Ceres Marine Terminals v. Armstrong

• Decision Date: 06 March 2012
• Docket Number: Record No. 1603–11–2.
• Citation: 59 Va.App. 694,722 S.E.2d 301
• Court: Virginia Court of Appeals
• Parties: CERES MARINE TERMINALS and Atlantic Mutual Insurance Company v. Eldon ARMSTRONG, Jr. and Jordan Young Institute.

59 Va.App. 694

722 S.E.2d 301

CERES MARINE TERMINALS and Atlantic Mutual Insurance Company

v.Eldon ARMSTRONG, Jr. and Jordan Young Institute.

Record No. 1603–11–2.

Court of Appeals of Virginia, Richmond.

March 6, 2012.

Lawrence J. Postol (Seyfarth Shaw, LLP, on brief), for appellants.

Zenobia J. Peoples, Richmond, for appellee Jordan Young Institute.

No brief or argument for appellee Eldon Armstrong, Jr.

Present: PETTY, BEALES and HUFF, JJ.

PETTY, Judge.

Ceres Marine Terminals and its insurance carrier (collectively “employer”) appeal the Workers' Compensation Commission's decision awarding the payment of $25,664.22 to the Jordan Young Institute (“medical provider”) for medical services rendered to Eldon Armstrong, Jr., under a workers' compensation award. The medical provider performed surgery on Armstrong and billed the employer $30,013.75. However, the employer paid only $5,123.76 of the bill. Thereafter, the commission entered an award for the unpaid balance of the medical bill after the medical provider requested it to do so.

On appeal, the employer raises the following assignments of error. First, “[t]he Commission erred in limiting its review to the issue of prevailing rates, when the Employer also challenged what was the Medical Provider's regular rate, and what is a reasonable rate.” Second, “[t]he Commission erred in not considering the Longshore Fee Schedule as evidence of the prevailing rate.” Third, “[t]he Commission erred in finding the claim was timely and not barred by laches, when the claim for medical benefits was filed over four years after the medical services were provided, and the physician was no longer available, and the records were no longer available. The Commission also erred in not barring the claim for spoilage of evidence....” ¹ As set forth in further detail below, we find no error in the commission's decision. Therefore, we affirm.

I. BACKGROUND

Armstrong suffered a compensable injury by accident on July 14, 2000. ² To treat that injury, a surgeon and his assistant employed by the medical provider performed surgery on Armstrong on January 6, 2005. The medical provider submitted a bill to the employer for the services of the surgeon and his assistant in the amount of $30,013.75. On or around May 12, 2009, the employer paid $5,123.75. In an “Explanation of Benefits” accompanying the payment, the employer explained that it was paying an amount consistent with the Longshore and Harbor Workers' Compensation Medical Fee Schedule, which the employer contended is based upon the same rate set by the federal government under Medicare. On September 22, 2009, the medical provider sent a letter to the commission acknowledging that it had provided treatment to Armstrong under the commission's award and asking the commission to enter an additional award ordering the payment of the balance of the medical bill.

A deputy commissioner considered evidence and argument from the parties on this matter. This evidence included the depositions of Lori Delbridge and Evelyn Thomas, which the deputy commissioner received de bene esse. The employer deposed Delbridge so that it could determine how the medical provider arrived at the billed amount of $30,013.75, and it deposed Thomas to further explain the nature of the fee schedule.

Delbridge was as an employee of the medical provider and was knowledgeable in its billing practices. In response to questions from the employer, she testified that about 50% of the medical provider's patients were on Medicare. Had Armstrong been a Medicare patient rather than a recipient of a workers' compensation award, she confirmed that the medical provider would have accepted the reduced payment of $5,123.75 as “payment in full” for the charges. Moreover, had Armstrong's claim been submitted under the Longshore and Harbor Workers' Compensation Act, Delbridge agreed that the medical provider would have also accepted this amount as “payment in full.” However, Delbridge further explained that had Armstrong been covered by Cigna, a private insurance carrier that covered some of its patients, then the medical provider would have “asked for 100% of the charges,” or in other words, would have billed the amount it billed the employer, $30,013.75.

Thomas was an employee of the employer working in the employer's workers' compensation department. The employer called Thomas in an attempt to establish the purpose of the Longshore and Harbor Workers' Compensation Medical Fee Schedule. Thomas first verified an exhibit as the fee schedule as it appeared on the U.S. Department of Labor website. She also stated that it was her understanding that the fee schedule was based upon, or the same as, the Medicare fee schedule. The employer then asked her the following question: “So, again, just so the Commission understands, Medicare assigns what they consider to be the relative value of a particular procedure?” In response, Thomas replied, “Right.” She finally testified that the payment of $5,123.75 for the surgery performed on Armstrong was the amount set forth in the fee schedule for the geographic region where the surgery took place.

