[J-18A-2021 and J-18B-2021]
IN THE SUPREME COURT OF PENNSYLVANIA
EASTERN DISTRICT
BAER, C.J., SAYLOR, TODD, DONOHUE, DOUGHERTY, WECHT, MUNDY, JJ.
KEYSTONE RX LLC, : No. 27 EAP 2020
:
: Appeal from the order of
v. : Commonwealth Court entered on
: December 12, 2019 at No. 1369
: CD 2018 (reargument denied on
BUREAU OF WORKERS' COMPENSATION : January 30, 2020) affirming the
FEE REVIEW HEARING OFFICE : Order entered on September 12,
(COMPSERVICES INC./AMERIHEALTH : 2018 by the Bureau of Workers'
CASUALTY SERVICES) : Compensation at No. DSP-
: 7388753-4.
:
APPEAL OF: : ARGUED: April 13, 2021
COMPSERVICES/AMERIHEALTH :
CASUALTY SERVICES :
KEYSTONE RX LLC : No. 28 EAP 2020
:
: Appeal from the order of
v. : Commonwealth Court entered on
: December 12, 2019 at No. 1369
: CD 2018 (reargument denied on
BUREAU OF WORKERS' COMPENSATION : January 30, 2020) affirming the
FEE REVIEW HEARING OFFICE : Order entered on September 12,
(COMPSERVICES INC./AMERIHEALTH : 2018 by the Bureau of Workers'
CASUALTY SERVICES) : Compensation at No. DSP-
: 7388753-4.
:
APPEAL OF: BUREAU OF WORKERS' : ARGUED: April 13, 2021
COMPENSATION FEE REVIEW HEARING :
OFFICE :
OPINION
CHIEF JUSTICE BAER DECIDED: December 22, 2021
In this workers’ compensation matter, the Bureau of Workers’ Compensation Fee
Review Hearing Office (“Hearing Office”) concluded that, in the fee review setting, a non-
treating healthcare provider, like a pharmacy, cannot challenge a utilization review (“UR”)
determination that medications prescribed by a treating healthcare provider, such as a
physician, but dispensed by the non-treating entity, were unreasonable and unnecessary
for the treatment of a claimant’s work-related injury. The Commonwealth Court affirmed
the Hearing Office’s order. However, after reaching this result, the intermediate court
held that for UR procedures occurring in the future, when an employer, insurer or an
employee requests UR, non-treating providers, such as pharmacies, must be afforded
notice and an opportunity to establish their right to intervene in the UR proceedings.
Keystone Rx LLC v. Bureau of Workers’ Comp. Fee Review Hearing Office
(Compservices Inc.), 223 A.3d 295, 299 (Pa. Cmwlth. 2019) (“Keystone Rx”). While we
affirm the Commonwealth Court’s result, we respectfully reject its prospective holding that
non-treating healthcare providers must be given notice and an opportunity to intervene in
UR proceedings.
By way of a statutory background, Section 306(f.1)(1)(i) of the Workers’
Compensation Act (“Act”) requires employers and their insurers to pay the costs of
“reasonable surgical and medical services, . . . medicines[,] and supplies as and when
needed” for work injuries sustained by their employees. 77 P.S. § 531(1)(i). The Act
provides that disputes regarding the “reasonableness or necessity of treatment by a
health care provider” shall be resolved by a UR, i.e., utilization review, “at the request of
an employe, employer, or insurer.” 77 P.S. § 531(6)(i). URs are conducted by health
care providers “licensed in the same profession and having the same or similar specialty
as that of the provider of the treatment under review.” 77 P.S. § 531(6)(i).1
1 This subsection of the Act states as follows:
Except in those cases in which a workers’ compensation judge asks for an
opinion from peer review under Section 420, disputes as to reasonableness
or necessity of treatment by a health care provider shall be resolved in
accordance with the following provisions:
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If a treating “provider, employer, employe or insurer” disagrees with the result of
the UR, a petition for review must be filed. See 77 P.S. § 531(6)(iv) (explaining that in
disputes as to reasonableness or necessity of treatment, if “the provider, employer,
employe or insurer disagrees with the finding of the utilization review organization, a
petition for review by the department must be filed within thirty (30) days after receipt of
the report”). The Act dictates that, after a petition for review is filed by one of these parties,
a workers’ compensation judge (“WCJ”) must hold a hearing at which the WCJ may make
recommendations that will control only if all parties agree that the WCJ’s
recommendations will be binding. 77 P.S. § 711.1. The Act does not permit non-treating
providers that deliver services in conjunction with a claimant’s medical treatment, such as
pharmacies, to participate in the UR process. The Act, however, contains a fee review
process that allows these non-treating entities to dispute “the amount or timeliness of the
payment from the employer or insurer.” 77 P.S. § 531(5).2
(i) The reasonableness or necessity of all treatment provided by a
health care provider under this act may be subject to prospective,
concurrent or retrospective utilization review at the request of an
employe, employer or insurer. The department shall authorize
utilization review organizations to perform utilization review under this
act. Utilization review of all treatment rendered by a health care
provider shall be performed by a provider licensed in the same
profession and having the same or similar specialty as that of the
provider of the treatment under review. Organizations not authorized
by the department may not engage in such utilization review.
