RENDERED: JULY 22, 2022; 10:00 A.M.
NOT TO BE PUBLISHED
Commonwealth of Kentucky
Court of Appeals
NO. 2022-CA-0332-WC
P & P CONSTRUCTION, INC. APPELLANT
PETITION FOR REVIEW OF A DECISION
v. OF THE WORKERS’ COMPENSATION BOARD
ACTION NO. WC-17-83257
DANIEL FARLEY; DR. BRAD FINE,
LEXINGTON FOOT & ANKLE
CENTER, INC.; ARH DANIEL
BOONE CLINIC HARLAN; HARLAN
ARH; AIR EVAC LIFETEAM; GRAM
RESOURCES, INC.; HONORABLE
PETER NAAKE, ADMINISTRATIVE
LAW JUDGE; AND WORKERS’
COMPENSATION BOARD APPELLEES
OPINION
REVERSING AND REMANDING
** ** ** ** **
BEFORE: DIXON, LAMBERT, AND MCNEILL, JUDGES.
LAMBERT, JUDGE: P & P Construction, Inc., (P & P) has petitioned this Court
for review of the February 25, 2022, decision of the Workers’ Compensation
Board (the Board) affirming the November 13, 2020, opinion and order of the
Administrative Law Judge (ALJ) finding certain medical bills submitted more than
45 days after the date of service was initiated were not barred by application of
Kentucky Revised Statutes (KRS) 342.020(4). Because we agree with P & P that
these bills should have been barred by application of the statute, we reverse and
remand.
Daniel Farley worked as coal mining foreman for P & P beginning in
2015. In May 2017, he sustained a work-related injury to his left leg when a pump
exploded, for which he underwent multiple surgeries. He filed an application for
resolution of his injury claim in late February 2019. And in October 2019, Farley
filed a second claim seeking benefits for a psychological overlay injury, alleging
that he was experiencing post-traumatic stress disorder (PTSD) as a result of his
May 2017 work injury. He began seeking counseling from Dr. Syed Raza in
August 2017 and from Harlan ARH for PTSD, depression, and anxiety.
In April 2019, Kentucky Employers’ Mutual Insurance (KEMI), the
insurance carrier for P & P, filed a Form 112 medical fee dispute, in which it
disputed an air ambulance bill from Air Evac Lifeteam and a proposed foot surgery
by Dr. Brad Fine of Lexington Foot and Ankle Center, Inc. Because P & P has not
appealed from the portion of the Board’s decision to uphold the ALJ’s decision
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that those medical bills were compensable, we shall not address these fee contests
any further.
In July 2020, the parties entered into an agreement as to
compensation, which provided that P & P (through KEMI) had paid $107,681.50
in medical expenses as well as temporary total disability (TTD) benefits for close
to two years in the amount of $71,390.16. Farley agreed to accept a lump sum of
$125,000.00 to settle his remaining claims for benefits. The parties agreed that a
medical service provider was required to submit a statement for services within 45
days of the date the treatment was initiated and that neither P & P nor KEMI were
liable for untimely submitted medical billing.
The ALJ held a benefit review conference on August 30, 2020, noting
that the claim had been settled as to income and future medical benefits and that
the medical disputes as to the air evacuation and Dr. Fine’s billing were still
pending. The ALJ also approved the agreement as to compensation.
On September 14, 2020, P & P filed a motion to amend its Form 112
medical fee dispute to contest certain medical bills from Harlan ARH/Daniel
Boone Clinic and Harlan ARH/Gram Resources that were submitted more than 45
days after the date treatment was initiated, pursuant to KRS 342.020(4). These
disputed bills are listed below:
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Medical Provider Date of Service Date received by
KEMI
Harlan ARH/Daniel October 10, 2018 December 12, 2018
Boone Clinic
Harlan ARH/Daniel July 10, 2018 December 12, 2018
Boone Clinic
Harlan ARH/Daniel May 1, 2018 December 13, 2018
Boone Clinic
Harlan ARH/Daniel March 1, 2018 December 13, 2018
Boone Clinic
Harlan ARH/Daniel January 3, 2018 December 12, 2018
Boone Clinic
Harlan ARH/Gram May 8, 2017 September 6, 2018
Resources
The bills from the Daniel Boone Clinic were for Farley’s treatment for PTSD and
mood disorder, while the bill from Gram Resources was for x-rays taken following
Farley’s work accident. The ALJ permitted P & P to amend its Form 112 to
include its contest of the above bills. In its brief to the ALJ, P & P argued that it
was not liable for medical bills that were not submitted within the 45-day rule,
citing the mandatory and unambiguous language in KRS 342.020(4).
