Hargett v. Director, Div. of Labor, 90CA1754

• Decision Date: 08 October 1992
• Docket Number: No. 90CA1754,90CA1754
• Citation: 854 P.2d 1316
• Parties: Sharon HARGETT, Petitioner, v. DIRECTOR, DIVISION OF LABOR, The Industrial Claim Appeals Office of the State of Colorado, and Colorado Compensation Insurance Authority, Respondents. . I
• Court: Colorado Court of Appeals

Page 1316

854 P.2d 1316

Sharon HARGETT, Petitioner, v. DIRECTOR, DIVISION OF LABOR, The Industrial Claim Appeals Office of the State of Colorado, and Colorado Compensation Insurance Authority, Respondents.

No. 90CA1754.

Colorado Court of Appeals Div. I.

Oct. 8, 1992.

As Modified on Denial of Rehearing

Nov. 13, 1992.

Certiorari Denied June 14, 1993.

Dawes and Harriss, P.C., Robert C. Dawes, Durango, for petitioner.

Gale A. Norton, Atty. Gen., Raymond T. Slaughter, Chief Deputy Atty. Gen., Timothy M. Tymkovich, Sol. Gen., John R. Parsons, Asst. Atty. Gen., Denver, for respondents Director, Div. of Labor, and Industrial Claim Appeals Office.

Carolyn A. Boyd, Denver, for respondent Colorado Compensation Ins. Authority.

Opinion by Judge NEY.

This appeal raises questions of first impression regarding the statute and administrative rules governing medical utilization review in workers' compensation claims. Claimant, Sharon Hargett, contests an order of the Industrial Claim Appeals Panel requiring a change in her authorized health care provider, who had become her business associate. We affirm in part, set aside in part, and remand for further proceedings.

In September 1988, an Administrative Law Judge (ALJ) found claimant to be twenty percent permanently partially disabled as the result of an admitted industrial injury to her back. The ALJ found that claimant was unable to engage in full-time employment and ordered that respondents provide her with ongoing medical benefits pursuant to Grover v. Industrial Commission, 759 P.2d 705 (Colo.1988).

Thereafter, in January 1989, respondents filed a request for medical utilization review pursuant to Colo.Sess.Laws 1988, ch. 49, § 8-49-102 at 375 (subsequently amended and reenacted as § 8-43-501(5), C.R.S. (1992 Cum.Supp.)), to determine the medical necessity and appropriateness of the claimant's care. Claimant was sent a written notification advising her of the request and stating that she had thirty days to submit any medical reports that she considered relevant to the review.

By letter dated February 24, 1989, claimant's attorney submitted two medical reports from claimant's treating physician, Dr. Rik Heinz, D.C.

The three members of the medical utilization review committee unanimously agreed that claimant should not continue treatment with Dr. Heinz. Two of the committee members further recommended that (1) claimant should not receive additional medical treatment of any kind and (2) that payment to Dr. Heinz be denied retroactively pursuant to Colo.Sess.Laws 1988, ch. 49, § 8-49-102(3)(c) at 376, C.R.S. (now codified at § 8-43-501(3)(c)(II), C.R.S. (1992 Cum.Supp.)).

In accordance with the committee's action, the Director ordered a change of the claimant's authorized health care provider.

On May 18, 1989, the claimant sought review of the Director's order by filing an application for a hearing pursuant to Colo.Sess.Laws 1988, ch. 49, § 8-49-102(5) at 377 (subsequently amended and now codified at § 8-43-501(5), C.R.S. (1992 Cum.Supp.)). The Division of Labor denied the claimant's request for an evidentiary hearing, stating that review before an Administrative Law Judge (ALJ) under the statute was limited to an appellate review of the record.

In April 1990, an ALJ entered an order affirming the Director's order, and that order subsequently was affirmed by the Panel in September 1990.

The claimant perfected a timely appeal to this court. In reviewing the administrative file, claimant learned that the medical reports which she had submitted from Dr. Heinz were not included in the medical utilization review file. On claimant's motion, our court granted a remand of the case to permit the claimant to petition the Division for a reopening of the medical utilization review proceedings and reconsideration based on Dr. Heinz' reports. The petition to reopen was denied by the Director and the denial was affirmed by the Panel.

The claimant's amended notice of appeal seeks review of both the original medical utilization review proceeding and the denial of her petition to reopen those proceedings.

I.

Claimant contends the failure of the Division of Labor to provide her with a de novo hearing violated the terms of the medical utilization review statute then in effect, Colo.Sess.Laws 1988, ch. 49, § 8-49-102(5) at 375, and deprived her of constitutional due process. She argues that she is constitutionally and statutorily entitled to an evidentiary hearing concerning the effectiveness of the disputed treatment. We agree that claimant is entitled to an evidentiary hearing; however, we disagree that a de novo hearing is required under the medical utilization review statute.