77 P.S. § 531(6)(i).
2 This subsection of the Act states as follows:
The employer or insurer shall make payment and providers shall submit bills
and records in accordance with the provisions of this section. All payments
to providers for treatment provided pursuant to this act shall be made within
thirty (30) days of receipt of such bills and records unless the employer or
insurer disputes the reasonableness or necessity of the treatment provided
pursuant to paragraph (6). The nonpayment to providers within thirty (30)
days for treatment for which a bill and records have been submitted shall
only apply to that particular treatment or portion thereof in dispute; payment
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Turning to the factual background of this case, Thomas Shaw (“Claimant”), an
employee of the Roman Catholic Archdiocese of Philadelphia (“Employer”), suffered a
workplace-related left knee injury in 2014.3 Claimant sought and received medical care
from a physician, Dr. Bradley Ferrara (“Physician”), including prescriptions for
medications starting in April of 2015 and continuing until at least April of 2017. Keystone
Rx LLC (“Pharmacy”) dispensed the medications to Claimant and billed Employer’s
insurer, Compservices/AmeriHealth Casualty Services (“Insurer”).
Insurer filed a UR request in 2017 regarding medical treatment, including
medications prescribed by Physician and dispensed by Pharmacy, that Shaw received
after November 2, 2016. Because Pharmacy was not a treating provider for purposes of
the UR procedures of the Act, it was not a party to the UR process. The result of the UR
was a determination that all treatment rendered by Physician after November 2, 2016,
including the prescribed medications that Pharmacy dispensed to Claimant, was
unreasonable and unnecessary because it was unrelated to Claimant’s workplace injury.
Claimant filed two petitions to review the UR determination, but those petitions were later
withdrawn pursuant to a Compromise and Release (“C&R”) Agreement that resolved
Claimant’s then-pending claims but left open whether he could receive future medical
must be made timely for any treatment or portion thereof not in dispute. A
provider who has submitted the reports and bills required by this
section and who disputes the amount or timeliness of the payment
from the employer or insurer shall file an application for fee review
with the department no more than thirty (30) days following
notification of a disputed treatment or ninety (90) days following the
original billing date of treatment. If the insurer disputes the
reasonableness and necessity of the treatment pursuant to paragraph (6),
the period for filing an application for fee review shall be tolled as long as
the insurer has the right to suspend payment to the provider pursuant to the
provisions of this paragraph. Within thirty (30) days of the filing of such an
application, the department shall render an administrative decision.
77 P.S. § 531(5) (emphasis added).
3 Employer is not a party to this appeal.
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coverage for his workplace injury. This outcome meant that Insurer was not required to
pay Pharmacy under the Act for the aforementioned medications that Pharmacy provided
to Claimant.
Pharmacy then filed the two applications for fee review that are at issue in this
appeal. The Medical Fee Review Section of the Department of Labor and Industry (“Fee
Review Section”) held a hearing on the applications, after which it concluded that Insurer
owed Pharmacy over $4,000 for providing Claimant the medications at issue in this case.