The ALJ entered an opinion and order on November 13, 2020, finding
that P & P was liable for all of the contested medical bills. As to the timeliness
issue, the ALJ held:
[P & P] disputes treatment billing based on late
submission of the medical billing based on KRS
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342.020(1),[1] which requires medical services providers
to submit medical expenses to the employer, insurer, or
medical payment obligor within 45 days after treatment
is initiated. The Workers’ Compensation Board has
consistently held on a number of occasions the 45 day
rule for submission of statements for services in KRS
1
The version of KRS 342.020(1) in effect until July 13, 2018, stated:
(1) In addition to all other compensation provided in this chapter,
the employer shall pay for the cure and relief from the effects of an
injury or occupational disease the medical, surgical, and hospital
treatment, including nursing, medical, and surgical supplies and
appliances, as may reasonably be required at the time of the injury
and thereafter during disability, or as may be required for the cure
and treatment of an occupational disease. The employer’s
obligation to pay the benefits specified in this section shall
continue for so long as the employee is disabled regardless of the
duration of the employee’s income benefits. In the absence of
designation of a managed health care system by the employer, the
employee may select medical providers to treat his injury or
occupational disease. Even if the employer has designated a
managed health care system, the injured employee may elect to
continue treating with a physician who provided emergency
medical care or treatment to the employee. The employer, insurer,
or payment obligor acting on behalf of the employer, shall make all
payments for services rendered to an employee directly to the
provider of the services within thirty (30) days of receipt of a
statement for services. The commissioner [previously, the
executive director] shall promulgate administrative regulations
establishing conditions under which the thirty (30) day period for
payment may be tolled. The provider of medical services shall
submit the statement for services within forty-five (45) days of the
day treatment is initiated and every forty-five (45) days thereafter,
if appropriate, as long as medical services are rendered. Except as
provided in subsection (4) of this section, in no event shall a
medical fee exceed the limitations of an adopted medical fee
schedule or other limitations contained in KRS 342.035, whichever
is lower. The commissioner [previously, the executive director]
may promulgate administrative regulations establishing the form
and content of a statement for services and procedures by which
disputes relative to the necessity, effectiveness, frequency, and cost
of services may be resolved.
The time requirements are now set forth in KRS 342.020(4).
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342.020(1) has no application in a pre-award situation.
The Kentucky Supreme Court in R.J. Corman Railroad
Construction v. Haddix, 864 S.W.2d 915, 918 (Ky.
1993)[,] pointed out that the requirement in KRS
342.020(1) for the payment of bills within 30 days of
receipt of the statement for services “applies to medical
statements received by an employer after an ALJ has
determined that said bills are owed by the employer.” In
other words, it does not apply pre-award. The Court in
R.J. Corman stated, “until an award has been rendered,
the employer is under no obligation to pay any
compensation, and all issues, including medical benefits,
are justiciable.” By extension, the Workers’
Compensation Board has found the 60 [day] requirement
contained in 803 [Kentucky Administrative Regulations]
KAR 25:096 § 11 is likewise not applicable until an
award has been entered finding the claim is compensable.
The Board held “the requirement that the provider submit
statements for services within forty-five days of
treatment would also apply post-award and not during the
pendency of a claim as is the case here.”
The Administrative Law Judge finds that the 45
day rule cited by [P & P] as a bar to its responsibility to
pay for the medical treatment of an injured employee is
inapplicable prior to the entry of an award or agreement
which establishes that a work-related injury has occurred.
Accordingly, the ALJ ordered P & P to pay the contested medical bills.
P & P appealed the ALJ’s decision to the Board pursuant to KRS
342.285, and the appeal was placed in abeyance pending a determination by the
Supreme Court of Kentucky in Wonderfoil, Inc. v. Russell, Case No. 2020-SC-
0301-WC. The matter was removed from abeyance once the Supreme Court’s
opinion in Wonderfoil became final in October 2021, and the parties argued their
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respective positions in their briefs. P & P pointed out that in Wonderfoil, Inc. v.
Russell, 630 S.W.3d 706 (Ky. 2021), the Supreme Court did not address whether
KRS 342.020(4) applied pre-award but rather addressed two administrative
regulations concerning the time for claiming expenses and the filing of unpaid
medical bills by claimants. Farley argued that the ALJ properly held that the 45-
day rule did not bar P & P’s responsibility to pay the contested medical bills as that
rule did not apply before the entry of an award or agreement establishing that a
work-related injury had occurred.
