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Park Place Surgery Center, LLC v. National Oilwell Varco, L.P.

Court of Appeals of Louisiana, Third Circuit

September 6, 2017

PARK PLACE SURGERY CENTER, LLC DBA PARK PLACE SURGICAL HOSPITAL
v.
NATIONAL OILWELL VARCO, L.P. AND NEW HAMPSHIRE INSURANCE COMPANY

         SUPERVISORY WRIT FROM A RULING OF THE OFFICE OF WORKERS' COMPENSATION, DISTRICT 04, LAFAYETTE PARISH, STATE OF LOUISIANA, DOCKET NO. 17-01205 HONORABLE ADAM JOHNSON, PRESIDING JUDGE

          Gerald A. Melchiode, Kevin A. Marks, Renée S. Melchiode, Benjamin M. Pri-tal, Melchiode Marks King, L.L.C., COUNSEL FOR DEFENDANTS/ APPLICANTS/RELATORS NATIONAL OILWELL VARCO, L.P. AND NEW HAMPSHIRE INSURANCE COMPANY

          Thomas A. Filo, Somer G. Brown, Cox, Cox, Filo, Camel & Wilson, L.L.C. COUNSEL FOR PLAINTIFF/RESPONDENT: Park Place SurgeryCenter, LLC, D/B/A Park Place Surgical Hospital

          Court composed of John D. Saunders, Shannon J. Gremillion, and John E. Conery, Judges.

          JOHN E. CONERY, JUDGE.

         The defendants-relators, National Oilwell Varco, L.P., and New Hampshire Insurance Company, seek supervisory writs from the judgment of the Office of Workers' Compensation, District 04, the Honorable Adam Johnson presiding, which denied the relators' exceptions of res judicata, lis pendens, lack of subject matter jurisdiction, and nonjoinder of indispensable party. For the following reasons, the motion to seal the record is granted, except as to this opinion, and the writ is denied at relators' cost.

         STATEMENT OF THE CASE

         The instant case arises from a workers' compensation form 1008 claim filed by the plaintiff-respondent, Park Place Surgery Center, LLC d/b/a Park Place Surgical Hospital (Park Place), for underpayment of a workers' compensation medical bill by the relators (the employer and employer's insurer) pursuant to La.R.S. 23:1034.2(F) in connection with medical treatment provided for on-the job injuries sustained by employee Brian Armstead. Park Place also seeks statutory penalties and attorney fees under La. R.S. 23:1201(F)(4) for the arbitrary and capricious handling of the workers' compensation claim by relators.

         The relators filed exceptions of prematurity, vagueness, res judicata, lis pendens, lack of subject matter jurisdiction, and nonjoinder of indispensable party, all of which were denied following a hearing on April 25, 2017. A written judgment was signed on May 1, 2017. The relators are now before this court on writs seeking review of the trial court's rulings on the exceptions. The relators also filed a motion to seal the record, briefs, exhibits, and any issued opinion or other pleading if confidential and proprietary information is included.

         SUPERVISORY RELIEF

         The requirement of irreparable injury is met in this case in light of Herlitz Construction Company, Inc. v. Hotel Investors of New Iberia, Inc., 396 So.2d 878 (La.1981). When the overruling of an exception is arguably incorrect, when a reversal will terminate the litigation, and when there is no dispute of fact to be resolved, judicial efficiency and fundamental fairness to the litigants dictate that the merits of the application for supervisory writs should be decided in an attempt to avoid the waste of time and expense of a possibly useless future trial on the merits.

         ON THE MERITS

         The relators argue that the medical bill that forms the basis of the dispute was initially reviewed by FairPay Solutions, Inc. (FairPay). FairPay provides review services of workers' compensation bills to employers and their respective insurers. The relators add that the payment made to the plaintiffs was in keeping with FairPay's recommendation and in accordance with a Settlement Agreement confected several years ago in a class action suit, Opelousas General Hospital Authority, a Public Trust d/b/a Opelousas General Health System and ArkLaMiss Surgery Center, LLC v. FairPay Solutions, Inc., No. 12-C-1599-C, 27th Judicial District Court, St. Landry Parish (Class Action), and signed by the trial court on August 17, 2012.[1]

         The Class therein was defined as follows:

All Louisiana hospitals and ambulatory surgical centers that have provided outpatient services to workers' compensation patients pursuant to the Louisiana Workers' Compensation Act, LSA-R.S. 23:1021[, ] et seq., and whose bills have been discounted, adjusted, paid on a reduced basis, or otherwise paid at less than the billed amount after October 21, 2003[, ] as a result of a reduction recommended by FairPay.