Insurer sought and was granted a hearing to contest this conclusion, as it believed that
any need for these medications was unrelated to Claimant’s work injury because the
medications were found to be unreasonable and unnecessary for treatment of Claimant’s
work-related injury during the UR process.
After a hearing, Hearing Office ruled in favor of Insurer by vacating the previously
entered administrative determinations and dismissing Pharmacy’s applications for fee
review. The Hearing Office concluded that Insurer met “its burden of proving that the
medications prescribed by [Physician] had been classified as unreasonable and
unnecessary treatment via the Utilization Review process.” Petition for Review,
10/15/2018, Exhibit A, at 13. In reaching this conclusion, the Hearing Office explained
that Pharmacy did not have standing in a fee review procedure to challenge the UR
determination that the medications prescribed by Physician were unreasonable and
unnecessary. The Hearing Office also rejected Pharmacy’s argument that the
Commonwealth Court’s decision in Armour Pharmacy v. Bureau of Workers’
Compensation Fee Review Hearing Office (National Fire Insurance Company of
Hartford), 192 A.3d 304 (Pa. Cmwlth. 2018) (“Armour”), a case we discuss in more detail
infra, holds that non-treating providers may not be deprived of compensation in the
workers’ compensation setting without receiving due process.
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Pharmacy then filed a petition for review in the Commonwealth Court, where
Pharmacy relied upon Armour for the proposition that non-treating providers are entitled
to payment from a workers’ compensation carrier for prescriptions issued at the request
of a treating provider unless that entitlement is removed by a procedure, such as UR, that
provides it due process protections. Pharmacy argued that pursuant to Armour, its due
process rights were violated because the Act does not allow non-treating providers to
participate in the UR process, even though UR determinations are binding on them.
Because the Commonwealth Court’s decision in this matter requires an
understanding of that court’s opinion in Armour, we pause to summarize that decision. In
Armour, an employer was required to provide medical treatment pursuant to the Act for
its employee’s work-related injury. A physician prescribed medication to treat the injury,
and a pharmacy dispensed the medication; however, the employer refused to pay the
pharmacy for the medication and requested UR, claiming that the medication prescribed
by the physician was not necessary to treat the employee’s work-related injury. At the
conclusion of the UR, the medication was found to be reasonable and necessary to treat
the employee’s injury. Subsequently, because the employer continued to fail to pay for
the treatment, the pharmacy that dispensed the medication filed a fee review application,
seeking payment from the employer for the medication.
The Fee Review Section concluded that, based on the UR determination, the
employer was required to pay the pharmacy for the medication. Thereafter, the employer
requested a hearing with the Hearing Office to contest that determination. After the
employer sought this review, the employer and the claimant entered into negotiations
outside of the UR and fee review processes, leading to their execution of a release
agreement that explicitly relieved the employer of any liability for the prescription. The
employer then pursued its challenge to the Fee Review Section’s determination, arguing
to the Hearing Office that the release agreement between it and the claimant should
[J-18A-2021 and J-18B-2021] - 6
control whether it owed the pharmacy for the medication. The Hearing Office agreed with
the employer and vacated the Fee Review Section’s determination.
The pharmacy appealed to the Commonwealth Court, contending that its due
process rights were violated because it was deprived of its right to payment based on an
agreement: (1) releasing the employer of its obligations imposed during the UR and fee
review proceedings; (2) that was reached outside of the UR and fee review proceedings;
(3) and to which the pharmacy was not a party. The Commonwealth Court in Armour
concluded that an agreement between an employer and claimant, reached after a UR
determination that medications dispensed by a pharmacy were reasonable and
necessary, but outside of the UR and fee review processes, could not be used to set
aside a fee review determination that an employer was obligated to pay a pharmacy
where the pharmacy was not a party to the agreement. The court held that, as a matter
of due process, the parties to a subsequent agreement regarding liability “can bind each
other, but they cannot release themselves from liability to a person who is not a party to
the [agreement] and who has been given neither notice nor opportunity to be heard on
the [agreement].” Armour, 192 A.3d at 312. Accordingly, the court vacated the Hearing
Office’s determination and remanded for further proceedings.