The deputy commissioner found that the employer “failed to rebut the medical provider's prima facie evidence,” i.e., the medical bill, and that the evidence presented by the employer was insufficient to prove the prevailing rate in the community and thereby relieve itself of liability for the unpaid balance of the bill. As the deputy explained it, the employer “presented no evidence of the rates charged by other physicians [for Armstrong's procedure] in the cities of Norfolk, Virginia Beach, Chesapeake, Suffolk, Portsmouth, Hampton, Newport News, and Williamsburg for the same or similar services.” The deputy also found that laches, spoliation of evidence, and the time limitations set forth in Code § 65.2–708 did not apply. Accordingly, the deputy entered an award in favor of the medical provider and against the employer for the unpaid balance of the medical bill, $25,664.22. The full commission agreed and affirmed the deputy commissioner. This appeal followed.

II. ANALYSIS

A. The Medical Bill and the Prevailing Rate in the Community

In its first and second assignments of error, the employer challenges the commission's finding that the employer failed to prove that the medical bill for the surgery performed on Armstrong exceeded the prevailing rate in the community for that surgery. In so doing, the employer raises several arguments. The employer first argues that the commission improperly placed the burden of proof on the employer to prove the excessiveness of the amount charged in the medical bill. The employer further argues that the commission should have accepted the fee schedule as evidence of the prevailing rate in the community. Finally, the employer argues that the medical bill was inconsistent with a “reasonable” rate or the rate ordinarily charged by the medical provider, regardless of whether the medical bill reflected the prevailing rate in the community, and that the commission should have denied the award on that basis.

As set forth in further detail below, we disagree with the employer. The commission properly characterized the medical bill as prima facie evidence that the charged fee was consistent with the requirements of the Workers' Compensation Act. In the face of that evidence, the commission properly placed the burden of proving the excessiveness of the amount of the bill on the employer. Further, the commission correctly determined that the mere submission of the amount payable for Armstrong's surgery under the Longshore and Harbor Workers' Compensation Medical Fee Schedule, without more, was insufficient evidence of the prevailing rate in the community. Finally, the commission appropriately limited its review of the amount to whether the amount exceeded the prevailing rate in the community for the treatment.

1. Burden of Proof

We first address whether the employer had the burden of proving that the medical bill was excessive. As we explain in further detail below, we hold that it did.

Whether a particular party bears the burden of proving a particular issue requires us to “construct,” or interpret, the Workers' Compensation Act. See Fairfax Cnty. Sch. Bd. v. Humphrey, 41 Va.App. 147, 155, 583 S.E.2d 65, 68 (2003) (characterizing an issue relating to the proceeding before the commission as a question of construction of the Workers' Compensation Act). “ ‘The commission's construction of the Act is entitled to great weight on appeal.’ ” Id. (quoting Cross v. Newport News Shipbuilding & Dry Dock Co., 21 Va.App. 530, 533, 465 S.E.2d 598, 599 (1996)). Moreover, the commission is not bound by common law rules of evidence, but may adopt whatever procedures it sees fit so long as they “ ‘protect the substantial rights of the parties.’ ” Rios v. Ryan Inc. Cent., 35 Va.App. 40, 44–45, 542 S.E.2d 790, 791–92 (2001) (quoting Sergio's Pizza v. Soncini, 1 Va.App. 370, 376, 339 S.E.2d 204, 207 (1986)). However, “ ‘[w]hile we generally give great weight and deference, on appeal, to the commission's construction of the Workers' Compensation Act, we are not bound by the commission's legal analysis in this or prior cases.’ ” Humphrey, 41 Va.App. at 155, 583 S.E.2d at 68 (quoting Peacock v. Browning Ferris, Inc., 38 Va.App. 241, 248, 563 S.E.2d 368, 372 (2002)). Ultimately, though, we must always remember the humanitarian purpose of the Act, which seeks to provide compensation and medical treatment to employees for injuries they have sustained in the course of and arising out of their employment. See Metro Mach. Corp. v. Sowers, 33 Va.App. 197, 209, 532 S.E.2d 341, 347 (2000). Accordingly, “[t]he Act should be liberally construed in harmony with [this] humane purpose.” Id.

In light of these considerations, we begin our review with the relevant portions of the Workers' Compensation Act. Under Code § 65.2–603, if the commission enters an...