Garcia v. McCord Gasket Corp.

• Decision Date: 20 June 1995
• Docket Number: Docket No. 97957,No. 7,7
• Citation: 449 Mich. 16,534 N.W.2d 473
• Parties: Mary GARCIA, Plaintiff-Appellee, v. McCORD GASKET CORPORATION, (Ex-Cell-O Corporation), and National Union Fire Insurance Co., Defendants-Appellants, and Fireman's Fund Insurance Co., Defendant-Appellee. Calendar
• Court: Michigan Supreme Court

Page 473

534 N.W.2d 473

449 Mich. 16

Mary GARCIA, Plaintiff-Appellee, v. McCORD GASKET CORPORATION, (Ex-Cell-O Corporation), and National Union Fire Insurance Co., Defendants-Appellants and Fireman's Fund Insurance Co., Defendant-Appellee.

Docket No. 97957.

Calendar No. 7

Supreme Court of Michigan.

Argued Dec. 7, 1994.

Decided June 20, 1995.

Richard B. Jenks, Southfield, (Daryl Royal, of counsel), Dearborn, for plaintiff.

Evans, Pletkovic, Hays & Rhodes, P.C. by John J. Hays, Huntington Woods, for defendants.

Frank J. Kelley, Atty. Gen., Thomas L. Casey, Sol. Gen., and Rose A. Houk and Ray W. Cardew, Jr., Asst. Attys. Gen., Lansing, for amicus curiae Michigan Bureau of Worker's Disability Compensation.

Opinion

LEVIN, Justice.

The question presented is whether the Worker's Compensation Appellate Commission erred in dismissing the employer's appeal for failure to pay medical benefits during the appeal. We hold that the WCAC did not err, and affirm the decision of the Court of Appeals ¹ affirming the dismissal by the WCAC.

I

The magistrate found that Mary Garcia was totally disabled and awarded worker's compensation benefits to be paid by defendant McCord Gasket Corporation. ² The order ³ provided that benefits were to be paid until the further order of the bureau, and that McCord shall also be "responsible for medical expense(s) pursuant to Section 315 ⁴ as follows: Any and all reasonable and necessary medical expenses related to plaintiff's back et sequelae."

A

As stated by the Court of Appeals, "[n]umerous disputes relating to the reasonableness and necessity of various medical treatments followed." ⁵ A year after the award was entered in January, 1990, a "petition to stop benefits" was filed by McCord on January 8, 1991. A month later, on February 5, 1991, Garcia moved for dismissal of McCord's appeal to the WCAC from the magistrate's decision asserting that McCord had "refused and denied payment of medical benefits required by the terms of the award" ⁶ contrary to § 862(2), which provides that the filing of a claim for review of a magistrate's decision "shall not operate as a stay of providing medical benefits" awarded by the magistrate, and that medical benefits shall be paid from and after the date of the award until final determination of the appeal. ⁷

McCord responded to Garcia's motion to dismiss, stating that it had "considered all requests for payment of medical benefits and [had] paid those which were reasonable and necessary in accordance" with the magistrate's decision, and had "denied payment on other requests which are not reasonable or necessary...." ⁸ McCord did not specify which "requests for payment" had been paid, and which had been denied, nor did it specify why a particular request was not reasonable or necessary.

McCord asserted that § 862(2) provides only for furnishing medical benefits "required by the terms of the award," ⁹ that the magistrate's award in the instant case "does not provide the terms by which medical benefits would be required," and that the award provided "no guidance" concerning "which medical providers and care and treatment [were] necessary or which amount was reasonable." ¹⁰

B

The WCAC, on June 20, 1991, ordered McCord to provide it within thirty days "an affirmation of the bills that have been received, the date the medical services were provided, and a showing that the bills have been paid pursuant to the magistrate's order of January 22, 1989, awarding reasonable and necessary medical expenses related to plaintiff's back. Failure to provide timely compliance with MCL 418.862(2) shall subject defendants' appeal to dismissal." (Emphasis added.)

McCord did not provide the affirmation of bills received and dates medical services were provided, and did not show that such bills had been paid. Rather, McCord responded on July 17, 1991, to the WCAC order by filing a motion to remand and consolidate or hold in abeyance, stating that disputes had arisen concerning the portion of the award requiring payment of reasonable and necessary medical expenses, and stating:

What expenses or treatment are "reasonable and necessary" were not spelled out in the Magistrate's decision and, therefore, has [sic] been a matter of differing interpretation. Defendant submits that it has paid all "reasonable and necessary" expenses since the date of the Magistrate's decision.