Turning back to the instant matter, in a published opinion, the Commonwealth
Court affirmed the Hearing Office’s order, holding that Pharmacy was not entitled to
payment. Keystone Rx, supra. In so doing, the court reasoned that Armour was
distinguishable from the present matter. The court emphasized that, unlike the instant
case, Armour was based on an agreement between the employer and claimant that was
created outside of the UR and fee review processes. Further, the intermediate court
noted that the result of the UR proceeding in Armour was a determination that the
treatment received by the claimant was reasonable and necessary; whereas here, a
determination was made that the treatment was unreasonable and unnecessary.
[J-18A-2021 and J-18B-2021] - 7
Consistent with this reasoning, the court concluded that, because the UR resulted
in a determination that the medications prescribed by Physician were unreasonable and
unnecessary, the Hearing Office correctly concluded that it could not address in the fee
review setting Pharmacy’s attack on “the facial validity of the UR process[.]” Keystone
Rx, 223 A.3d at 299. The court, however, did not end its analysis there.
Instead, the Commonwealth Court then purported to “acknowledge that there are
due process issues for [non-treating] providers such as Pharmacy that are precluded from
participating in the UR process but nonetheless are bound by the results that follow them
to the fee review process at issue herein.” Id. Based upon its assessment that “the
polestar of Armour [] is that the Act must be construed in accordance with due process of
law[,]” the court further held that “for UR procedures occurring after the date of this opinion
where an employer, insurer, or an employee requests UR, a provider which is not a ‘health
care provider’ as defined in the Act, such as a pharmacy, testing facility or provider of
medical supplies, must be afforded notice and an opportunity to establish a right to
intervene under the usual standards for allowing intervention.” Id.
Insurer sought reargument with the Commonwealth Court, and the court denied
the request. Insurer then filed in this Court a petition for allowance of appeal, which we
granted, limited to the following questions as phrased by Insurer:
(1) Did the Commonwealth Court exceed the scope of its authority and
substitute its judgment for that of the Pennsylvania Legislature when it
promulgated a new rule which mandates non-healthcare providers are
entities with standing and the right to intervene in the Workers’
Compensation Act’s Utilization Review process?
(2) Did the Commonwealth Court err when it gave non-healthcare providers
via the right to void at any time, a Utilization Review Determination
regarding the reasonableness and necessity of the care of the physician
who wrote the prescription which led to the non-healthcare provider
providing a good or service to the injured worker?
[J-18A-2021 and J-18B-2021] - 8
Keystone Rx LLC v. Bureau of Workers’ Comp. Fee Review Hearing Office, 238 A.3d
338, 339 (Pa. 2020). Hearing Office also sought allowance of appeal, which we granted
to address the following issue, as phrased by Hearing Office:
Whether the Commonwealth Court violated the separation of powers
doctrine by engrafting a new requirement onto the Pennsylvania Workers’
Compensation Act’s process for conducting utilization review of treatment
by a health care provider by prospectively directing that non-treating entities
be given notice and an opportunity to intervene in utilization reviews?
Id.
Notably, the Commonwealth Court’s unconventional, prospective holding raises a
number of potential questions, as evidenced by the above-quoted issues and the parties’
various arguments to this Court. To provide a concise analysis regarding the propriety of
the Commonwealth Court’s reasoning, we find it necessary to characterize the nature of
the court’s ruling. It appears that, for all intents and purposes, the Commonwealth Court
deemed the Act unconstitutional insomuch as it allegedly deprives non-treating providers
of due process in UR proceedings. To remedy this perceived infirmity, the court engrafted
onto the Act a requirement that non-treating providers must receive notice of and an
opportunity to intervene in UR proceedings. We, therefore, will summarize the parties’
arguments that align with this understanding of the Commonwealth Court’s holding. 4
Insurer highlights that the Act is an administrative scheme that the Legislature
promulgated for the purposes of providing compensation for employees who are injured
in the course of their employment and effectuating a workable cost containment system.
Insurer maintains that guaranteeing that non-treating providers, such as pharmacies, are
paid for filling prescriptions and similar actions does not further either of those purposes.
