PATRICIA RIVET MURRAY, Judge.
In this workers' compensation case, the parties dispute an alleged underpayment of medical expenses by the employer, Jo Ellen Smith Convalescent Center ("Jo Ellen Smith"), to the treating health care provider, Avenue Surgical Suites. Jo Ellen Smith admits that it authorized the treatment, but it disputes the amount that it was billed for the treatment. Jo Ellen Smith contends that the reduced amount it tendered to Avenue Surgical Suites was equal to the usual and customary charge for the services provided and thus satisfied its obligation under the Workers' Compensation Act. From a judgment in Avenue Surgical Suites' favor awarding additional reimbursement of medical expenses, penalties, and attorneys' fees, Jo Ellen Smith appeals. For the reasons that follow, we amend the judgment to award additional attorneys' fees for the work performed on appeal and affirm the judgment as amended.
On December 21, 2008, Jennifer Muse sustained a work-related injury to her lower back while employed by Jo Ellen Smith. As a result of her injury, she was referred by her treating physician to Avenue Surgical Suites for pain management treatment, which her employer authorized.
In response to each bill, Risk Management tendered a check for $3,500 accompanied by an explanation of benefits form ("EOB").
In its recommendation letters, the Commission instructed that "[i]f any party disagrees with this recommendation, a formal dispute may be filed with the appropriate hearing office by filing LWC-WC-1008, Disputed Claim for Compensation."
In April 2010, Avenue Surgical Suites filed a 1008-Disputed Claim for Compensation seeking additional reimbursement from Jo Ellen Smith.
Jo Ellen Smith answered and asserted that it had fulfilled all its obligations under the Workers' Compensation Act and that it owed no further payments. It further asserted that it acted reasonably and in good faith in investigating and handling the claim.
On September 8, 2010, a trial was held at which Dr. Ming was the sole witness. At the close of the trial, the Office of Workers' Compensation ("OWC") found that the charges were reasonable and necessary and accepted the Commission's recommendation of payment in accordance with the Formula. The OWC thus ruled in favor of Avenue Surgical Suites awarding $17,310 for reimbursement of additional medical expenses,
It is well settled that factual findings in workers' compensation cases are subject to the manifest error or clearly wrong standard of appellate review. Winford v. Conerly Corp., 04-1278, p. 15 (La.3/11/05), 897 So.2d 560, 569; Dean v. Southmark Constr., 03-1051, p. 7 (La.7/6/04), 879 So.2d 112, 117; Masinter v. Akal Sec., Inc., 05-1236, p. 3 (La.App. 4 Cir. 6/07/06), 934 So.2d 201, 204. In applying the manifest error standard, the appellate court must determine not whether the fact finder was right or wrong, but whether the fact finder's conclusion was a reasonable one. Bell v. Mid City Printers, Inc., 10-0818, p. 7 (La.App. 4 Cir. 12/22/10), 54 So.3d 1226, 1232 (citing Banks v. Industrial Roofing & Sheet Metal Works, Inc., 96-2840, p. 6 (La.7/1/97), 696 So.2d 551, 556).
On appeal, Jo Ellen Smith asserts two assignments of error. First, it contends that Avenue Surgical Suites failed to meet its burden of proof that the medical services as invoiced were usual and customary in accordance with the Louisiana Workers' Compensation fee schedule. Second, it contends that it was not arbitrary and capricious in its reduced payment for medical services rendered by Avenue Surgical Suites; therefore, Avenue Surgical Suites is not entitled to penalties and attorneys' fees. We separately address each issue. We additionally address Avenue Surgical Suites' claim for additional attorneys' fees for work performed on appeal.
An employer's obligation to furnish medical expenses is governed by La. R.S. 23:1203, which provides that "the employer shall furnish all necessary drugs, supplies, hospital care and services, medical and surgical treatment, and any nonmedical treatment recognized by the laws of this state as legal." La. R.S. 23:1203(A). The
Pursuant to La.R.S. 23:1034.2, the director of the office of workers' compensation is given the responsibility of establishing a reimbursement schedule and adopting rules and regulations for the establishment and implementation of that schedule. "Should a dispute arise between a health care provider and the employee, employer, or worker's compensation insurer, the parties shall submit the dispute to the office in accordance with the provisions of law governing disputes." La. R.S. 23:1034.2(F).