McCord's motion noted that a hearing was scheduled for July 31, 1991, on its application for a hearing objecting to the reasonableness and necessity of the medical expenses being claimed by Garcia. The motion continued that § 315 ¹¹ provides that all fees and charges for treatment were subject to the health care services rules, that those rules provide for resolving disputes between carriers and health care providers, ¹² and that rule 1904(6), ¹³ concerning the continuation of medical benefits during an appeal, provides for expedited treatment accorded to sixty- day cases when a carrier files an application to stop or limit its liability. ¹⁴

The WCAC, on August 30, 1991, denied the motion for remand and consolidation or to hold in abeyance, and granted Garcia's motion to dismiss the appeal for failure to comply with § 862(2) and the WCAC's order of June 20, 1991. ¹⁵

C

The Court of Appeals affirmed the dismissal, holding that the WCAC has the implied authority to dismiss for noncompliance with § 862(2), citing this Court's decision in McAvoy v. H. B. Sherman Co., 401 Mich. 419, 258 N.W.2d 414 (1977). ¹⁶

The majority said that when McCord "refused to pay the medical bills as required" by the magistrate's and WCAC's orders, it subjected itself "to the possibility of a dismissal as stated in the commission's order." ¹⁷

One of the judges on the panel dissented. He said that if the only question presented was whether the WCAC, "under its implied power to enforce § 862(2)," could properly dismiss an appeal by an employer who ignores a magistrate's order requiring payment of medical benefits, he would join in the majority. He dissented because § 315 contemplates that the employer's insurance carrier will "monitor closely medical treatment for injured workers with an eye to detecting both charges in excess of the schedules of maximum fees promulgated by the agency and any overutilization." ¹⁸

The dissenting judge said that the "problem in this case" was that the magistrate's order was not "clear enough to make apparent what medicalexpenses are required." It "merely recapitulates the statutory language" that obligates the employer to pay reasonable and necessary medical expenses under § 315, "albeit confining that obligation to plaintiff's back condition. The award does not indicate what particular medical treatment ought to be included, nor does it provide criteria from which it could reliably be determined by the appellants, either in advance or in retrospect, that a particular prognosticated treatment, prosthetic, or prophylactic is within the magistrate's concept of 'reasonable and necessary' medical treatment related to plaintiff's back." ¹⁹

II

McCord notes that § 862(2) does not expressly provide that the WCAC may dismiss an employer's appeal for failure to continue to provide medical benefits "until final determination of the appeal," and contends that it lacks such power. We agree with the Court of Appeals, for essentially the same reasons set forth in McAvoy, that the WCAC has the implied authority to dismiss appeals for noncompliance with § 862(2).

III

We affirm the decision of the Court of Appeals affirming the order of the WCAC dismissing McCord's appeal because § 862(2) and rule 1904(6) required McCord's insurer to continue to provide medical benefits awarded by a magistrate during the pendency of an appeal until a different order was entered by a magistrate, the WCAC, the Court of Appeals, or this Court. Rule 1904(6), paralleling § 862(2), provides in effect that the insurer's filing of an application to stop or limit its liability does not operate as a stay, but entitles the insurer to expedited treatment.

Nor do we find the award to be ambiguous because it does not spell out the precise treatment that is within the ambit of "[a]ny and all reasonable and necessary medical expenses related to plaintiff's back et sequelae." Four doctors, three of whom were specialists who had treated Garcia and one of whom appears to have coordinated the treatment, testified concerning their findings and the treatments they had administered. Their testimony provided context for the language of the order, "reasonable and necessary medical expenses related to plaintiff's back et sequelae." McCord's insurer was obliged to "continue to provide," until a different order was entered by a magistrate, the WCAC, the Court of Appeals, or this Court, treatments for Garcia's back that were similar to those that her physicians, before the award, had provided as described in their testimony.

Magistrates do not ordinarily, if ever, spell out in an initial award of worker's compensation the particular treatments to be administered by an injured worker's physicians. The hearing, as here, may have concluded over a year before the award was entered. The patient, as here, may have moved from one physician to another. Different physicians often recommend and administer different treatments for the same ailment. The worker's condition may have worsened or improved, requiring a change in treatment. A magistrate's award cannot properly be faulted as ambiguous because it does not spell out the precise treatments to be administered in the future by the worker's physicians.

A

Section 315(4) provides that a worker's compensation insurer shall not pay a provider of medical services for any excessive charges or unjustified treatment, and that a provider shall return payments for excessive charges or unjustified treatment. ²⁰ Section 315 further provides that fees and other charges for medical treatment of injured...