Indeed, Insurer contends that the Act clearly limits non-treating providers who are
4Consideration of the constitutionality of a statute presents a question of law; accordingly,
our standard of review is de novo, and our scope of review is plenary. Commonwealth v.
Ludwig, 874 A.2d 623, 628 n.5 (Pa. 2005).
[J-18A-2021 and J-18B-2021] - 9
concerned about payments to fee review proceedings where they may dispute only the
“amount or timeliness of the payment from the employer or insurer.” 77 P.S. § 531(5).
Insurer stresses that the Legislature made these policy decisions and that courts should
not disturb these legislative prerogatives.
In addition, Insurer insists that the manner in which the Commonwealth Court
decided this case exemplifies that court’s recent (alleged) distortion of the Act and its
purpose. Specific to this appeal, Insurer contends that the due-process-based rule
announced by the court upends 20 years of settled understanding of the function of URs.
Insurer warns that, because the court’s newly-minted rule entitles non-treating providers
to notice and an opportunity to intervene in URs, it necessarily follows that any UR
performed without such a providers’ participation could be deemed invalid. In Insurer’s
view, the Commonwealth Court’s ruling poses serious threats to the stability of the
workers’ compensation system. For these reasons, Insurer asks the Court to disavow
the Commonwealth Court’s prospective holding.
Along the same lines as Insurer’s argument, Hearing Office contends that the
Legislature created the UR process for the purpose of determining whether a particular
medical treatment was reasonable and necessary and that the Legislature deliberately
excluded non-treating providers from URs because they do not make any treatment
decisions. Hearing Office suggests that the Commonwealth Court strayed from this
straightforward reading of the Act and improperly usurped the role of the Legislature in
reaching its prospective holding. Hearing Office reminds us that this Court recently
reiterated the settled concept that “[i]t is axiomatic that [courts] may not add statutory
language where [they] find the extant language somehow lacking[.]” 5 Hearing Office’s
Brief at 14 (quoting Sivick v. State Ethics Comm’n, 238 A.3d 1250, 1264 (Pa. 2020)).
5In any event, Hearing Office opines that the court’s decision to violate the separation of
powers in this regard was unwise because the dispensing of services or goods that are
[J-18A-2021 and J-18B-2021] - 10
Of significant importance to this appeal, Hearing Office avers that non-treating
providers have no recognized property interest as of the time of a UR proceeding because
“there is no property interest in payment of the disputed bill before there is a determination
that the medical bills are reasonable and necessary.” Id. at 19 (citing American
Manufacturers Mutual Ins. v. Sullivan, 526 U.S. 40, 60 (1999)). In this regard, Hearing
Office highlights the High Court’s holding in Sullivan that the Pennsylvania workers’
compensation claimants in that case lacked a property interest that would implicate due
process until UR proceedings were completed and resulted in a determination that the
treatment at issue was reasonable and necessary.
Hearing Office argues that rather than a property interest, Pharmacy has a “mere
expectation” of payment until a UR proceeding results in a determination that a given
medical treatment is reasonable and necessary. Id. at 19 (quoting Miller v. WCAB (Pavex,
Inc.), 918 A.2d 809, 812 (Pa. Cmwlth. 2007)). Accordingly, Hearing Office reasons,
Pharmacy has not set forth a viable due process claim, and the Commonwealth Court,
therefore, violated key separation of powers principles by adding notice and right to
intervene elements to the Act for non-treating providers.6
consistent with a physician’s prescription or order, such as Pharmacy’s provision of
medication prescribed by Physician in this case, has no bearing on the UR process of
determining the reasonableness or necessity of the treatment prescribed by the
physician. Hearing Office’s Brief at 18.
6 The following parties filed amicus curiae briefs in support of Insurer and Home Office:
Coalition Against Insurance Fraud; Laundry Owners Mutual Liability Insurance
Association; United Parcel Service; Pennsylvania Chamber of Business and Industry;
Insurance Federation of Pennsylvania; American Property Casualty Insurance
Association; and National Association of Mutual Insurance Companies.