A workers' compensation claimant is entitled to such medical benefits as are reasonably necessary to relieve the worker from the effects of an industrial injury or occupational disease. Grover v. Industrial Commission, supra. Therefore, a claimant's previously authorized workers' compensation benefits cannot be terminated without the protections of procedural due process. See Mathews v. Eldridge, 424 U.S. 319, 96 S.Ct. 893, 47 L.Ed.2d 18 (1976); see also City & County of Denver v. Eggert, 647 P.2d 216 (Colo.1982); Ellis v. City of Lakewood, 789 P.2d 449 (Colo.App.1989).

However, as we read the pertinent statute, the medical utilization review statute does not authorize a termination of previously authorized medical benefits. Rather, Colo.Sess.Laws 1988, ch. 49, § 8-49-102(3)(c) at 376 states in pertinent part:

For each case, a committee may recommend by a majority vote of such committee that no change be ordered with respect to a case or that a change of provider be ordered. A committee, by unanimous vote, may recommend that the director order that payment for fees charged for services in the case be retroactively denied. The director shall accept the recommendation of a committee and base his order entered pursuant to this section thereon. (emphasis added)

Thus, under the statutory language, as it then existed, the committee could only recommend 1) a change in medical provider and 2) a retroactive denial of fees for the present provider. The statute did not authorize the utilization review committee to recommend a termination of benefits; nor did it authorize the Director to order a termination of benefits based on the committee's recommendation.

We acknowledge that insofar as the committee is required to review the overall necessity and appropriateness of health care treatment, it could conclude that further treatment is no longer reasonably necessary. Similarly, we recognize that a change in health care provider may well result in the termination of a particular type of health care treatment. Here, for instance, the claimant wished to continue chiropractic care, whereas the respondents wanted claimant to be treated by an orthopedic physician. Or, the committee may conclude that a change in a health care provider within the same specialty is appropriate.

However, in such circumstances, we believe the remedy for the affected party is to request an evidentiary hearing under the hearing and review provisions of the Act. Section 8-53-103(1), C.R.S. (1986 Repl.Vol. 3B) provides in pertinent part:

Hearings shall be held to determine any controversy concerning any issue arising under articles 40 to 54 of this title. (emphasis added)

(subsequently amended and reenacted at § 8-43-207, C.R.S. (1992 Cum.Supp.)).

We note that under Colo.Sess.Laws 1986, ch. 49, § 8-49-102(5)(a) at 375, in effect here, a party to the utilization review proceeding "may appeal an order [of the Director] ... by requesting a hearing pursuant to article 53 of this title." However, Colo.Sess.Laws 1988, ch. 49, § 8-49-102(5)(b)(III) at 378 states that if a party appeals by requesting a hearing before an administrative law judge according to the provisions of article 53 of this title, the report of the utilization review committee upon which the director based his order ... shall be admissible in evidence, and if the report of the utilization review committee upon which the director based his order in the case under this section is supported by substantial evidence, the director's order shall not be altered by the administrative law judge. (emphasis added)

While the phrase "admissible in evidence" suggests an evidentiary, or de novo, hearing, the statute does not grant the ALJ any fact-finding authority; instead, the statute imposes an appellate standard of review and restricts the ALJ to determining whether the Director's order is supported by substantial evidence.

The statute is therefore ambiguous. A cardinal rule of statutory construction is that a legislative act must be construed as a whole to give a consistent, harmonious, and sensible effect to all its parts. Lucero v. Climax Molybdenum Co., 732 P.2d 642 (Colo.1987). If separate clauses within a statute or act may be harmonized by one construction, but would be antagonistic under a different construction, a construction which results in harmony rather than inconsistency should be adopted. People v. District Court, 713 P.2d 918 (Colo.1986). Likewise, a court must strive to construe a statute in a manner that upholds its constitutionality. Henderson v. RSI, Inc., 824 P.2d 91 (Colo.App.1991).

Because § 8-49-102 does not authorize a termination of medical benefits, we conclude that review to the ALJ under § 8-49-102 is limited to a review of the record to determine whether the Director's order is supported by substantial evidence. However, if the Director's order has terminated a particular type of benefits, e.g., chiropractic care, or if a party seeks to terminate medical benefits based on the review proceedings, the party aggrieved must seek appropriate relief by requesting an evidentiary hearing under § 8-53-103(1). In such cases, the ALJ will have full authority to review the matter de novo and to enter an appropriate order based on the evidence submitted.

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