¶ 13 The hospital contends that (1) the ALJ and the Panel erred by
finding that the hospital, a non-party to the action, could be
assessed penalties without being joined as an indispensable party
under C.R.C.P. 19(a), and thus imposing the penalties violated its
right to due process; and (2) the ALJ lacked personal jurisdiction
over it to assess penalties against a non-party. We are not
persuaded by either contention.
¶ 14 The Act says,
8 Once there has been an admission of liability or the entry of a final order finding that an employer or insurance carrier is liable for the payment of an employee’s medical costs or fees, a medical provider shall under no circumstances seek to recover such costs or fees from the employee.
§ 8-42-101(4) (emphasis added). The hospital does not dispute that
it violated this provision. It challenges only its failure to be joined
as a party, asserting that because it was not a party it could not
adequately protect its rights.
¶ 15 The Act’s penalties statute expressly permits imposing
penalties against anyone who violates its provisions. The relevant
portion states,
Any employer or insurer, or any officer or agent of either, or any employee, or any other person who violates articles 40 to 47 of this title 8, or does any act prohibited thereby, or fails or refuses to perform any duty lawfully enjoined within the time prescribed by the director or panel, for which no penalty has been specifically provided, or fails, neglects, or refuses to obey any lawful order made by the director or panel or any judgment or decree made by any court as provided by the articles shall be subject to such order being reduced to judgment by a court of competent jurisdiction and shall also be punished by a fine of not more than one thousand dollars per day for each offense . . . .
9 § 8-43-304(1) (emphasis added).
A. Personal Jurisdiction
¶ 16 We first address the personal jurisdiction issue. The hospital
argues that because the ALJ lacked personal jurisdiction over it,
she should not have proceeded with the penalties hearing against it.
Although the hospital concedes that it received notice of the hearing
and application, it argues that the notice “was inadequate in that
[the division] wrongfully changed the caption from the underlying
application for hearing that did not list the hospital as a party.” We
conclude that regardless of the language used in the caption, the
hospital submitted itself to personal jurisdiction by entering a
general appearance in the proceedings and defending itself on the
claim’s merits.
¶ 17 “[P]ersonal jurisdiction involves a court’s authority over a
particular individual.” Currier v. Sutherland, 218 P.3d 709, 714
(Colo. 2009). It “is the court’s power to subject a particular
defendant to the decisions of the court.” Rombough v. Mitchell, 140
P.3d 202, 204 (Colo. App. 2006). “[P]ersonal jurisdiction over a
defendant is required before a court may enter enforceable orders.”
Giduck v. Niblett, 2014 COA 86, ¶ 9.
10 ¶ 18 “The exercise of personal jurisdiction over a defendant is
proper ‘if fair and adequate notice is provided to the defendant, and
if the defendant has sufficient minimum contacts with the state
seeking jurisdiction.’” Currier, 218 P.3d at 714-15 (quoting Stone’s
Farm Supply, Inc. v. Deacon, 805 P.2d 1109, 1113 (Colo. 1991),
overruled on other grounds by Chapman v. Harner, 2014 CO 78).
¶ 19 Importantly, where, as here, a party or person submits to the
court’s personal jurisdiction over it, no further inquiry is necessary.
See Stone’s Farm Supply, 805 P.2d at 1113 n.6 (“If the court lacks
personal jurisdiction over a defendant, the defendant may consent
to jurisdiction by a voluntary appearance, i.e., by contesting the
case without challenging personal jurisdiction.”). “[W]hen a
defendant who purposefully directed his activities at a forum seeks
to defeat jurisdiction, he must present a compelling case that the
presence of some other considerations would render jurisdiction
unreasonable.” Rome v. Reyes, 2017 COA 84, ¶ 15.
¶ 20 In a situation analogous to the hospital’s appearance before
the ALJ, the Rombough division concluded that the trial court had
personal jurisdiction over the defendant in that case because “(1)
she was properly served; (2) she was alleged to have committed
11 tortious acts within the state; and (3) she filed an answer and
asserted counterclaims.” 140 P.3d at 204.
A party enters a general appearance and consents to the personal jurisdiction of a court by seeking relief in a form that acknowledges the personal jurisdiction of the court. Two requirements must be met: 1) the party must have knowledge of the pending proceeding; and 2) the party must intend to appear.
In re Marriage of Jeffers, 992 P.2d 686, 689 (Colo. App. 1999).