The Board entered an opinion on February 25, 2022, affirming the
ALJ’s decision. In holding that the 45-day requirement did not apply pre-award,
the Board explained:
We find no merit to the argument the ALJ erred by
finding P & P liable for medical bills submitted more
than forty-five days after service was rendered pursuant
to KRS 342.020(4). This Board has held on numerous
occasions the forty-five-day rule for submission of
statements for services in KRS 342.020 has no pre-award
application. The Kentucky Supreme Court in R.J.
Corman Railroad Construction v. Haddix, supra, pointed
out the requirement in KRS 342.020 for the payment of
bills within thirty days of receipt of the statement for
services “applies to medical statements received by an
employer after an ALJ has determined that said bills are
owed by the employer.” In other words, it does not apply
pre-award.
We held in Brown Pallet v. David Jones, Claim
No. 2003-69633 (entered September 20, 2007) the
reasoning of the Supreme Court in R.J. Corman Railroad
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Construction v. Haddix, supra, concerning the thirty-day
provision for payment of medical benefits should also
apply to the forty-five day rule for submission of medical
bills. The Court in R.J. Corman stated, “until an award
has been rendered, the employer is under no obligation to
pay any compensation, and all issues, including medical
benefits, are justiciable.”
We additionally note that pursuant to Garno v.
Selectron USA, 329 S.W.3d [301] (Ky. 2010), the sixty-
day rule found at 803 KAR 25:096 § 11 applies only after
an interlocutory decision or final award has been entered.
There was no request for an interlocutory decision in this
claim, and no such order was entered. No determination
was made regarding compensability of Farley’s condition
until the ALJ’s November 13, 2020 decision, or at the
earliest, the September 1, 2020 approval of the Form
110-I settlement agreement, in either instance, long after
the bills were submitted to P & P’s insurer.
We find the ALJ properly declined to enforce the
forty-five-day rule regarding the contested medical
expenses pre-award, and we affirm on this issue. Despite
its argument regarding noncompliance by Farley’s
medical providers, we find it significant that P & P did
not file a medical dispute regarding those bills for nearly
two years after their receipt by its insurer. Farley’s
medical expenses were incurred prior to the ALJ’s
decision and were submitted to the insurer during the
pendency of the claim. We find the ALJ correctly found
P & P responsible for Farley’s medical expenses
contested on appeal, and we affirm.
Contrary to P & P’s arguments, we find the
rationale contained in R.J. Corman Railroad Construction
v. Haddix, supra, is applicable. We additionally find
instructional the recent holding by the Kentucky Supreme
Court in Wonderfoil, supra. There the Court held the
sixty-day submission requirement for injured workers
only applied post-award, or a determination of
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compensability by an ALJ, stating specifically,
“Accordingly, when viewed in the context of the
regulatory scheme, 803 KAR 25:096, § 11’s application
only post-award best effectuates the intent of the
Commissioner and prevents an absurd result.” By
extension, we find the forty-five-day requirement set
forth in KRS 342.020(4) likewise is applicable only after
a determination of compensability of a claim by an ALJ.
We further note 803 KAR 25:010 § 13 contains sufficient
provisions to dissuade purposeful delay.
This petition for review now follows.
On appeal, P & P continues to argue that the Board and the ALJ
incorrectly ruled that the 45-day rule applies only post-award and that the holdings
in R.J. Corman, supra, and Wonderfoil, supra, should not have been extended to
this particular part of the statute.
This Court’s standard of review in workers’ compensation appeals is
well-settled in the Commonwealth. “The function of further review of the [Board]
in the Court of Appeals is to correct the Board only where [the] Court perceives the
Board has overlooked or misconstrued controlling statutes or precedent, or
committed an error in assessing the evidence so flagrant as to cause gross
injustice.” Western Baptist Hosp. v. Kelly, 827 S.W.2d 685, 687-88 (Ky. 1992).
Whether the 45-day rule for providers to submit statements for
services set forth in KRS 342.020(4) applies both pre- and post-award is a question
of statutory interpretation. In Pearce v. University of Louisville, by and through its
Board of Trustees, 448 S.W.3d 746 (Ky. 2014), the Supreme Court of Kentucky
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addressed the standard of review for appeals raising an issue of statutory
construction:
Statutory construction is an issue of law that we
review de novo. Therefore, “[t]he trial court’s and Court
of Appeals’s [sic] construction of statutes is also entitled
to no deference on appeal. . . .” Cumberland Valley
Contractors, Inc. v. Bell County Coal Corp., 238 S.W.3d
644, 647 (Ky. 2007) (citing Bob Hook Chevrolet Isuzu,
Inc. v. Kentucky Transportation Cabinet, 983 S.W.2d
488, 490 (Ky. 1998)).
