Appellate Court Now Handling WC Issues, Sort Of

Tuesday, October 1, 2013 | 0

In this ruling, the Illinois Appellate Court weighed in on workers' compensation fee schedule payments in a ruling that should discourage balance billing and may encourage more detail in settlement documents. Attorneys on the other side of the bar should know and understand this important ruling that might lead to malpractice claims or Attorney Registration and Discipline Commission complaints if they don’t fully explain such issues to their clients.
 
In Tiburzi Chiropractic v. Kline, 2013 IL App (4th) 121113 (Sept. 16, 2013), which was appealed from the Circuit Court of Macoupin Co., plaintiff Tiburzi Chiropractic filed a small-claims complaint against defendant David Kline to collect the balance of chiro fees charged following the performance of chiropractic services, which were alleged as workers' compensation. In November 2012, the Circuit Court found in favor of the plaintiff and ordered the defendant to pay $2,155 with that award being the subject of this appeal. Defendant argued the trial court erred in entering a money judgment in favor of plaintiff. The Appellate Court modified and affirmed an award for a lower value.
 
Briefly as background, in October 2008, defendant Kline alleged an injury working for third-party defendant, Rovey Seed Co., and filed a workers' compensation claim, with a portion of his claim alleging treatment sought and received from plaintiff's chiro office in Carlinville was related. In August 2010, Kline and Rovey Seed entered into a settlement contract whereby Rovey Seed agreed to satisfy, pursuant to the Illinois workers' compensation fee schedule, all medical bills for medically causally related treatment received on or before June 10, 2010. Obviously, some chiro billing went unpaid.
 
In March 2011, plaintiff Tiburzi filed a small-claims complaint against its patient Kline, alleging Kline owed $2,336.60 for an overdue account related to those chiro services. In May 2012, Kline filed a petition and application under Section 19(g) of the Workers' Compensation Act (Act) (820 ILCS 305/19(g) (West 2010)) for judgment on a workers' compensation award. Defendant attached a certified copy of the final award to the petition. Kline also demanded Rovey Seed pay all such bills pursuant to the fee schedule, and Rovey Seed claimed it made full payment. In July 2012, the trial court entered an order on Kline’s section 19(g) petition and found Rovey Seed had made full payment pursuant to the terms of the settlement contract, including payment pursuant to the fee schedule and section 8 of the Act. The court held Kline and Rovey Seed had met all of their obligations under the Illinois Workers' Compensation Act. The court denied Kline’s demand for additional payment, costs, fees and interest because of the payments. It was noted after the 19(g) filing, Rovey Seed conducted utilization review and paid a portion of the Tiburzi chiro bill according to the fee schedule.
 
One apparent twist in this case is that Tiburzi testified, when Kline came to his first visit, he doubted any prospective treatment by him for Kline would qualify for payment under the Illinois Workers' Compensation Act because he was the third physician — he knew such care might be owed by the patient, consistent with Section 8 (a-3) of the Illinois Workers' Compensation Act. Tiburzi testified Kline requested a specific type of treatment, and Kline advised Tiburzi his attorney affirmatively advised he would be paid for the treatment under the Workers' Compensation Act. Tiburzi advised Kline he would accept him as a patient; however, he would be personally required to pay the cost for treatment in full if it was not covered by the workers' compensation insurance carrier. Tiburzi testified the parties reached an oral agreement to that effect, and Kline signed an agreement consistent with the parties' oral statement guaranteeing payment in full as a private pay patient. Tiburzi testified on several occasions he submitted his bill, in the amount of $3,000, to the employer's workers' compensation insurance company and their workers' compensation carrier, according to Tiburzi, paid $663.40 and he applied that amount to the bill.
 
In the proceeding before the Illinois Appellate Court, Kline argued the trial court erred in entering a money judgment in favor of Tiburzi for treatment rendered under and paid pursuant to the Illinois Workers' Compensation Act based on the private-pay agreement. Kline argued Section 8(a) of the Act (820 ILCS 305/8(a) (West 2006)), entitled recovery of reasonable medical expenses, the incurrence of which are causally related to an accident arising out of and in the scope of employment and which were necessary to diagnose, relieve or cure the effects of the claimant's injury. They also noted medical expenses are governed by section 8(a) of the Act (820 ILCS 305/8(a) (West 2010)), which states, in part, as follows:
 
The employer shall provide and pay the negotiated rate, if applicable, or the lesser of the health care provider's actual charges or according to a fee schedule, subject to Section 8.2, in effect at the time the service was rendered for all the necessary first aid, medical and surgical services, and all necessary medical, surgical and hospital services thereafter incurred, limited, however, to that which is reasonably required to cure or relieve from the effects of the accidental injury.
 
Kline further noted pursuant to the act, the employer must adjust the medical bills to conform to the fee schedule found in Section 8.2. 820 ILCS 305/8.2 (West 2010) and “Except as provided under subsections (e-5), (e-10), (e-15), and (e-20), a provider shall not bill or otherwise attempt to recover from the employee the difference between the provider's charge and the amount paid by the employer or the insurer on a compensable injury." 820 ILCS 305/8.2(e) (West 2010). This is the “balance billing” proscription in our law.
 
Tiburzi relied on the exception in subsection (e-20) (820ILCS 305/8.2(e-20) (West 2010)), which states as follows:
 
Upon a final award or judgment by an arbitrator or the (Illinois Workers' Compensation) Commission, or a settlement agreed to by the employer and the employee, a provider may resume any and all efforts to collect payment from the employee for the services rendered to the employee and the employee shall be responsible for payment of any outstanding bills for a procedure, treatment, or service rendered by a provider as well as the interest awarded under subsection (d) of this Section. In the case of a procedure, treatment, or service deemed compensable, the provider shall not require a payment rate, excluding the interest provisions under subsection (d), greater than the lesser of the actual charge or the payment level set by the Commission in the fee schedule established in this Section. Payment for services deemed not covered or not compensable under this Act is the responsibility of the employee unless a provider and employee have agreed otherwise in writing. Services not covered or not compensable under this Act are not subject to the fee schedule in this Section.
 
The Appellate Court agreed any compensable services under the act were not recoverable and noted contrary to Tiburzi's argument, it did not truly treat defendant as a private-pay patient and did submit billing to Kline's workers' compensation insurance carrier. Since evidence reflected that except for 20 cold packs ($10 each), the chiropractic services were deemed compensable by the insurer and were paid at the fee-schedule rate, and Tiburzi was not entitled to the balance due for the compensable care. However since the workers' compensation insurer paid nothing for the 20 cold packs, Tiburzi was therefore entitled to judgment in the amount of $200, plus costs for a total of $345. Legal fees for both sides through the two levels of the judiciary had to be exponentially higher.
 
Arguably the biggest take-away from this case for both sides of the bar is payment under the fee schedule should end any responsibility for balance bill payments, and as the petitioner bar is likely to receive the initial balance bills in most claims, we suggest a letter citing this ruling to confirm the Appellate Court will not award balance bills over the fee schedule. From the medical provider standpoint, they would have been better positioned by billing petitioner directly once they formed the opinion the treatment may not be compensable under workers' compensation.
 
We also feel it's important for petitioner’s attorneys to discuss “private pay” agreements with their clients and insure the client is fully advised of the pertinent issues. Failure to anticipate such problems may lead to protracted litigation, hurt feelings and judgments such as the one in this claim. It might all have been avoided by full discussion of the matters raised in this ruling.

Shawn R. Biery is a partner with Keefe, Campbell, Biery and Associates, a Chicago-based workers' compensation defense firm. This column was reprinted with the firm's permission from its weekly newsletter.