¶ 21 The record establishes that the hospital consented to the ALJ’s
personal jurisdiction over it. First, the hospital was named in the
application for hearing in the penalty section as anticipated by the
provision in section 8-43-304(1) allowing penalties to be pursued
against “any other person.” Second, it admittedly received multiple
notices of the action. And third, it entered a general appearance in
the proceeding before the ALJ by responding to the application for
hearing, filing a “Case Information Sheet,” defending itself on the
merits in the hearing (including presenting evidence and
questioning witnesses on both sides), and filing a post-hearing
position statement with the ALJ.
¶ 22 True, a non-party may appear specially to contest a court’s
personal jurisdiction over it and such special appearance may not
12 result in the court’s acquiring personal jurisdiction over the non-
party.
A special appearance is one made for the purpose of urging jurisdictional objections. If a defendant separately or in conjunction with a motion going only to the jurisdiction invokes the power of the court on the merits, or moves to dismiss the action, or asks relief which presupposes that jurisdiction has attached, this constitutes a general appearance.
Everett v. Wilson, 34 Colo. 476, 480, 83 P. 211, 212 (1905)
(citations omitted).
The usual method or procedure, common in the district court when process issues to one claiming non-jurisdiction, is for the one summoned to appear specially in the court and to move that process be quashed as to him. The court in such cases is vested with power to determine whether it has jurisdiction.
City of Thornton v. Pub. Utils. Comm’n, 154 Colo. 431, 435, 391 P.2d
374, 376 (1964). But the hospital did not enter a special
appearance at the hearing to solely contest personal jurisdiction.
Indeed, its counsel never mentioned the phrase “personal
jurisdiction” in its appearance, instead discussing at length whether
it had “standing” to contest the penalty claim. Counsel then
proceeded to mount a full defense on the merits of the penalty claim
13 by presenting witnesses, evidence, and argument challenging
claimant’s allegations. The hospital thus entered a general, not a
special, appearance, and it thereby consented to the OAC’s personal
jurisdiction over it.
¶ 23 Finally, we note that the case the hospital cites to support its
personal jurisdiction contention does not stand for the proposition
it advances. See Barker v. Dist. Ct., 199 Colo. 416, 420, 609 P.2d
628, 631 (1980). Instead, Barker was dismissed because “there
[was] no legal entity named as a party defendant. Absent a
controversy between legal entities, there [was] no subject matter to
be litigated and the court [was] without jurisdiction to proceed.” Id.
¶ 24 Because we conclude that the hospital consented to the OAC’s
personal jurisdiction over it, we necessarily reject its personal
jurisdiction contention. See Rombough, 140 P.3d at 204.
B. Joinder
¶ 25 Because the hospital appeared and defended itself — thus
consenting to the OAC’s personal jurisdiction over it — whether it
was properly joined in the action is inconsequential. But the
hospital argues that C.R.C.P. 19(a) mandates joinder of
indispensable parties — those whose rights could be injuriously
14 affected by any decision — and that it is necessarily an
indispensable party because penalties can be, and were, imposed
against it. The posture of this case convinces us that the hospital
suffered no harm, even if it was not properly joined under C.R.C.P.
19.
¶ 26 C.R.C.P. 19(a) states as follows:
A person who is properly subject to service of process in the action shall be joined as a party in the action if: (1) In his absence complete relief cannot be accorded among those already parties, or (2) he claims an interest relating to the subject of the action and is so situated that the disposition of the action in his absence may: (A) As a practical matter impair or impede his ability to protect that interest or (B) leave any of the persons already parties subject to a substantial risk of incurring double, multiple, or otherwise inconsistent obligations by reason of his claimed interest. If he has not been so joined, the court shall order that he be made a party. If he should join as a plaintiff but refuses to do so, he may be made a defendant, or, in a proper case, an involuntary plaintiff. If the joined party objects to venue and his joinder would render the venue of the action improper, he shall be dismissed from the action.
(Emphasis added.) Even if the hospital should have been joined as
a party because its rights could be negatively impacted in its
absence, it appeared generally, thus consenting to the OAC’s
15 personal jurisdiction over it, and defended itself on the claim’s
merits before any penalty was entered against it. In other words, its
rights were not negatively impacted in its absence because it was
not absent from the proceeding. So we need not determine whether
C.R.C.P. 19 applied under the Act.
C. Due Process
¶ 27 Due process and personal jurisdiction are inextricably linked.