In construing a statute, it is fundamental that our
foremost objective is to determine the legislature’s intent
in enacting the legislation. “To determine legislative
intent, we look first to the language of the statute, giving
the words their plain and ordinary meaning.” Richardson
v. Louisville/Jefferson County Metro Government, 260
S.W.3d 777, 779 (Ky. 2008). Further, we construe a
“statute only as written, and the intent of the Legislature
must be deduced from the language it used, when it is
plain and unambiguous. . . .” Western Kentucky Coal Co.
v. Nall & Bailey, 228 Ky. 76, 14 S.W.2d 400, 401-02
(1929). Therefore, when a statute is unambiguous, we
need not consider extrinsic evidence of legislative intent
and public policy. County Bd. of Educ. Jefferson County
v. Southern Pac. Co., 225 Ky. 621, 9 S.W.2d 984, 986
(1928). However, if the statutory language is ambiguous,
we will look to other sources to ascertain the legislature’s
meaning, such as legislative history and public policy
considerations. MPM Financial Group Inc. v. Morton,
289 S.W.3d 193, 198 (Ky. 2009). Further, we “read the
statute as a whole, and with other parts of the law of the
Commonwealth, to ensure that our interpretation is
logical in context.” Lichtenstein v. Barbanel, 322
S.W.3d 27, 35 (Ky. 2010).
Pearce, 448 S.W.3d at 749.
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KRS 342.020 addresses the payment of medical expenses by the
employer and provides in relevant part as follows:
(1) In addition to all other compensation provided in this
chapter, the employer shall pay for the cure and relief
from the effects of an injury or occupational disease the
medical, surgical, and hospital treatment, including
nursing, medical, and surgical supplies and appliances, as
may reasonably be required at the time of the injury and
thereafter for the length of time set forth in this section,
or as may be required for the cure and treatment of an
occupational disease.
....
(4) In the absence of designation of a managed health
care system by the employer, the employee may select
medical providers to treat his injury or occupational
disease. Even if the employer has designated a managed
health care system, the injured employee may elect to
continue treating with a physician who provided
emergency medical care or treatment to the employee.
The employer, insurer, or payment obligor acting on
behalf of the employer, shall make all payments for
services rendered to an employee directly to the provider
of the services within thirty (30) days of receipt of a
statement for services. The commissioner shall
promulgate administrative regulations establishing
conditions under which the thirty (30) day period for
payment may be tolled. The provider of medical services
shall submit the statement for services within forty-five
(45) days of the day treatment is initiated and every
forty-five (45) days thereafter, if appropriate, as long as
medical services are rendered. Except as provided in
subsection (7) of this section, in no event shall a medical
fee exceed the limitations of an adopted medical fee
schedule or other limitations contained in KRS 342.035,
whichever is lower. The commissioner may promulgate
administrative regulations establishing the form and
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content of a statement for services and procedures by
which disputes relative to the necessity, effectiveness,
frequency, and cost of services may be resolved.
P & P points to the mandatory language in KRS 342.020(4) which
requires that “[t]he provider of medical services shall submit the statement for
services within forty-five (45) days of the day treatment is initiated and every
forty-five (45) days thereafter, if appropriate, as long as medical services are
rendered.” This unambiguous language, P & P argues, does not contain any
indication that the 45-day rule is limited to only post-award submissions. Rather,
the date of treatment is the determinative question, and it is this date that triggers
the start of the 45-day period for a provider to submit its completed statement of
services. In holding that a provider has 45 days from the date of an award to
present statements of services, the Board rewrote the statutory provision. This, P
& P goes on to argue, constitutes error. In addition, P & P argues that the Board
improperly ignored the word “shall” in the statutory language. Accordingly, P & P
asserts that this rule should apply in the present case and that it should not be liable
for the payment of the billing statements at issue.
For the reasons set forth in P & P’s petition for review, we agree. The
unambiguous language of the statute requires a provider to submit billing
statements within 45 days after treatment has been initiated; there is no language in
the statute that limits the application of the 45-day rule to post-award submissions.