Based on the above provisions, an employer's obligation is to pay medical expenses according to the fee reimbursement schedule or the actual charges, whichever is less. James v. A & B Builders, 09-0781, p. 7 (La.App. 1 Cir. 10/23/09), 29 So.3d 541, 545. In the absence of a reimbursement schedule, the starting point for an award of medical expenses is the actual charge. Manuel v. River Parish Disposal, Inc., 96-302, 96-303, p. 8 (La. App. 5 Cir. 10/1/96), 683 So.2d 791, 795.
It is undisputed that Jo Ellen Smith authorized the medical treatment in question and that Avenue Surgical Suites performed that treatment. The dispute is solely over the amount billed. The director of the office of workers' compensation administration has not established a reimbursement schedule for the specific procedures at issue. However, because Avenue Surgical Suites is an outpatient ambulatory surgical center, it is undisputed that the Formula set forth in § 2507 applies to these charges. As noted, the Formula is as follows: "(BILLED CHARGES) - (NONCOVERED CHARGES) = COVERED CHARGES ×.90 = PAYMENT AMOUNT." In this case, the EOBs did not indicate that any of the listed procedures that Dr. Ming performed on Ms. Muse were not covered; rather, the EOBs indicated that the charged amount for each procedure should be discounted. It is thus not disputed that the covered charge is equal to the billed charge of $10,300 per service date. Pursuant to the Formula, the payment amount is equal to 90% of $10,300 ($9,270). The OWC, agreeing with Avenue Surgical Suites, found the balance due is equal to $5,770 per treatment date ($9,270 minus the amount Jo Ellen Smith tendered, $3,500).
The only evidence in the record as to whether the actual charges were reasonable is the testimony of Dr. Ming, the head of Avenue Surgical Suite's pain management section who performed the procedures at issue and who developed the fee schedule used to bill for the procedures.
Dr. Ming testified that Avenue Surgical Suites is a state and federally licensed outpatient ambulatory surgical center located in New Orleans. In 2004, Dr. Ming, who is board certified in multiple areas including pain management, became head of the center's pain management section. In 2005, he developed a new fee schedule for the center; however, due to Hurricane Katrina the schedule was not implemented until 2007. The fee schedule remained in effect at the time of trial. Under the fee schedule, the center's charge for the primary core injection procedure, which goes into the brain and spinal core area, was set at $5,000. (As explained below, this fee included $3,000 for the costs associated with the procedure and $2,000 for the center to assume the risks.) Dr. Ming testified that for multiple injections the center followed "either the AMA Guidelines, or the workline Guidelines."
In developing the above fee schedule, Dr. Ming testified that he employed an unsophisticated cost-risk analysis. The cost component of his analysis was based on the number of procedures the center performed per week, the cost of the things the center used to perform those procedures, and the cost of things the center needed to have available in the event complications occurred. Insofar as the center's costs, Dr. Ming differentiated an outpatient surgical center from the back room of a doctor's office and from a hospital's outpatient facility. Dr. Ming explained that he totaled the center's fixed and variable costs—which were about $60,000 a week—and divided the total costs by the total number of procedures performed at the center each week—about twenty cases per week with half of those being interventional pain procedures. The cost per case was calculated to be $3,000.
Given the risk involved and the potential complications with interventional pain procedures, Dr. Ming testified that the center determined that $5,000 would be a fair charge for the primary core injection procedure—$3,000 for the costs, as determined above, and $2,000 for the center assuming the risks of performing the procedure. Dr. Ming testified that since the 1990s the number of malpractice claims for epidurals has tripled. He further testified that to minimize the risks and the potential complications Avenue Surgical Suites limited the number of interventional pain procedures it performed to ten per week.