“In fact, ‘the personal jurisdiction inquiry under Colorado law
collapses into the traditional due process inquiry.’” Rome, ¶ 22
(quoting Grynberg Petroleum Co. v. Evergreen Energy Partners, LLC,
485 F. Supp. 2d 1217, 1222-23 (D. Colo. 2007)). The hospital
contends that its right to due process was violated when the ALJ
permitted claimant’s request for penalties against it to proceed even
though it was not a party to the action. Again, we disagree.
¶ 28 “The fundamental requisites of due process are notice and the
opportunity to be heard.” Franz v. Indus. Claim Appeals Off., 250
P.3d 755, 758 (Colo. App. 2010) (quoting Hendricks v. Indus. Claim
Appeals Off., 809 P.2d 1076, 1077 (Colo. App. 1990)). Due process
requires “that the parties be apprised of all the evidence to be
submitted and considered, and that they be afforded a reasonable
16 opportunity in which to confront adverse witnesses and to present
evidence and argument in support of their position.” Hendricks,
809 P.2d at 1077. The due process clause protects against the
infringement of individual property and liberty interests — such as
the imposition of penalties against an entity — without notice and
an opportunity to be heard. See Whiteside v. Smith, 67 P.3d 1240,
1247 (Colo. 2003). But because it is a flexible standard, no specific
procedure is required “as long as the basic opportunity for a
hearing and judicial review is present.” Ortega v. Indus. Claim
Appeals Off., 207 P.3d 895, 899 (Colo. App. 2009); see also Kroupa
v. Indus. Claim Appeals Off., 53 P.3d 1192, 1195 (Colo. App. 2002);
Wecker v. TBL Excavating, Inc., 908 P.2d 1186, 1188 (Colo. App.
1995).
¶ 29 The hospital received claimant’s three applications for hearing
— two of which were rejected by the division — notifying the
hospital that claimant sought penalties against it and that a
hearing would be held on the matter. After the third application’s
acceptance, the division notified the hospital of the scheduled
hearing date. The hospital’s representative appeared at that
hearing with counsel, who offered documentary evidence,
17 questioned the hospital’s witnesses, cross-examined claimant’s
witnesses, and orally set out the hospital’s position for the ALJ.
Finally, after the hearing, the hospital submitted a position
statement detailing its arguments. Given that the due process
clause guarantees notice and the right to be heard, the hospital was
afforded all the requisite procedural protections. See Hendricks,
809 P.2d at 1077.
¶ 30 The two Panel decisions the hospital cites to support its
argument do not persuade us to reach a different conclusion. See
Caro v. Johnson Controls, Inc., W.C. No. 4-786-424, 2010 WL
2019859 (Colo. I.C.A.O. May 12, 2010); Weber v. Shiloh Homes,
W.C. No. 4-540-459, 2005 WL 3125896 (Colo. I.C.A.O. Nov. 14,
2005). The hospital argues that these Panel decisions establish
that ALJs cannot proceed against non-parties and that the Panel’s
decision in this case was contrary to its own precedent. We are not
persuaded.
¶ 31 First, we are not bound by the Panel’s decisions. See Olivas-
Soto v. Indus. Claim Appeals Off., 143 P.3d 1178, 1180 (Colo. App.
2006). And second, each of the Panel cases is distinguishable. In
Weber, the aggrieved non-party, a physician whose fees were
18 challenged as excessive by the claimant, was not included on the
certificate of mailing nor present at a pre-hearing conference
addressing the motion affecting him. 2005 WL 3125896, at *1. Nor
was he included on the ensuing orders’ certificates of service. Id.
Unlike the hospital here, the physician in Weber received neither
notice nor the opportunity to be heard, as required by the due
process clause.
¶ 32 Likewise, in Caro, the claimant attempted to seek penalties
directly against the division for allegedly refusing “to provide a
medical examiner with expertise in the requested medical field to
evaluate the claimant’s injury.” 2010 WL 2019859, at *2. But the
Panel did not hold that a penalty against the division was improper
because the division had not been joined as a party; instead, the
Panel ruled that it did not need to determine whether the ALJ had
jurisdiction over the division because the claimant’s claim and the
record before it were “insufficient as a matter of law to support any
order providing relief.” Id. at *3. Caro never answered the question
the hospital poses here and is inapposite to our analysis.
19 ¶ 33 We conclude that the hospital was not deprived of due process
when the ALJ considered and ruled on claimant’s request for
penalties against it. See Hendricks, 809 P.2d at 1077.