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Both the ALJ and the Board relied upon the Supreme Court of
Kentucky’s opinion in R.J. Corman, supra, to hold that the 45-day time limit for a
provider to submit billing statements only applies post-award. However, as set
forth below, the R.J. Corman Court was addressing the portion of the statute
requiring an employer to pay medical benefits within 30 days of receipt of a billing
statement and the proper time to contest same, not the portion requiring a provider
to submit these billing statements within 45 days of the initiation of treatment.
The amendment to KRS 342.020(1) requiring the
payment of medical benefits in 30 days is clearly
intended to hasten payment of those medical bills that the
employer is obligated to pay. Until an award has been
rendered, the employer is under no obligation to pay any
compensation, and all issues, including medical benefits,
are justiciable. Therefore, we believe that KRS 342.020,
which addresses additional compensation for injuries,
which must be determined to be work-related per KRS
342.0011(1) to be compensable, applies to medical
statements received by an employer after an ALJ has
determined that said bills are owed by the employer.
Likewise, the rules enunciated in [Westvaco Corp. v.
Fondaw, 698 S.W.2d 837 (Ky. 1985),] and [Phillip
Morris, Inc. v. Poynter, 786 S.W.2d 124 (Ky. App.
1990)], only apply post-award.
From a practical standpoint, pre-award application
of the 30-day rule to either pay or contest medical costs is
an exercise in futility and simply adds another step to the
process. In essence, the rule requires employers to file a
motion to contest in order to preserve the issue for
consideration at the hearing. The ALJ would hardly be
able to rule on the motion before considering the merits
of the claim and determining whether claimant is entitled
to any compensation. Therefore, the motion to contest
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would necessarily be held in abeyance, with no real
benefit derived from the extra procedural step.
We have been offered no logical reason why
Westvaco and Poynter should apply to medical bills
submitted to an employer during the litigation of a claim.
Without a sound basis for extending the rule further, we
reverse the Court of Appeals’ affirmance of the Board on
this point. The proper time to contest issues involved in
a workers’ compensation claim, including whether
certain medical treatment should be at the expense of the
employer, is at the hearing before the ALJ.
R.J. Corman, 864 S.W.2d at 918-19. We agree with P & P that the Board
improperly extended this holding in the present case. As P & P points out, strict
enforcement of the 30-day payment rule prior to an award would violate due
process where the employer denied the claim. That is not the case here, as the
portion of the statute at issue addresses treatment providers, not employers.
P & P also disputes the Board’s reliance upon the Supreme Court of
Kentucky’s recent decision in Wonderfoil, supra. In Wonderfoil, the Supreme
Court addressed the time limit for an employee/claimant to submit medical bills to
the employer for repayment as set forth in 803 KAR 25:096 § 11(2), which states:
Expenses incurred by an employee for access to
compensable medical treatment for a work injury or
occupational disease, including reasonable travel
expenses, out-of-pocket payment for prescription
medication, and similar items shall be submitted to the
employer or its medical payment obligor within sixty
(60) days of incurring of the expense. A request for
payment shall be made on a Form 114.
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Again, this regulation does not address the portion of KRS 342.020(4) requiring a
provider (not a claimant) to submit medical billing statements within 45 days of the
initiation of service. And the Wonderfoil Court did not address that portion of the
statute, either, as it was limited to consideration of several administrative
regulations. Therefore, neither R.J. Corman nor Wonderfoil provide support for
the Board’s holding that the 45-day requirement for a provider to submit medical
billing statements only applies post-award.
Accordingly, we hold that the Board misconstrued the controlling
statute and precedent and therefore erred as a matter of law in holding that the 45-
day requirement for providers to submit billing statements applied only post-
award. The plain and mandatory language of the statute does not contain anything
that limits the application of the 45-day rule to post-award situations. Therefore,
we hold that this requirement applies both pre- and post-award. In addition, this
interpretation of KRS 342.020(4) will not harm the claimant, as “[t]he medical
provider shall not bill a patient for services which have been denied by the
payment obligor for failure to submit bills following treatment within forty-five
(45) days as required by KRS 342.020 and Section 6 of this administrative
regulation.” 803 KAR 25:096 § 10(3).
For the forgoing reasons, the opinion of the Workers’ Compensation
Board affirming the decision of the Administrative Law Judge determining that P
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& P was responsible for payment of the billing statements submitted outside of the
45-day period is reversed, and this matter is remanded with directions that the
Board reverse the ALJ’s decision as to the billing statements at issue because they
were submitted outside of the 45-day period.
ALL CONCUR.
BRIEF FOR APPELLANT: NO BRIEF FOR APPELLEES.
W. Barry Lewis
Hazard, Kentucky
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