Pharmacy Must be Given Due Process When Dispensing Medications for Work Injury in PA

We have discussed the Utilization Review (UR) process many times in this blog.  Indeed, UR is such a big issue in the world of Pennsylvania workers’ compensation that we have a section on our website devoted to just this topic.  Basically, UR is the tool used by either an injured worker, or the workers’ compensation insurance carrier (usually the latter) to determine whether medical treatment is “reasonable and necessary.”

A somewhat related process is that for Fee Review.  Since this is something that is done by healthcare providers (rather than the injured worker), we have rarely addressed Fee Review in this blog.  The healthcare providers often have their own legal counsel handle these matters (rather than obtaining relief through the efforts of the injured worker’s attorney, as in other areas of workers’ comp).  Fee Review is the means a healthcare provider uses to obtain payment for reasonable and necessary medical treatment, related to the work injury.  Recently, the Commonwealth Court of Pennsylvania issued a decision which dealt with both Utilization Review and Fee Review.

In Keystone Rx LLC v. Bureau of Workers’ Compensation Fee Review Hearing Office (Compservices Inc./AmeriHealth Casualty Services), the injured worker hurt his left knee.  As part of the treatment for the knee, the physician ordered medications, which were dispensed by Keystone Rx LLC.  The workers’ compensation insurance carrier filed for Utilization Review of the treatment rendered by the physician, including these prescriptions.  A Utilization Review Determination found all treatment of the physician, including the medications, to be unreasonable and unnecessary.  This meant the insurance company was not responsible for payment of the treatment found unreasonable and unnecessary (including the prescriptions).

As is often done, a Petition for Review of Utilization Review Determination was filed by the injured worker (to challenge the results of the UR).  However, the injured worker and the workers’ comp insurance carrier then agreed to a settlement (called a “Compromise & Release” in the PA workers’ compensation world).  As part of this settlement, the injured worker agreed to withdraw the Petition for Review of Utilization Review Determination, meaning they would no longer challenge whether the insurance company had to pay these bills.

Since the bills for the medications were not paid, Keystone Rx LLC filed for Fee Review.  Though the Fee Review was initially granted by the Medical Fee Review Section, this was reversed on appeal to Hearing Office.  Keystone Rx LLC then appealed to the Commonwealth Court of PA.

The Court noted that under the Pennsylvania Workers’ Compensation Act, a healthcare provider, like Keystone Rx LLC, can only file for Fee Review, which can only address the amount or timeliness of payment.  A healthcare provider does not have jurisdiction to file a Utilization Review, so there is no way for a healthcare provider to challenge the reasonableness or necessity of medical treatment.

Here, explained the Court, “it necessarily follows that a UR determination is binding on the Hearing Office.”  Since the Utilization Review Determination found the treatment at issue to be unreasonable and unnecessary, “Pharmacy is attacking the facial validity of the UR process, and the Hearing Office correctly held that such a question was beyond its purview.”  As such, the Court affirmed the decision of the Hearing Office, meaning the workers’ comp insurance carrier was not responsible for the payment of the medications provided by Keystone Rx LLC.

However, that did not end the analysis.  Recognizing the fundamental unfairness of allowing the injured worker and the insurance carrier to effect a settlement that impacted the rights of the pharmacy (without the knowledge or participation of the pharmacy), the Court set forth some rules to now be followed:

“(W)e hold 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.”

While our firm represents primarily the injured worker, and rarely a healthcare provider, we also believe in doing things “the right way.”  In that way, this requirement would not change how we handle matters, as leaving the pharmacy without remedy in this case just seems a bit unsettling.