III. Claimant’s Cross-Appeal
¶ 34 Claimant contends that the Panel improperly ruled that the
statutory violations the hospital committed could not be classified
as continuing violations. She argues that the hospital’s actions
“constituted a continuous and unrelenting violation of [section] 8-
42-101(4), subject to daily penalties from June 13, 2019 through
October 9, 2019.” As explained above, if the hospital is subject to
penalties for a continuing violation during the period identified,
claimant would receive $83,000 more in penalties than if penalties
are assessed only for the eight dates on which the hospital
improperly billed claimant. Claimant argues that ample evidence
supported the ALJ’s original order finding the violation to be
continuing and that the Panel exceeded its authority by engaging in
factfinding when it re-categorized the violations as discrete, not
continuing, acts. We are not persuaded.
¶ 35 But we agree with claimant’s alternative assertion that ample
evidence supported an award of penalties against the hospital for
20 the two instances in which the hospital sent claimant’s bills to a
collection agency.
A. Continuing Violation
¶ 36 Section 8-43-305, C.R.S. 2020, permits daily penalties to be
imposed against an individual or entity for failure to comply with an
order. It states as follows:
Every day during which any employer or insurer, or officer or agent of either, or any employee, or any other person fails to comply with any lawful order of an administrative law judge, the director, or the panel or fails to perform any duty imposed by articles 40 to 47 of this title shall constitute a separate and distinct violation thereof. In any action brought to enforce the same or to enforce any penalty provided for in said articles, such violation shall be considered cumulative and may be joined in such action.
§ 8-43-305. “The purpose of section 8-43-305 is to address
‘ongoing conduct.’” Crowell v. Indus. Claim Appeals Off., 2012 COA
30, ¶ 12 (quoting Spracklin v. Indus. Claim Appeals Off., 66 P.3d
176, 178 (Colo. App. 2002)). When violative “conduct is ongoing,
imposition of a daily penalty is required.” Id.
¶ 37 As Crowell explained, continuing violations typically include a
delay in acting and can therefore “be cured by simply taking the
21 required action.” Id. at ¶ 14. Crowell identified numerous
examples of failures to act that would result in daily penalties for
continuing violations, including the following:
failure to pay medically necessary bills, Associated Bus.
Prods. v. Indus. Claim Appeals Off., 126 P.3d 323, 324,
326 (Colo. App. 2005), abrogated on other grounds by
Colo. Dep’t of Lab. & Emp. v. Dami Hosp., LLC, 2019 CO
47M;
failure to provide medical treatment, Pena v. Indus. Claim
Appeals Off., 117 P.3d 84, 86 (Colo. App. 2004);
failure to timely file a final admission of liability, Hum.
Res. Co. v. Indus. Claim Appeals Off., 984 P.2d 1194,
1196 (Colo. App. 1999); and
failure to provide a medical report to claimant, Diversified
Veterans Corp. Ctr. v. Hewuse, 942 P.2d 1312, 1313
(Colo. App. 1997).
The common thread running through these examples is that, in
each case, the offense could be corrected by taking the required
action. Simply put, “the difference between a one-time violation
22 and a continuing violation hinges on whether the violation is
subject to being cured by subsequent action.” Crowell, ¶ 13.
¶ 38 Claimant describes the hospital’s patient billing practices as
an ongoing act requiring no “affirmative action . . . to generate
individual bills.” She paints a picture of the hospital’s billing
practices as being “on continuous autopilot,” and argues that the
billing cycle could be cured “by simply rescinding its invoices and
halting all other internal and external . . . collection processes.”
¶ 39 But claimant’s characterization omits two crucial distinctions
between this situation and the continuing violations discussed in
Crowell. First, the hospital did not issue claimant a bill every day.
In contrast, continuing failures to pay for or provide medical care,
like those described in Crowell, occur each and every day that a
medical bill goes unpaid or treatment is delayed. See id. at ¶ 14;
Associated Bus. Prods., 126 P.3d at 324, 326; Pena, 117 P.3d at 86.
Although the hospital’s billing process generated several bills and
did so until it intervened to stop the system, the hospital only sent
claimant violative bills on eight discrete occasions.
¶ 40 Second, once a bill has been generated and sent, the violative
deed has been committed and cannot be undone. In other words,
23 improperly sending a bill to a claimant for covered care cannot be
cured because the bill cannot be “unsent.” See Crowell, ¶¶ 13, 14.