Each of the amicus briefs is similarly structured. They argue that the
Commonwealth Court improperly engaged in judicial lawmaking that will lead to severe
consequences, such as opening the door to further abuse of a system already plagued
by mark-ups of medicines and medical supplies, over prescription, and fraudulent billing
practices. Amici also emphasize that the Commonwealth Court’s new rule will create
uncertainty amongst all interested parties, as, inter alia, the court used imprecise
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Responding to Insurer’s arguments, Pharmacy continually refers to its “right to
compensation” at the UR phase of workers’ compensation proceedings; yet, Pharmacy
fails to elaborate adequately on the genesis of that right. Further, Pharmacy insists that
the Commonwealth Court did not determine that the UR or fee review provisions of the
Act are unconstitutional. Instead, without providing any citation to the Commonwealth
Court’s opinion and employing a strained interpretation of the Act and its regulations,
Pharmacy asserts that the court found the regulations promulgated by the Bureau of
Workers’ Compensation to be unconstitutional because those regulations deprive due
process to non-treating providers by failing to afford them a means to establish their
alleged right to payment for services rendered.7
Regarding Hearing Office’s issue and arguments, Pharmacy observes that non-
treating providers have no role in UR proceedings; yet, their right to compensation is
entirely dependent on whether the prescriptions they fill are deemed reasonable and
necessary during UR proceedings. Pharmacy maintains that because it has an interest
in receiving payment for its services, where the UR regulations authorize review of
services of non-treating providers, UR regulations “must also allow those non-treating
providers to have notice and a right to participate, just as they do for treatment provided
by a healthcare provider.” Pharmacy’s Brief at 31. Pharmacy argues that the UR
regulations are constitutionally repugnant for violating due process, and thus, the
Commonwealth Court did not violate separation of powers principles by interpreting the
Act in a way that vindicates non-treating providers’ right to due process.
language regarding whose due process rights entitle them to notice and a right to
intervene, which will lead to protracted appellate litigation.
7 In reality, the Commonwealth Court made direct reference to a Bureau regulation in its
opinion only once in a footnote. Keystone Rx, 223 A.3d at 297 n.4. The court made this
lone reference to underscore that both the Act and its regulations allow only employees,
employers, and insurers to request UR.
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Regarding the United States Supreme Court’s holding in Sullivan, Pharmacy
suggests that Sullivan concerned the due process rights of treating providers, who are
clearly part of UR proceedings. Pharmacy emphasizes that it had no right to participate
in UR proceedings, distinguishing this case from Sullivan. For these reasons, Pharmacy
believes that this Court should uphold the Commonwealth Court’s decision.
To the extent that the Commonwealth Court deemed the Act to be unconstitutional,
we note that every piece of legislation passed by the General Assembly enjoys the strong
presumption that it is constitutional. Pennsylvania State Ass’n of Jury Comm’rs v. Com.,
64 A.3d 611, 618 (Pa. 2013). Thus, “a party challenging the constitutionality of
a statute bears a very heavy burden of persuasion.” Stilp v. Com., 905 A.2d 918, 939
(Pa. 2006). Indeed, a court will not deem a legislative enactment unconstitutional unless
it clearly, palpably, and plainly violates the Constitution. Id. “If there is any doubt that a
challenger has failed to reach this high burden, then that doubt must be resolved in favor
of finding the statute constitutional.” Pennsylvania State Ass’n of Jury Comm’rs, 64 A.3d
at 618.
The Fourteenth Amendment to the United States Constitution provides that no
State may “deprive any person of life, liberty, or property, without due process of
law[.]” U.S. CONST., amend. XIV. The first inquiry in every due process challenge is
whether the [complaining party] has been deprived of a protected interest in ‘property’ or
‘liberty.’” Sullivan, 526 U.S. at 59. Here, the Commonwealth Court seemingly found that
the Act fails to provide non-treating providers with sufficient process to defend their
alleged protected property interest in receiving payment pursuant to the Act. Indeed, the
Commonwealth Court, in effect, found the Act to be constitutionally deficient because it
does not afford non-treating providers with appropriate procedural due process, the
fundamental hallmarks of which are notice and an opportunity to be heard. See Friends
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of Danny DeVito v. Wolf, 227 A.3d 872, 896 n.16 (Pa. 2020) (describing the hallmarks of
procedural due process).8 For the reasons that follow, we respectfully disagree.