         Pursuant to the Settlement Agreement, FairPay paid about seven million dollars to the members of the class for the dismissal of their claims. A permanent injunction was entered against any future claims involving FairPay's recommendation for payment on a medical bill made pursuant to the Future FairPay Pricing Methodology (FPPM). The Settlement Agreement also contained a mechanism for dispute resolution for a Class Member to seek additional reimbursement from a released party under the agreement. Additionally, the Class Members agreed to a safe haven for FairPay wherein they agreed to waive and release all claims and liability pertaining to bills paid pursuant to FairPay's recommendation in keeping with the FPPM. Once a Class Member exhausts the delineated procedure for dispute resolution and FairPay and its clients have allegedly failed to follow the Methodology, the Class Member may file an action in district court or in the Office of Workers' Compensation (OWC). The issue of whether FairPay adhered to the Methodology was the sole issue in the prior litigation.

         After the Settlement Agreement was approved, Qmedtrix, a competing bill review company, appealed on numerous grounds, including the assertion that the class action claims arose under the exclusive jurisdiction of the OWC. A panel of this court affirmed the district court's approval of the settlement and the adoption of a new methodology for pricing. Opelousas General Hosp. Authority v. FairPay Solutions, Inc., 13-17 (La.App. 3 Cir. 7/13/13), 118 So.3d 1269. Further, that panel concluded that the class action claims did not arise under the Workers' Compensation Act (WCA); thus, the claims did not fall within the exclusive jurisdiction of the OWC.

         The Settlement Agreement provides for a Reconsideration Period which requires the Class Member to submit to FairPay for review and reconsideration the amount recommended to be paid and the amount actually paid on a bill or bills. FairPay then reviews the bill or bills to determine if it erred in the application of the pre-approved Methodology. FairPay then has thirty days to seek a mediation of future disputes. Only after these procedural remedies have been exhausted may a healthcare provider bring an action alleging FairPay has not properly applied the Methodology under the Settlement Agreement.

         Park Place maintains, however, that it complied with the Initial Reconsideration Period and submitted the subject claim to FairPay before the thirty-day period required prior to filing the workers' compensation form 1008 claim. Further, Park Place asserts that the relators, who had the burden of proving their exception of prematurity, offered no evidence to show that Park Place failed to comply with the Initial Reconsideration Period.

         Park Place adds that its 1008 claim was filed pursuant to La.R.S. 23:1034.2(F) for underpayment of a workers' compensation medical bill in connection with treatment provided to Mr. Armstead. The 1008 form, Park Pace asserts, indicates that the claim is limited to "non payment [sic] of medical services" and statutory penalties/attorney's fees for arbitrary and capricious handling of the claim. As such, Park Place argues that this claim arises under the WCA. Park Place adds that the claim is made against the employer and insurer only, and does not mention the Settlement Agreement or refer to FairPay discounts. Further, Park Place claims that the relators wrongly assert that the "zero payments" notation on the bill at issue was in keeping with the FPPM in the Class Settlement.

         Res Judicata

         The relators argue that the claim in the instant matter is barred by the doctrine of res judicata as provided in La. R.S. 13:4231:

Except as otherwise provided by law, a valid and final judgment is conclusive between the same parties, except on appeal or other direct review, to the following extent:
(1) If the judgment is in favor of the plaintiff, all causes of action existing at the time of final judgment arising out of the transaction or occurrence that is the subject matter of the litigation are extinguished and merged in the judgment.
(2) If the judgment is in favor of the defendant, all causes of action existing at the time of final judgment arising out of the transaction or occurrence that is the subject matter of the litigation are extinguished and the ...

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