In contrast, a failure to pay a medical bill can be corrected once the
bill is paid. Given these differences, we conclude that the hospital
violated section 8-42-101(4) on the dates it or its agent generated
and sent a medical bill to claimant, but that it did not commit a
continuing violation within the scope of section 8-43-305.
¶ 41 Claimant also maintains that the Panel overstepped its
authority by rejecting the ALJ’s initial finding that the hospital’s
violations were continuing in nature. True, the Panel is bound by
the ALJ’s factual determinations if those findings are supported by
substantial evidence in the record. § 8-43-301(8), C.R.S. 2020;
Pella Windows & Doors, Inc. v. Indus. Claim Appeals Off., 2020 COA
9, ¶ 44. But, when an ALJ misconstrues or misapplies the law,
neither the Panel nor we are so bound. See Paint Connection Plus v.
Indus. Claim Appeals Off., 240 P.3d 429, 431 (Colo. App. 2010)
(“[A]n agency’s decision that misconstrues or misapplies the law is
not binding.”).
¶ 42 The ALJ misconstrued the nature of the bills and consequently
misapplied section 8-43-305. Because the hospital could not take
24 back the bills once they had been sent, it could not cure its
violation. Even though the ALJ found that the hospital committed a
continuing violation, that finding was based on a misapplication of
the law, so the Panel did not err by setting that finding aside. See
id.
B. Bills Sent to Collection Agency
¶ 43 Claimant alternatively contends that the Panel erred by
determining that the two instances in which a collection agency
attempted to collect payment from her could not serve as bases for
penalties. The Panel set aside the ALJ’s penalty award for the two
collection attempts on the grounds that (1) the hospital sent the
bills to the collection agency before it knew that claimant’s claim
had been ruled compensable; and (2) claimant failed to specifically
plead that her penalties claim was premised on the collection
attempts. It noted that the “assessment of a penalty for activity not
properly noticed is prohibited by statute, . . . the OAC rules, . . .
and standards of procedural due process.” We agree with claimant
that sufficient record evidence supported the ALJ’s finding that
these two collection attempts constituted incidents of improper
billing in violation of section 8-42-101(4).
25 ¶ 44 The Act mandates that “any application for hearing for any
penalty pursuant to subsection (1) of this section . . . shall state
with specificity the grounds on which the penalty is being asserted.”
§ 8-43-304(4). While claimant’s statement is broad, it put the
hospital on notice that its attempts to collect medical fees from
claimant after the ALJ had found the claim compensable violated
the Act. Claimant’s application for hearing cast a wide net by
paraphrasing section 8-42-101(4)’s prohibition against seeking “to
recover such costs or fees from the employee.” The September 2019
collection attempts fit under the umbrella of violative acts described
in the application for hearing. We conclude that the application
sufficiently notified the hospital that its billing of claimant,
including any collection attempts, subjected it to penalties.
¶ 45 Also, collection attempts fall within the scope of behavior the
Act prohibits. The Act forbids medical providers from “seek[ing] to
recover” medical costs and fees once liability for a claim attaches.
§ 8-42-101(4). The statute does not limit the prohibited acts to bills
mailed by a medical provider or affirmative actions taken by a
medical provider to collect on a bill. Instead, the Act broadly
incorporates any action that “seek[s] to recover” fees and costs.
26 Collection attempts are certainly efforts to recover fees and costs
and thus fall under the rubric of prohibited acts. True, the hospital
submitted the bills to the collection agency before it knew of the
ALJ’s compensability finding, but no evidence in the record
indicates the hospital contacted the collection agency to stop those
activities on learning of the order. And it appears undisputed that a
collection attempt was “last reported” in September 2019.
¶ 46 This evidence supports the ALJ’s finding that there were “two
additional instances of [the hospital] attempting to collect from the
claimant when two bills were forwarded to collections on September
20, 2019.” Where substantial evidence supports an ALJ’s factual
finding, the Panel is bound by it and may not set it aside. See Paint
Connection Plus, 240 P.3d at 431. We conclude that the Panel erred
when it set aside this finding.
IV. Conclusion
¶ 47 We therefore affirm the Panel’s order holding that daily
penalties, but not a continuing violation, could be assessed against
the hospital; set aside that portion of the Panel’s order rejecting
penalties for the bills sent to a collection agency; and remand the
case to the Panel with instructions to reinstate the ALJ’s award of
27 penalties for the two days collection attempts were instigated
against claimant.
JUDGE TERRY and JUDGE NAVARRO concur.