In so doing, we first observe that the Act clearly and unambiguously provides that
employers and insurers are obligated to pay providers, such as Pharmacy, for reasonable
and necessary treatment or services connected to claimants’ work-related injuries. 77
P.S. § 531(1)(i) (“The employer shall provide payment in accordance with this section for
reasonable surgical and medical services, services rendered by physicians or other
health care providers, including an additional opinion when invasive surgery may be
necessary, medicines and supplies, as and when needed.”); id. at § 531(5) (“The
employer or insurer shall make payment . . . in accordance with the provisions of this
section.”). Indeed, the Act mandates that employers or insurers pay providers within 30
days of the receipt of bills; however, that obligation is, at least temporarily, eliminated if
employers or insurers dispute the reasonableness or necessity of the treatment at issue.
Id. (“All payments to providers for treatment provided pursuant to this act shall be made
within thirty (30) days of receipt of such bills and records unless the employer or insurer
disputes the reasonableness or necessity of the treatment provided pursuant to
paragraph (6)[, which addressed UR].”). In other words, if an employer or insurer triggers
the UR mechanism for challenging the reasonableness or necessity of treatment, then
the employer or insurer is not obligated to pay for the treatment unless the UR results in
a determination that the treatment at issue was reasonable and necessary.
8 To the extent that we must interpret the Act in this appeal, that task is guided by the
Statutory Construction Act, 1 Pa.C.S. §§ 1501-1991. Pursuant to the Statutory
Construction Act, the object of all statutory construction is to ascertain and effectuate the
General Assembly’s intention. 1 Pa.C.S. § 1921(a). When the words of a statute are
clear and free from ambiguity, the letter of the statute is not to be disregarded under the
pretext of pursuing its spirit. 1 Pa.C.S. § 1921(b).
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Thus, when a non-treating provider bills an insurer and the insurer invokes the UR
process, the non-treating provider is not entitled to payment under the Act. Further, if the
UR results in a determination that the treatment at issue is unreasonable or unnecessary,
the employer and insurer are not liable under the Act to pay for the treatment. See
Sullivan, 526 U.S. at 60 (citing, inter alia, 77 P.S. § 531(1)(i) and opining that the Act
“expressly limits an employee’s entitlement to ‘reasonable’ and ‘necessary’ medical
treatment, and requires that disputes over the reasonableness and necessity of particular
treatment must be resolved before an employer’s obligation to pay—and an employee’s
entitlement to benefits—arise.”)9 (emphasis in original). On the other hand, if a UR results
in a conclusion that the treatment was reasonable and necessary, then the non-treating
provider is entitled to payment under the Act and has the fee review process to litigate
the amount or timeliness of the payment from the employer or insurer.
Accordingly, when, as here, an insurer successfully challenges a treatment, the
Act makes clear that a non-treating provider does not have a constitutionally-protected
property interest in goods or services that it dispensed, as these providers were never
entitled to payment under the Act; rather, they simply have an expectation of payment in
the normal course. Absent a constitutionally protected property interest, there is no viable
due process claim. Thus, the Commonwealth Court erred by concluding that the Act
improperly fails to account for the due process rights of non-treating providers in UR
proceedings and by engrafting onto the Act a requirement that non-treating providers
receive notice of and an opportunity to intervene in UR proceedings. We, therefore, reject
that portion of the court’s opinion but otherwise affirm the court’s order.10
9 Any issue concerning other remedies possibly available to non-treating providers to
collect for goods or services rendered is not currently before the Court.
10Given our conclusion, we need not address the Commonwealth Court’s decision in
Armour. We nonetheless note that we are satisfied with the manner in which the
Commonwealth Court distinguished the instant matter from the circumstances underlying
Armour. See, supra, at 7.
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Justices Saylor, Todd, Donohue, Dougherty, Wecht and Mundy join the opinion.
Justice Wecht files a concurring opinion in which Justice Dougherty joins.
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