After performing the cost-risk analysis, Dr. Ming determined that the fee schedule he had developed for the center was "in a competitive range." He testified that "we
Dr. Ming identified the data that his office compiled reflecting Avenue Surgical Suites' composite payment history for its workers' compensation cases that involved similar procedures. The data covered the period from 2007 to 2010 during which the fee schedule he developed was in place. The data included redacted explanation of benefit forms for these unrelated claims. Dr. Ming testified that the center generally collected between 85% to 90% of the invoiced amounts for these procedures. He explained that the center occasionally collected a lower amount. He acknowledged that on one occasion the center was only paid 22% and 32% because he missed the deadline to appeal.
On each of the three service dates Dr. Ming performed the same procedures on Ms. Muse. For safety reasons he does not put the patient to sleep for the primary core procedure, but he does give the patient sedation. He estimated that it takes him fifteen to thirty minutes to perform the procedure. He also sees the patient pre-operatively for fifteen to twenty minutes. Following the procedure, the patient has one-on-one nursing coverage through recovery. There is no follow-up examination, but there is a follow-up phone call. Dr. Ming testified that the entire cycle for each patient is about one hour. As to Ms. Muse, in particular, Dr. Ming testified that he did not recall her having any complications and thus she probably was in and out of the center in about one hour and fifteen minutes on each service date.
Turning to the bills in question, Dr. Ming testified that for each service date the center billed Jo Ellen Smith, through Risk Management, $10,300.
Dr. Ming was asked to compare the above four codes with those used in the historical payment data from 2007 to 2010, discussed above. He testified that only one of the four codes was different—the last one which states that this "reflect[s] a fair, current, and reasonable reimbursement amount based on comparisons to industry benchmarks and reimbursements for comparable services by national payors' payment schedules." Dr. Ming testified that this code was new. He also noted that when Avenue Surgical Suites sought reconsideration it also formally requested Risk Management's data and the methodology it used to calculate the reductions it made to the invoiced amounts. He explained that he wanted this information so that he could make a comparison and determine what the center was doing differently. Risk Management not only denied the request for reconsideration, but also failed to respond to the request for information.
Following the protocol, Avenue Surgical Suites then filed for a review with the Commission, which recommended that the reimbursement be made based on the Formula. The trial judge questioned Dr. Ming whether the Commission's recommendation was that Jo Ellen Smith pay 90% of the billed amount, $10,300. Answering in the affirmative, Dr. Ming explained:
Given Dr. Ming's testimony supporting the reasonableness of the charged amount coupled with the lack of any evidence to the contrary, we find no manifest error in the OWC's award of $17,310 in additional reimbursement of medical expenses to Avenue Surgical Suites.
The other issue Jo Ellen Smith raises on appeal is whether the OWC erred in awarding $6,000 ($2,000 per service date) in penalties and $2,500 in attorneys'
In its brief, Avenue Surgical Suites requests additional attorney fees for work performed on appeal. Although Avenue Surgical Suites failed to file an answer to the appeal, we have the authority to make such an award pursuant to La. C.C.P. art. 2164.
To determine the amount of attorneys' fees, factors that are considered include "the skill exercised by the attorney and the time and work required on appeal." Smith, 44,080 at pp. 11-12, 4 So.3d at 991 (citing Lewis v. Chateau D'Arbonne Nurse Care Center, 38,394 (La.App. 2 Cir. 4/7/04), 870 So.2d 515). Avenue Surgical Suites' counsel prepared and filed an appellate brief. As Avenue Surgical Suites acknowledged in its brief, this case does not present a close factual or legal issue. The parties did not request oral argument. Given these circumstances, we find it appropriate to award Avenue Surgical Suites $1,000 in attorneys' fees for additional work performed on appeal.
For the forgoing reasons, the judgment of the Office of Workers' Compensation is amended to award an additional $1,000 in attorneys' fees; and the judgment, as amended, is affirmed.
